Alternative vehicles charge into public markets
Alternative vehicles have become the new biotechs, often racing into the public markets with little to no revenue.
Driving the news: Hyzon Motors, a hydrogen fuel cell truck and bus startup, is going public via SPAC at a $2.7 billion valuation. Its technology is commercialized, unlike Nikola, but says it plans to have only 5,000 vehicles delivered by the end of 2023.
- Reuters reports that electric truck maker Xos Trucks in in talks to go public via SPAC at a $2 billion valuation. Yesterday it reported that Chinese EV startup Byton was exploring its own SPAC deal.
- And there have been a slew of earlier ones, including for flying taxis.
What's happening: Investors are reading regulatory tea leaves, Axios transportation reporter Joann Muller reports. And issuers are leveraging the moment.
- That starts in China, the world's largest market. But it also extends to Europe, where environmental rules have always been stricter, and in the U.S., where President Biden's climate agenda could increase chances for alt vehicle success.
- Tesla tailwinds also are having an impact.
But piling into EVs is perilous, even by blank-check standards.
- Biotechs are binary, with an almost-guaranteed customer base if their drugs are approved by regulators.
- Alt vehicles face challenges in terms of both product and product-market fit. Plus, many EV hopefuls rely on outside battery makers. As Joann notes, the U.S. market could go from being dependent on foreign oil to being dependent on foreign batteries.
The bottom line: Venture capitalists talk about how SPACs are pulling startups forward by 12-24 months, accelerating listing timelines. But, when it comes to alt vehicles, it feels more like 36-48 months.