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S&P 500   3,850.02
DOW   31,168.15
QQQ   323.81
S&P 500   3,850.02
DOW   31,168.15
QQQ   323.81
S&P 500   3,850.02
DOW   31,168.15
QQQ   323.81
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Two More EV Startups For Your Watchlist

Tuesday, January 12, 2021 | Thomas Hughes
Two More EV Startups For Your WatchlistThe EV Market Is Growing, Growing, Growing

The EV market is going to be one of if not the hottest growth story over the next few years. The total market is worth less than 3% of vehicle sales worldwide and expected to grow at a 35% to 45% CAGR over the next two decades. Based on what we’re seeing in the market today, that estimate could be far too low. The next five to ten years may see its CAGR in the triple-digit range before falling off over the next decade.

Canoo Seized Up For Partnership Opportunity

Canoo (NYSE:GOEV) is a great example of two trends within the EV market. The first is that start-ups and early-phase production companies are using SPACs to go public. The SPAC or special purpose acquisition company is the fastest and so far the surest way for these high-risk companies to go public and a means that will see more use in the year ahead. Canoo finalized its merger with Hennesey Capital Acquisition Corp IV in late December and seen a surge in shares prices if one laced with volatility.

Shares of Canoo got another jolt early in the week following a report it was in talks with Magna International (NYSE:MGA) over a manufacturing partnership. Magna International manufactures components, parts, and assemblies for OEMs worldwide and would be a help in achieving Canoo’s ultimate goal. The company has a number of vehicles in the design phase with its multi-purpose delivery vehicle slated for limited production sometime in 2022. The news is only the latest in a string of headlines linking up-and-coming EV names with higher-profile manufacturing partners. If completed Canoo’s truck would be competition for Workhorse Group’s C-series vans although Workhorse will have at least two years head start.

Magna International is a notable favorite of the analysts. The company has been making a series of next-generation initiatives that focus heavily on electrification, robotics, and 5G/smart-cities. Bank of America has the stock rated a buy and listed on not one but four of its thematic investments lists with long-term, secular tailwinds.

Two More EV Startups For Your Watchlist

And The Next EV SPAC Is .... Lucid Motors

While Lucid Motors is not yet a publicly-traded company it soon will be. The company announced it was planning to go public this year and looking to do it via SPAC. The management company in question is Churchill Capital Corporation IV (NYSE:CCIV) and could complete within the 1st half of 2021. The deal is all the more exciting because Lucid Motors expects to begin production on its flagship model the Lucid Air this year and has a cheaper version lined up as well. While still early in the game, Lucid Motors could become a rival if not outright competition for Tesla and others looking to get into the sedan arena.

The Lucid Air is expected to sell for $77,400 before the federal EV tax credit. It comes with over 400 horsepower and a range of 406 miles. The higher-end Dream and Grand Touring models will go on sale as early as the 2nd quarter of 2021 while the lower-end base-model may not come to market until 2022. Execs are hoping to make a deal with Daimler for sales and distribution rather than compete in the market directly but, either way, this is definitely one EV company to keep an eye on.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Canoo (GOEV)0.1$17.16+2.9%N/AN/AN/AN/A
Magna International (MGA)2.1$75.69+4.4%2.11%51.49Buy$63.90
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