The quiet buzz of electric vehicles is growing louder as more EV makers choose to go public by merging with a SPAC.
While several large Chinese EV companies have completed IPOs in recent years (NIO, LI, XPEV), the last major US EV maker to IPO was Tesla in 2010 (+14,584% from offer). Now many US-based EV companies are plugging into the recent SPAC trend for an alternative road to the public market.
Why EVs pick SPACs
Traditional IPO investors are reluctant to award $1+ billion valuations to pre-revenue auto developers, but SPAC shareholders have been willing to bet on longshots in the right space. And while IPOs can require a year or more of preparation, SPACs allow EV makers to take advantage of current conditions and list in a matter of months.
Four EV makers have listed via SPAC, providing a roadmap for others
Four pre-revenue EV developers have successfully listed via SPAC in 2020: hydrogen-powered truck startup Nikola (NKLA), truck developer Hyliion (HYLN), pickup truck producer Lordstown Motors (RIDE), and luxury SUV maker Fisker (FSR). Post-merger performance has generally been positive, with the four averaging a 10% return from de-SPAC and a 132% return from the $10 offer price, compared to -1% and 29% for all 2020 combinations, respectively.
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