It was a bumpy stock market debut for electric vehicle maker Canoo (GOEV). The Los Angeles-based startup went public on the Nasdaq Dec. 22 via a reverse merger with the special purpose acquisition company, or SPAC, Hennessy Capital. Shares initially surged but turned lower to close Tuesday down 3.1% at 18.89 a share.
Canoo’s Wall Street debut coincided with a report from Reuters that said Apple (AAPL) plans to produce a passenger electric vehicle with a “breakthrough battery” by 2024. The news gave a jolt to two companies that make lidar (Light Detection and Ranging) sensors, a core component for self-driving cars that allows their computers to take a 3D image of the world around them. Shares of Luminar (LAZR) rallied 6.3% while Velodyne (VLDR) climbed more than 10.9%. Electric car battery startup QuantumScape (QS) also got a boost.
Canoo’s Executive Chairman Tony Aquila tells Yahoo Finance Live that the Apple electric car news had a ripple effect through the EV space.
“I think with the news of Apple, you know, it created a lot more volume in the stocks around lidar and then the EV guys as they’re coming to light. But, I actually think it’s a very good thing that Apple is kind of alluding to their involvement. Obviously it’s a very different vehicle than what we’re focused on,” Aquila says.
Canoo plans to use capital raised through the merger to begin limited production of its first electric vehicles in 2022. Last week it took the wraps off of a “multipurpose” electric delivery van that’s expected to cost about $33,000.
Canoo also plans to rollout a seven-passenger electric car that will be offered through a subscription service. Instead of buying or leasing, customers will pay a monthly fee that bundles maintenance, charging and insurance.
The company has joined with Hyundai (HYMTF) to co-develop technology, but it’s yet to lock-in a deal with a contract manufacturer to build its first vehicles.
“We’re talking to everybody,” says Aquila. “There’s certain parts of the IP line we’ll want to make sure we’re very focused on controlling, similar to the Apples of the world. And then, of course, working in a smart and efficient way with outside manufacturing for the assembly of vehicles.”
Canoo projects 2024 revenue of $1.43 billion and its first profit at $188 million.
“The demand is so high, and it’s only going to grow. When you think about three to four car generations from now, we’re going to be 80% electric and 20% fossil fuel,” says Aquila. “I think where Apple will contribute a lot to everybody in the industry is in the battery sector.”
Apple’s planned electric car will reportedly feature a “monocell” battery design that could significantly lower battery costs and improve vehicle range.
Aquila also thinks Apple could benefit the EV market with its software technology. “I think it’ll be helpful. It’s all hands on deck when you think of the demand and the rotation of the fleet. And so there’s lots of room, and I think Apple coming in is a good thing.”