You Placed the Wrong Bet on Nikola, So What’s Next? — Part I
By: Diana Yao
Tags: Electric Vehicles, Autonomous Cars, Tesla, Venture Capital, Renewable Energy

Photo by Jasper Geys on Unsplash

Lordstown Motors Corp.

Founded: 2018, Lordstown, OH

Business Description: Lordstown manufactures full-size electric pickup trucks with ~250 miles in range and 30 minutes to recharge on a fast charge. One of the truck’s standout features is that it is powered by four electric hub motors, with one in each wheel (as opposed to placing them on the axle). This makes it possible to precisely deliver differing amounts of torque to each wheel, which helps in tough driving conditions. Their first model Endurance will start at $52,500, which will be eligible for the $7,500 federal tax rebate.

Latest Status: started trading as Nasdaq:RIDE on Oct 26, 2020

Transaction Structure: $280M from SPAC DiamondPeak and PIPE of $500M (including $75M from GM)

Valuation: $965M EV; 1.6x 2024E EBITDA (9.0x 2024E EBITDA discounted back 2.5 years at 20%)

Benchmarking: Fisker, Hyliion, Nikola, Tesla, Paccar, Cummins, Navistar, Allison Transmission

Stage of Development: pre-revenue; has received 40,000 pre-orders for the truck which represents $1.4B in potential revenue; current plan is to deliver the truck to the market by September 2021

Hyliion Holdings

Founded: 2015, Austin, TX

Business Description: Hyliion makes hybrid electric powertrains for Class 8 commercial trucks using a low-cost fuel source of renewable compressed natural gas (R/CNG). The powertrain produces electricity at 32% less than the average grid cost, which yields a seven-year cost-of-ownership unmatched by any diesel, battery-electric or hydrogen fuel cell Class 8 truck under development according to the company. The powertrain also will provide 25 miles of pure electric vehicle range in cities adopting zero-emission zones.

Latest Status: started trading as NYSE:HYLN on Oct 2, 2020

Transaction Structure: $235M from SPAC Tortoise and $325M from private placement

Valuation: $1.1B EV; 1.8x 2024E EBITDA (8.0x 2024E EBITDA discounted back 3 years at 20%)

Benchmarking: Nikola, Tesla, Nio, BYD, Cummins, Wabco, Allison Transmission, Meritor, Volvo, Paccar, Traton, Navistar

Stage of Development:

Signed contract with Agility, a logistics company, for 1,000 trucks to be delivered in 2022

Hyliion also plans to deliver a hydrogen fuel cell solution when the market develops; it is in discussions with Faurecia and Symbio for collaboration and with a Texas-based fleet customer for initial deployment

Fisker Inc.

Founded: 2016, Manhattan Beach, CA

Business Description: Fisker manufactures premium affordable electric vehicles operating on an asset-light model. The company’s first model Ocean is a fully electric SUV with premium styling and features and has been designed to be the world’s most sustainable vehicle, including extensive use of environmentally friendly and recycled materials. Ocean will start at $37,499 promising a 250–300 mile range per charge.

Latest Status: started trading as NYSE:FSR on Oct 30, 2020

Transaction Structure: $569M from SPAC Spartan Energy (owned by Apollo Global Management), PIPE of $500M, and Series C of $50M (from Moore Strategic Ventures, Tjuvholmen Ventures and other undisclosed investors)

Valuation: $1.9B EV; 0.6x 2023E Revenue and 4.3x 2023E EBITDA

Benchmarking: Tesla, Nio, Ferrari, VW, Chrysler, Nissan, Fiat, Peugeot

Stage of Development:

Pre-revenue; starts generating $556M in sales in 2022 — when the Ocean begins to arrive to customers

Signed an MOU with the Austrian automaker Magna Steyr for the production of its Dream electric SUV on Oct 15, 2020

The company also mentioned its negotiations with VW to access the auto giant’s modular electric drive matrix (MEB) platform for its Ocean electric SUV, but the contract has not been finalized yet

It plans to begin the production of Dream in Q4 2022 and the vehicles will still have a starting price of $37,499

Canoo Holdings

Founded: 2017, Los Angeles, CA

Business Description: Canoo is an electric vehicles developer. The heart of their products is the “skateboard” architecture that houses batteries and the electric drivetrain in a chassis underneath the vehicle’s cabin. This architecture frees up the space utility which allows their first passenger model to accommodate 7 seats in a footprint similar to that of a sedan. Their first passenger model Lifestyle Vehicle (LV) has a 250+ mile range per charge and can be charged up to 80% in 28min. It will be offered on a subscription basis.

Latest Status: the reverse merger with Hennessy was announced on Aug 18, 2020 and after approved (aimed to close by the end of the year) by the shareholders, the shares will be traded on Nasdaq under the ticker CNOO

Transaction Structure: $309M from SPAC Hennessy and $323M from PIPE (inclusive of participation from Hennessy and Canoo related parties)

Valuation: $1,841M EV; 5.75x 2025E Subscription Revenue + 2.75x 2025E Engineering & B2B Vehicle Revenue discounted 3 years back at 20% (based on the 2-year forward multiples benchmarked against Netflix and Tesla, respectively)

Benchmarking:

EVs: Tesla, Nio, BYD

AutoTech: Ballard, Plug Power, Nvidia, Mobileye, Xilinx, Cree, Melexis, Amberella

Mobility Platform: Uber, Lyft

Consumer Subscription: Peloton, Roku, Spotify, Netflix, Vivint, Alarm.com

Stage of Development: