Canoo electric vehicle
Canoo CEO Ulrich Kranz likes to call his EV subscription company’s first model a “spaceship” or a “loft on wheels.” Soon he expects to have the money needed to build Canoo’s initial model looks like a cross between van and a shuttle bus.
“This will be a lifestyle vehicle,” Kranz tells CNBC. He said the company, which is merging with a special purpose acquisition company, or SPAC, gives it “a huge opportunity to access the resources and develop our vehicles and bring them to market.”
Canoo, which will use a membership model to sell its electric vehicles, will go public after it merges with Hennessy Capital Acquisition Corp IV, a “blank-check” SPAC created to finance a merger which often leads to an IPO. In this case, Canoo will list with NASDAQ under the ticker symbol CNOO.
This is the fourth electric-vehicle company to use a SPAC to go public since March. Nikola, which plans to sell hydrogen fuel cell trucks and all-electric pickups, merged with a SPAC named VectoIQ Acquisition ahead of its IPO. After the deal was completed, Nikola began trading on June 4 at just over $33 a share.
Within days it soared to nearly $80 as investors jumped at the chance to cash in on a pure play EV stock. Since then, three other electric vehicle start-ups, Lordstown Motors, Fisker Inc. and Canoo, have all announced 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 vehicle electrification,” Deutsche Bank Analyst Emmanuel Rosner told CNBC. Rosner says it seems like there is an EV SPAC almost every day as start-ups raise billions to develop and build electric vehicles scheduled to go on sale over the next couple of years.
While all of the company’s behind those EVs believe they will be successful, Rosner is not so sure. “We don’t necessarily assume, all will survive or all will thrive. It’s still very early to say which one will which one won’t,” he said.
With 300 employees, including many who have worked at other EV and tech firms, Canoo believes it has the talent and the vision to grow its EV business. Since it was founded in 2017 as EVelozcity, the company has raised $415 million through two rounds private funding. That money has helped the company build 32 prototypes, with 13 currently on the road being tested and validated.
As for his description of the Canoo as a “loft on wheels”, Kranz says “We have furniture in this car, it’s unlike anything else out on the road.”
CNBC’s Meghan Reeder contributed to this article