Under the dual effect of the global financial easing caused by the epidemic and the tide of electrification, more and more electric vehicle start-ups are seeking to go public through a backdoor listing in cooperation with (SPAC), a special purpose acquisition company.
According to preliminary statistics, in the past month, including Faraday Future (FF) and Baiteng Motors with Chinese background, as well as a number of start-ups from the United States, Britain and Canada, such as Lucid Motors, Xos, Arrival, Lion Electric and other start-ups, have chosen this path.
"there have been no new moves recently, but they are still moving forward step by step." On February 23, a person in charge of Baiteng Automobile said. For the claim that Baiteng will be listed through SPAC, Baiteng has previously said that it is unable to comment on the rumor, "but will consider a variety of financing means to support the company's business development."
Unlike Baiteng Motors, FF has made it clear that it will go public through SPAC, raising as much as $1 billion. "there will be no news in the near future, and now we are waiting for the final approval of [the Securities and Exchange Commission]." Some FF insiders disclosed the latest progress to the Financial Associated Press.
However, on the same day that the above-mentioned FF insiders disclosed the relevant information, the reporter learned that Myoung Shin Group, a large Korean automobile industry group, which is the contract manufacturer of FF, has recently received a total of 55 billion won (about 320 million yuan) investment from private equity fund SGPE. In the eyes of industry insiders, the MOU signed by Mingxin Group and FF has become the key to the success of this round of financing. This also shows from another angle that the progress of FF listing is relatively smooth at present.
In addition to the above two electric car start-ups with Chinese backgrounds, Lucid Motors, which was born in the United States, has also been revealed to be listed through a merger with Churchill Capital Corp IV through SPAC. Lucid is valued at $24 billion, the source said.
The electric carmaker, which is on the other side of the ocean, has a long history with Chinese carmakers. In January 2014, BAIC invested $100m in Lucid Motors C round financing, with a stake of 25.02%, making it the largest shareholder in Lucid Motors. In July of the same year, Jia Yueting, founder of FF, personally invested 200 million US dollars in the company, making it the company's second largest shareholder. BAIC transferred its stake to Jia Yueting in 2015, and Jia Yueting became the largest shareholder in Lucid Motors, with a stake of nearly 40 per cent at one point. However, with the outbreak of Letv's ecological crisis, Jia Yueting sold all his Lucid Motors shares.
According to foreign media reports on February 22nd, Xos, a US electric business vehicle manufacturer, has agreed to go public through a merger with NextGen Acquisition, a SPAC company, with a valuation of US $2 billion. Prior to this, electric car manufacturers Arrival and Lion Electric, respectively from the UK and Canada, also announced that they would go public through SPAC. Among them, the transaction between Arrival and CIIG Merger Corp is expected to be completed in this quarter.
According to industry insiders, electric car manufacturers need to raise large-scale funds to support their operations, and SPAC has been very popular since 2020, and this threshold and relatively low-cost approach is just right for start-ups.
According to public data, in the three years from 2018 to 2020, the number of companies listed through SPAC was 46, 59 and 248 respectively, and the total amount of money raised (including oversubscription) was $10.75 billion, $13.6 billion and $83 billion respectively, with an average of $234 million, $231 million and $335 million per company.
By 2021, the speed of listing through SPAC will be accelerated again. As of February 22, 2021, a total of 165 companies have been listed through SPAC, raising a total of $49.78 billion (including oversubscription), more than half of last year, while the average amount raised is $302 million, close to the 2020 level.
In the field of electric vehicles, there are no lack of precedents for companies listed through SPAC, including hydrogen truck manufacturer Nikola, vehicle lidar company Velodyne LiDAR, commercial vehicle electrification power system solution supplier Hyliion and so on.
"SPAC listing model has the characteristics of fast time, low cost, simple process and guaranteed financing, so it has great advantages for both investors and target enterprises." Some industry analysts said that at the same time, as the epidemic continues, the global financial easing policy has led to a large amount of money flowing into SPAC, which has further led to the cooperation between SPAC and entity companies, including electric car manufacturing.
