Electric Vehicle Startups Taking Advantage of Frothy Markets and Tesla’s Ascension

Posted on 12/11/2020

Analysts at Morgan Stanley think global EV sales will grow 50% or more next year, while sales of internal combustion engine vehicles are expected to grow 2% to 5%. Lucid Motors, Nikola Corporation, and NIO, are some electric vehicle car companies. The rapid stock price rise of Tesla Inc and its move into the S&P 500 is prompting many EV companies to issue shares and go public to take advantage of the investor demand. Chinese electric-vehicle maker NIO, which is listed in the U.S., is raising more capital, seeking to sell an additional 60 million American depository receipts, or ADRs. Tesla itself closed the books on US$ 5 billion equity issuance worth of shares. XPeng Inc. planned to sell 40 million ADRs. Li Auto Inc. plans to sell 47 million new ADRs.

SPAC Front

On the SPAC front, EV company Electric Last Mile Inc. has agreed to go public via a merger with a blank-check company, or special purpose acquisition corporation, Forum Merger III Corp. FIII, The deal would value Auburn Hills, Michigan-based Last Mile at roughly US$ 1.4 billion, and once it closes, likely in the first quarter 2021, the combined company will be renamed Electric Last Mile Solutions Inc.

Amsterdam-based EVBox Group is an e-vehicle charging unit of listed French utility Engie SA. EVBox Group agreed to go public via a reverse merger with TPG Pace Beneficial Finance Corp at a US$ 1.4 billion valuation. Engie will retain above 40% stake in the resultant company. Some of the key investors include certain BlackRock Inc’s managed funds, Wellington Management Group LLP, Neuberger Berman BD LLC, and Inclusive Capital Partners L.P. EVBox Group is spread across 70 countries and operates around 190,000 charging ports.

Loveland, Colorado-based Lightning eMotors is a fleet electrification startup. Lightning eMotors agreed to go public via a reverse merger with GigCapital3, Inc. , at a valuation of around US$ 823 million. Lightening eMotors had raised around US$ 27 million from backers like BP Technology Ventures. Lightning eMotors provides complete electrification solutions for commercial fleets – from Class 3 cargo and passenger vans to Class 6 work trucks, Class 7 city buses, and Class 8 motor coaches.

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