The electric vehicle money surge
Growing amounts of cash are pouring into electric vehicle development that is underway via startups and legacy players.
What's new: A report out this morning indicates GM will be announcing an expanded strategy to take on Tesla, plus the U.K. electric van and bus company Arrival announced it is going public.
Driving the news, part 1: "General Motors Co will roll out details of an expanded and accelerated electric vehicle strategy on Thursday in an effort to convince investors it can be a serious competitor to Tesla Inc," Reuters reports, citing anonymous sources familiar with the plan.
- GM is expected to say it intends to invest more on electric vehicles than the previously outlined $20 billion by 2025, and to speed up plans to make its Cadillac brand all-electric, among other elements, per Reuters.
Driving the news, part 2: Arrival, the U.K.-based electric van and bus company, announced this morning that it's going public via merger with a special purpose acquisition company, or SPAC.
- The deal to merge with CIIG Merger Corp values Arrival at $5.4 billion.
Why it matters: The Arrival deal marks the latest in a big wave of SPAC transactions in the electric vehicle space as investors bank on major growth in what's still a niche market.
- Meanwhile, GM's latest move shows how incumbent automakers are increasingly concluding they need to go big into electric vehicles to position themselves for the future, even though sales of internal-combustion models still dominate the market.
Where it stands: The Arrival deal includes around $400 million in additional funding from investors including Fidelity, Wellington Management, a BNP Paribas energy funds, and BlackRock-managed funds.
- This builds on prior funding of $118 million from BlackRock as well as Hyundai and Kia investments.
- Arrival says it has $1.2 billion worth of signed contracts with customers, including a UPS order for 10,000 vans, and its first products are slated to go into production in the fourth quarter of 2021.
- It comes on the heels of other electric vehicle companies going public (or about to) via reverse mergers including Canoo, Lordstown Motors, Fisker, the charging provider ChargePoint.
What we're watching: Whether Arrival can make good on its plans, which initially focus on the commercial vehicle market.
- But deep pockets like what they've seen so far from the company and its system, which uses lightweight materials and a skateboard electric vehicle chassis that can accommodate multiple vehicle designs.