The electrification of land transportation is inevitable and A Good Thing, but there’s a lot of carnage along the way! I read an article about the problem with SPACs; the article is not specific to EVs, but so many EV companies used a merger with a SPAC (Special Purpose Acquisition Company or “blank check company”) as a shortcut to getting listed on the NASDAQ stock exchange in order to raise cash and so founders could cash out. That prompted me to assemble a list of all the EV companies that went public in a SPAC. The four companies I mentioned in Mullen, the king of EV stock scams and cars: more EV fiascos at Faraday, Nikola, and Canoo all went public in SPAC mergers.
Merging with a SPAC was promoted as a cheaper and less onerous way for startups to go public (“less onerous” meaning no official SEC disclosure of risks and detailed financial status). The article details how even though a SPAC’s share price typically stays around $10 when it announces a merger target, “the actual value of a SPAC has declined to ~$4-6 due to numerous costs, like merger and underwriting fees paid to bankers, accountants, and lawyers.” I didn’t realize Wall Street already pigged out at the trough before retail investors bought in to the newly-public company.
How are EV SPACs doing?
- Arrival, commercial EV maker: bankrupt!
- Canoo, only made a handful of pill-shaped vans: bankrupt (thank you grifter CEO Tony F.U. Aquila)
- Electric Last Mile Solutions, would-be maker of commercial EVs: bankrupt!
- Faraday Future “Intelligent Electric”, maker of a handful of way-overpriced EV SUVs: share price down 99.999% or a nominal $94,173 per share
- Fisker, the eponymous car designer’s third attempt at a car company: bankrupt!
- GreenPower Motors, Canadian EV bus maker: share price down 97%
- Hyzon, would-be hydrogen truck maker: down 99.995% since its 2021 SPAC debut
- Lightning eMotors, would-be commercial EV maker: bankrupt!
- Lion Electric, EV bus and truck maker: bankrupt!
- Lordstown Motors, would-be EV pickup maker: bankrupt!
- Lucid, luxury car maker: down 96% from all-time high but a real car maker thanks to Saudi Arabia’s Mohammed Bone Saw
- Mullen Automotive, pretending to make EVs while rebadging Chinese EVs: down 99.999…% or a nominal $268,690,500 a share – David Michery rivaling lyin’ Trevor Milton.
- Nikola, purveyors of a fantasy of 600 truck stops making green hydrogen refueling hydrogen fuel cell trucks at a cheap all-in price: bankrupt, and never forget lyin’ Trevor Milton “was sentenced to 4 years in prison for engaging in securities and wire fraud in connection with his scheme to defraud and mislead investors.”
- Polestar: a real maker of upmarket EVs: down a mere 88% from $13.86 to $1.11 a share.
- Proterra, a real maker of battery buses: bankrupt!
- REE, a wannabe commercial vehicle maker after no one wanted its in-wheel motors: down 98.74% or a nominal $303 a share)
- VinFast, a real car maker selling cars to other parts of a Vietnamese crony tycoon’s business empire: down 95%, sort-of a real car maker selling itself cars
- XOS, trying to make EV trucks: down 99.06% since its 2021 SPAC debut
All these companies were pitched as being the next Tesla in the ruinously cash-depleting sector of making expensive electric (or “clean” hydrogen) vehicles. Most startups fail, nearly all new car companies fail. Yet Hyzon and XOS were both briefly worth $two billion dollars!
EV-adjacent SPACs
The above list doesn’t include would-be makers of other kinds of electric vehicles that went public in SPAC merger: motorcycles, scooters, skateboards, unicycles, etc. And dozens more EV-related startups (battery companies, charger makers, charging networks) went public in SPAC deals, including Aeva, ChargePoint, EVBox, EVgo, FREYR Battery, Hyliion Holdings, Li-Cycle, Microvast,Nuvve, QuantumScape, Romeo (acquired by Nikola now bankrupt), XL Fleet, etc. I haven’t researched how all these companies are doing, but it’s safe to assume most are doing badly (I could ask a Large Language Model chatbot to go off and hallucinate a report…)
You don’t have to go public in a SPAC to go bankrupt, but it helps.
Other bankrupt EV companies include:
- Arcimoto, would-be maker of tandem two-wheel sort-of-car EV
- Bollinger, would-be maker of off-road EVs, acquired by scammers Mullen Automotive
- Coda, importer of crummy early Chinese EV to the USA – I have a long memory!
- ElectraMeccanica, would-be maker of compact three-wheel EV, acquired by XOS
- Lightyear, wannabe maker of expensive solar-powered car
- Smith Electric, maker of commercial EVs, originally made UK milk delivery trucks
- Sono, would-be maker of a a solar-powered compact car
- Volta, would-be EV truck maker
You don’t have to go public to struggle as an EV maker
Lots of other companies never went public or have yet to go public, which limits the amount of money they can raise. That makes it even harder to have the piles of cash you need to write the big checks to actual make cars. Since these companies aren’t public their financial state is opaque, but you can be confident it’s… not great.
- Aptera, promising to begin production of a three-wheeled solar-powered weirdmobile for years
- Einride, promised a wild-looking self-driving truck but seems to have pivoted to EV freight logistics
- Motiv Power, selling a few commercial EVs
- Phoenix Motorcars, would-be converters of shuttle buses and flatbed trucks into EVs
- Quantron AG, would-be European maker of hydrogen trucks
- Riversimple, would-be UK maker of crappy small hydrogen commuter car
- Workhorse Group, would-be commercial EV maker, originally AMP Electric Vehicles; it transferred its pickup to defunct Lordstown.
Going public in an IPO is no guarantee
Rivian went through the arduous process of making a proper IPO (initial public offering, which raised a lot of cash. It’s a real maker of upmarket “adventure” EVs that are excellent cars (I rented one for a day to carry 7 tourists around in style and comfort) but it’s lost $billions and loses $tens of thousands on every car it makes.
Way back in the 1990s ZAP imported and tried to manufacture various battery vehicles, including a tiny truck and commuter vehicle: defunct since 2016.
Atlis Motor Vehicles went public and was developing an electric work truck. It looks like AMV went public on NASDAQ Sept. 17 2022 in a “Registration A process brings private shares to the public market” (not a SPAC or IPO). I think they’ve renamed themselves NXU, claim to make innovative battery packs and storage systems, and are once again public.
Cash is king
Supporters of these companies like to cite successful companies that went for years without any profits. But what kills them is running out of cash. To make cars you have to write a lot of big checks, so if the company isn’t profitable just look at “cash and cash equivalents” in its 10-Q and 10-K reports and you get a sense of how close it is to shutting its doors. As I remarked in earlier posts, the key to survival is to not enter production, but instead hype your company and stock.
Elon Musk: “Prototypes are easy, production is hard”, also “Production with positive cash flow is extremely hard.” (You can be a narcisstic right-wing troll spreading misinformation at all hours instead of working for your companies, and still have important insights.)
