With Canoo and Hennessy SPAC, Another Public EV Maker Comes Public

Cars and Drivers

Published: August 18, 2020 10:18 am

It seems as though the market just cannot get enough of the electric vehicle (EV) craze. While Tesla and Elon Musk tend to dominate most of the media attention around EVs, special purpose acquisition companies (SPACs), or blank check companies, are merging into EV companies almost with regularity.

Hennessy Capital Acquisition Corp. IV (NASDAQ: HCAC) is now merging with Canoo Holdings Ltd., and it will create a reverse merger into a public company as a result of the business combination. Canoo’s description indicated that the Los Angeles-based company is developing breakthrough EVs. The post-merger company will retain the Canoo name and will trade under the CNOO stock ticker on the Nasdaq.

Canoo claims to have designed the world’s flattest modular “skateboard” platform, which is said to allow it to reimagine EV design and to maximize usable interior space to support a wide range of vehicle applications. The press release indicates that they are self-contained and independently drivable rolling chassis that directly house all the most critical components of an EV.

Ulrich Kranz is in charge of Canoo. He was with BMW for 30 years, where he led the development of models that include the BMW i3.

Tuesday’s press release also indicates that Canoo has developed proprietary electric drivetrain and battery systems, and all its electric vehicles will share the same skateboard while coming with different cabins. In short, the company’s modular approach is aimed to help efficient production at scale, targeting different markets and consumer segments at reduced costs.

As for the Hennessy Capital Acquisition transaction, this is said to bring roughly $600 million to support the EV launch and production, with the first launch date targeting 2022. The company also noted that it is targeting a subscription revenue model, with a business-to-business delivery vehicle program with a 2023 target.

As for the transaction details, the Hennessy/Canoo release indicated a private offering of more than $300 million that includes managed investment funds from BlackRock and other institutional investors. The company also noted that the pro forma equity value of the merger will be approximately $2.4 billion.

Canoo’s website shows one example of its EV called Beta and it does not look like other electric vehicles on the road.