SPAC Transportation & Logistics Venture

Automakers Reap Big Exits With SPACs, But There Are Bumps In The Road

After years spent pouring billions into an assortment of transportation and battery tech startups, automakers are reaping some returns.

Mostly, they have SPACs to thank. As more venture-backed transport and cleantech startups go public via mergers with blank-check acquirers, automakers are among the stakeholders poised to gain from successful offerings. 

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At least six automaker-backed companies have already completed SPAC offerings, and more are waiting in the wings. We used Crunchbase data to look at what’s driving the momentum, and at which direction things appear to be heading.

Completed SPAC deals

Per Crunchbase data, at least seven companies with automakers among their backers have gone public via SPAC since last year. Four are EV makers. They include: Nikola Motors and Lordstown Motors (both backed by GM), as well as electric-bus maker Proterra (backed by GM, BMW and Daimler), and luxe EV maker Faraday Future (backed by China’s Geely).

Three other automaker-backed SPACs that have hit public markets are electric battery technology company QuantumScape (backed by Volkswagen), lidar developer Luminar (backed by Daimler and Volvo), and online customer parts marketplace Xometry (backed by BMW).

Electric vehicle companies have been particularly popular targets for SPACs, as we’ve covered before. Although many private EV companies are pre-revenue and virtually all are deeply unprofitable, they have a number of qualities that SPACs find attractive. This includes potential for high future revenue projections, the ability to put large capital raises to work, and an enthusiastic following among public market investors.

Not yet completed SPAC deals

Since it usually takes a few months from announcement to completion of a successful blank-check merger, several automaker-backed SPACs are still in progress.

One of the most closely watched SPAC tie-ups is in the electric aircraft space. Joby Aviation, a Toyota-backed developer of planes capable of vertical takeoffs, announced plans to go public in a SPAC deal that sets a $6.6 billion post-money equity value for the Santa Cruz, California-based company.

Another is in the autonomous driving space. Aurora, a developer of self-driving technology that counts Hyundai among its backers, is merging with a SPAC called Reinvent Technology Partners Y in a deal that values the company at around $11 billion.

Aftermarket ups and downs

Not every offering has been a reliable hit with public investors.

Both Nikola and Lordstown have seen sharp declines from their peak prices amid allegations that they overpromised and underdelivered. Lordstown’s CEO and CFO resigned last month following charges of overstating pre-orders. Nikola’s founder and executive chairman stepped down last fall, following allegations of overstating the company’s progress.

Three others — QuantumScape, Luminar and Proterra — are also trading at  a fraction of their former highs.

Still, even off their peaks, the majority of automaker-backed newly public companies are sustaining valuations in the multiple billions. And, as announcements of new transportation SPAC deals continue to roll in at a steady clip, it appears we have miles to go before this cycle runs out of spark.

Illustration: Li-Anne Dias

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