(Bloomberg) – Wall Street’s obsession with electric vehicles is triggering a new round of public listings and helping clean technology companies form partnerships with powerful allies.
Proterra Inc., which makes electric buses and battery systems, announced on Tuesday that it will go public through special-purpose acquisition company ArcLight Clean Transition Corp., the latest in a wave of deals between automakers and SPACs. It turns out that Lucid Motors Inc. is in talks to go public through one of Michael Klein’s blank check companies, according to people familiar with the matter.
Meanwhile, Plug Power Inc. and Renault SA are forming a venture to build hydrogen-powered delivery vans.
The valuations of EV companies are rising as investors look for the next Tesla Inc., which saw its market capitalization reach a record high of $ 834 billion last week, surpassing Facebook Inc. The craze has even reached the heights of companies without income to speak – such as Nikola Corp. and Lordstown Motors Corp. Plug, which in 20 years has never reported an annual profit, is now worth another $ 29 billion – up from $ 1.2 billion a year ago.
“It’s an extremely hot industry – it’s on fire,” said Pavel Molchanov, an energy analyst at Raymond James & Associates. “Battery technology is becoming increasingly efficient, the charging infrastructure continues to develop and proliferate and there are many more vehicle models for buyers to choose from.”
Read more: EV-Tech Company Proterra to go public through ArcLight SPAC
It is not just Tesla that inspires investors to invest in clean vehicles. Joe Biden’s victory in the US presidential election promises to be a blessing for the emission-free transportation industry. During the campaign last summer, then-candidate Biden indicated greater government support for plug-in vehicles as part of a broader effort to combat global warming.
“There is a global interest in clean transport,” said Katie Bays, managing director of policy consultancy FiscalNote Markets. “Investment in clean transport companies is not a marginal issue. It is very popular. “
Electric vehicle stocks outperformed the broader market on Tuesday, after Xpeng Inc. obtained a $ 2 billion credit line from Chinese banks and the ongoing CES, formerly called the Consumer Electronics Show, contributed to a growing buzz about EVs, with General Motors Co. announcing plans to go into commercial electric delivery vehicles.
Xpeng led the pack, with its American Depositary Receipts up 17%, followed by strong gains from Li Auto Inc., Nikola Corp. and Tesla Inc.
The Lucid transaction can be valued at up to $ 15 billion, according to people familiar with the matter who asked not to be identified because it is private. The EV maker, which is supported by the Saudi Arabian sovereign wealth fund, targets the luxury segment of the market and its CEO, Peter Rawlinson, was previously Tesla’s chief engineer on the Model S sedan.
Proterra, meanwhile, is the latest EV maker to go public through a SPAC merger as investors’ appetite for EVs heats up. Blank check companies like ArcLight Clean have emerged as a preferred way to raise capital, with SPACs raising a record $ 79.2 billion in 2020, to become one of the largest segments of initial public offerings during the year. Nikola and Fisker Inc. also went public through SPAC deals last year.
ArcLight Clean’s shares were up 92%.
“This is really a turning point for the industry,” said Jack Allen, president and CEO of Proterra, in an interview. “Doing a SPAC allows us to go faster and be able to really accelerate the investments that are ahead of us in all three business segments that are generating revenue today.”
See also: Renault, Plug Power Form Enterprise for hydrogen delivery vans
Plug Power’s venture with Renault is the latest highly successful business for the company based in Latham, New York, which has spent decades trying to open a niche for hydrogen fuel cells that produce electricity through an electrochemical process instead combustion.
Last week, Plug announced a $ 1.5 billion investment by SK Group in South Korea to promote the technology across Asia. When produced with renewable energy and used in a fuel cell, hydrogen can provide energy without emissions of greenhouse gases, making it a potentially potent weapon in combating climate change.
Plug and Renault will offer the vehicles and hydrogen fueling stations to supply them, according to a statement on Tuesday. They plan to start production in early 2022 at an existing Renault plant in France, building tens of thousands of light commercial vehicles annually by 2030. Financial details have not been released.
“We have the vehicles, the service, the stations – everything you need to succeed,” said Plug CEO Andy Marsh in an interview.
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