Some folks might say that 2020 was the year of the electric vehicle. Others might call it the year of the special purpose acquisition company (SPAC). Investors will find that Canoo (NASDAQ:GOEV) is associated with both of those trends. Yet, they might want to know what makes GOEV stock different.
Technically, GOEV isn’t a SPAC stock. It’s better described as a post-SPAC stock since the merger already took place.
Also, GOEV is a new stock that started trading on Dec. 22. As a result, you might have some difficultly finding information on GOEV stock.
Therefore, I have two recommendations for you. First, hop on over to InvestorPlace contributor Sarah Smith’s informative primer on GOEV stock. Then, come back here for my take on what could be a high flyer in the new year.
A Closer Look at GOEV Stock
Let’s rewind a bit. Not too long ago, there was a shell company known as Hennessy Capital, which traded on the NASDAQ Exchange under the ticker symbol HCAC.
Don’t bother to look for HCAC stock now, because it’s gone and it’s been replaced by GOEV stock. Hennessy Capital fulfilled its purpose in helping Canoo become a publicly traded company, so we must say good-bye to HCAC and hello to GOEV.
Hennessy announced the Canoo SPAC merger back in August. Canoo is an electric vehicle designer and manufacturer. That’s a red-hot market niche, and SPAC’s in general were buzz-worthy in 2020.
As a result, early investors in HCAC stock did well for a while. However, now trading as GOEV stock, the bulls don’t seem to be in charge anymore.
From Dec. 22 to Dec. 31, GOEV stock dropped from $21 to less than $14. That’s a substantial haircut in a short period of time. Yet, there didn’t seem to be any bad news associated with this price decline. If anything, this could be an opportunity to get in at a more favorable price point.
Big Vehicle, Small Price
So again, the question remains: how is Canoo different from other electric vehicle companies? Mainly, the difference can be summarized by saying that Canoo offers very modern-looking and versatile multi-purpose electric vehicles at reasonable prices.
On Dec. 17, Canoo unveiled its fully electric multi-purpose vehicle model. It’s set to be available on a limited basis in 2022, and scaled production is planned for 2023.
This vehicle looks sleeker and “cooler” than the vast majority of delivery trucks you’ll see on the roads today. Somehow, it’s box-shaped without being boxy. Check out the company’s web page and you’ll see what I’m talking about.
The MPDV1 will provide 200 square feet of cargo volume, while the MPDVs will provide 450 square feet of volume. In light of those stats, it’s pretty amazing that these vehicles will start at around $33,000.
Future Generations
The two MPDV models aren’t Canoo’s only planned electric vehicle offerings. However, they are a fair representation of the company’s bold, future-facing ambitions.
Much of the Canoo vision can be attributed to the company’s executive chairman, Tony Aquila. He’s preparing for rapid expansion, not just within his company but in the market generally:
“The demand is so high, and it’s only going to grow. When you think about three to four car generations from now, we’re going to be 80% electric and 20% fossil fuel.”
Along with that bold but not inconceivable prediction, Canoo expects to generate revenues of $1.43 billion in 2024, with the company’ first profit achieved at $188 million.
The Bottom Line
The public hasn’t yet seen all of Canoo’s proposed electric vehicle lineup. So, it will require some faith and risk tolerance to invest in this company.
Nonetheless, some investors might share Aquila’s vision and Canoo’s creative approach in the electric vehicle space. If you’re on board with this, then a moderately sized position in GOEV stock is worth considering.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
