Canoo CEO Ulrich Kranz likes to call his first model of the EV subscription a ‘spaceship’ rather than an ‘air on wheels’. Soon he expects to need the money to build Canoo’s initial model, which looks like a cross between a van and a shuttle bus.
“This is going to be a lifestyle tour,” Kranz told CNBC. He said the company, which is merging with a specialty purchasing company, like SPAC, “gives it an enormous opportunity to access the resources and develop our cars and bring them to market.”
Canoo, which will use a membership model to sell its electric cars, will go public after it merges with Hennessy Capital Acquisition Corp IV, a “blank-check” SPAC created to fund a merger that is frequent leads to an IPO. In this case, Canoo will list with Nasdaq under the ticker symbol CNOO.
This is the fourth electric car company to use a SPAC since March. Nikola, which plans to sell hydrogen fuel cells and all-electric pickups, merged with a SPAC called VectoIQ Acquisition ahead of its IPO. After the deal was completed, Nikola began trading on June 4that just $ 33 per share.
Within days, it went up to nearly $ 80 when investors jumped at the chance to cash in on a pure game EV share. Since then, three other start-ups of electric cars, Lordstown Motors, Fisker Inc. and Canoo, all announcing plans for their own SPAC IPOs.
“There is a very clear message from the markets: We want to invest in ESG, we want to invest in auto-electrification,” Deutsche Bank analyst Emmanuel Rosner told CNBC. Rosner says it looks like there’s an EV SPAC almost every day, as start-ups raise billions to develop and build electric cars that are planned for sale over the next few years.
While all the companies behind those EVs believe they will be successful, Rosner is not so sure. “We do not necessarily assume, all will survive or all will flourish. It is still too early to say which will which will not,” he said.
With 300 employees, including many who have worked at other EV and tech companies, Canoo believes it has the talent and vision to grow its EV business. Since its inception in 2017 as EVelozcity, the company has raised $ 415 million through two rounds of private financing. That money has helped the company build 32 prototypes, with 13 currently under construction tested and validated.
As for his description of the Canoo as “air on wheels”, Kranz says “We have furniture in this car, it’s different on the road.”
CNBC’s Meghan Reeder contributed to this article
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