Automotive

Electric-vehicle startup Canoo to go public, joining the wave of companies chasing Tesla’s success

Electric-vehicle startup Canoo to go public, joining the wave of companies chasing Tesla’s success

Electric vehicle startup Canoo announced Tuesday morning that it will go public with a valuation of $ 2.4 billion later this year. It joins several electric vehicle manufacturers making the leap to public markets. Like other new entrants, Canoo will use an unusual listing method that avoids a traditional initial public offering.

Canoo’s unique strategy revolves in part around what it calls its “skateboard architecture,” essentially a flat chassis that contains all the functional elements of a vehicle. That allows bodies adapted to a variety of applications, which Canoo refers to as “top hats”, to be built on a single type of frame. Canoo says that this modular approach will allow the company to serve a variety of market segments at a reduced cost.

Canoo also stands out for its planned subscription model, which it describes as month-to-month and “no obligation,” while also including maintenance, warranty, and charging. Nikola plans a similar subscription model, but Nikola is primarily focused on commercial electric freight trucks and is expected to require more commitment from customers.

Canoo’s first vehicle, by contrast, will be a consumer-focused “lifestyle vehicle” called Canoo, which will launch in 2022. The vehicle is highly unusual, essentially a smooth box that takes up the entire length of the chassis. . Canoo has said that this is intended to harness the future potential of autonomous driving, and some of Canoo’s concept art shows that the vehicle became something of a rolling room, without a driver.

The option to rent a consumer vehicle on a monthly basis would be quite novel for consumers, while leaning toward a broader trend toward recurring subscription income that has been embraced by entrepreneurs and investors. However, the no-compromise model also appears to pose special risks if Canoo’s products disappoint or consumers are frivolous.

Canoo says its second vehicle will be an urban commercial delivery vehicle, arriving in 2023.

Canoo will go public using an unusual but increasingly popular method. In lieu of an initial public offering of new Canoo shares, the car company will be acquired by the so-called Special Purpose Acquisition Company (SPAC), Hennessy Capital Acquisition Corp IV, which has raised funds for this purpose. The merged company will be known as Canoo Inc. and will be listed on the Nasdaq stock exchange.

SPAC’s public listing method has already been used this year by electric vehicle startups Nikola and Fisker. Generally speaking, a listing on SPAC is faster than a traditional IPO, and the electric vehicle market in particular has entered a phase where speed to market seems to be of the essence. Tesla, the pioneer of the category, has seen tremendous share growth over the past 12 months, culminating in the expectation that it will join the S&P 500. Other EV makers seem eager to build on that success.

Canoo was founded just two years ago, but it is not a rookie team. The company was founded after executives fled the chaos at Chinese-owned electric vehicle startup Faraday Future. Its executive team includes BMW veterans and Canoo announced earlier this year that it would partner with Hyundai to produce its vehicles.

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