Electric car startup Canoo announced Tuesday plans to go public in a deal that values the company at $2.4 billion. It will be the fourth carmaker to do so this year as the industry rides on Tesla's soaring Wall Street valuations.
The merger with Hennessy Capital Acquisition, a special purpose acquisition company, gives Canoo access to $600 million that will help it produce and launch its first commercial vehicle by 2022.
It's also the second electric car company, behind Fisker in Los Angeles, to skip the traditional path to an IPO as the industry takes hold in Southern California. Earlier this year, the Chinese-owned luxury electric carmaker Karma, based in Irvine, said it was talks with investment bankers to go public. It is expected to close by the end in the fourth quarter of 2020.
Canoo Inc. will be listed on the Nasdaq under the ticker symbol "CNOO."
Canoo was founded in 2017 as Evelozcity by two former BMW executives. It opened up a waitlist in January for their eponymous prototype vehicle — a futuristic looking minivan — that it will offer to drivers as a subscription service. Canoo said its 300 workers designed, engineered and manufactured the beta vehicle in 19 months, completing more than 50 physical crash tests.
Electric vehicle maker Rivian, which plans to sell electric pickup trucks next year, announced it raised $2.5 billion in July. It was followed by Los Angeles-based Fisker's news that it will go public in a deal with a SPAC valued at $2.9 billion. Both are direct competitors, although neither is on the market yet.
And Hyundai Motor Group, tapped the Torrance-based startup earlier this year to design the powertrain that will be used for their electric vehicles.
"Today marks an important milestone of Canoo's effort to reinvent the development, production and go-to-market model of the electric vehicle industry," said Canoo co-founder and CEO, Ulrich Kranz. "Our technology allows for rapid and cost-effective vehicle development through the world's flattest skateboard architecture, and we believe our subscription model will transform the consumer ownership experience.
Canoo's "skateboard design" places components of the electric powertrain on a flatbed with wheels underneath the car much like a trailer. That design can be switched out on different vehicle shells.
Elon Musk's publicly traded Tesla, now valued at at $351.4 billion, became the most valuable car company in the world this July. And while it only produces a fraction of the world's new cars, its skyrocketing share value has given momentum to the $95 billion electric vehicle market, with sales expected to quadruple by 2025.
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