Why Apple entering the EV market is 'a good thing'
It was a bumpy stock market debut for the electric vehicle manufacturer Canoo (GOEV). The Los Angeles-based startup went public on December 22nd on Nasdaq through a reverse merger with special purpose vehicle (SPAC) Hennessy Capital. Shares initially rose but fell, closing 3.1% on Tuesday at 18.89 per share.
Canoo's Wall Street debut coincided with a report from Reuters that Apple (AAPL) plans to produce a passenger electric vehicle with a "breakthrough battery" by 2024. The news gave two companies that make light detection and ranging (lidar) sensors a jolt, a core component for self-driving cars that enables their computers to capture a 3D image of the world around them. Luminar (LAZR) stocks were up 6.3%, while Velodyne (VLDR) was up more than 10.9%. The launch of the QuantumScape (QS) electric car battery also received a boost.
Canoo executive chairman Tony Aquila told Yahoo Finance Live that the Apple electric car news had a ripple effect in the EV space.
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"I think with the news from Apple it created a lot more volume in the stocks around lidar and then in the EV guys than it is coming to light. But I actually think it's a very good thing that Apple is hinting at their involvement. Obviously it's a completely different vehicle than what we're focusing on, ”says Aquila.
Canoo plans to use the capital raised through the merger to begin limited production of its first electric vehicles in 2022. Last week, a multi-purpose electric delivery van that is expected to cost around $ 33,000 was taken out of service.
Canoo's all-electric "multipurpose" delivery truck starts at $ 33,000. It will go head-to-head with similar EV vans from Ford, Mercedes, and Rivian.
Canoo is also planning to launch a seven-passenger electric car that will be offered through a subscription service. Instead of buying or leasing, customers pay a monthly fee that bundles maintenance, top-up, and insurance.
The company has partnered with Hyundai (HYMTF) to jointly develop technology, but has yet to sign a contract with a contract manufacturer to build its first vehicles.
"We talk to everyone," says Aquila. “There are certain parts of the IP line that we want to make sure we are very focused on control, much like we did with the apples of the world. And then, of course, work intelligently and efficiently with external production for the assembly of vehicles. "
Canoo forecasts sales of $ 1.43 billion and an initial profit of $ 188 million in 2024.
Canoo's fully electric "Loft on Wheels" for seven passengers will be offered for a monthly subscription from 2022.
“The demand is so high and it will only grow. If you think of three to four generations of cars, we will be 80% electric and 20% fossil fuels, ”says Aquila. "I think where Apple will go a long way for everyone in the industry is in the battery sector."
Apple's planned electric car is said to have a "monocell" battery design that could significantly reduce battery costs and improve the vehicle's range.
Aquila also believes Apple could benefit the EV market with its software technology. “I think it will be helpful. They're all hands on deck when you think about fleet demand and rotation. So there is a lot of space and I think that it is good for Apple to come in. "
Alexis Christoforous is a presenter and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.
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