This week’s announcement that Canoo would sell its cool little van/truck deal for under $35,000 next year may mean that the company believes it will sell that cool little van/truck deal for under $35,000 next year. It may also have been related to another announcement, that Canoo is under investigation by the Securities Exchange Commission, which is ostensibly an agency charged with enforcing whatever finance laws still exist.
Obviously, developing, building and bringing a new to market car is massively difficult and outlandishly expensive, so these companies rely heavily on investors to pay for everything. Some of the investors are venture capitalists, some are governments — in the case of publicly traded companies some are institutional investors and some are regular people. Most car companies have stock, but unlike say General Motors or Ford, a company like Canoo doesn’t have an actual product to sell to generate capital. So, they ask people to bet that they’ll be successful, they ask them to buy stock.
Over the past decade or so, the primary driver of automaker decision-making seems to have become the performance of Tesla stock. Mainstream automakers have set records in sales, in profits and in just about every other metric, but they can’t touch Tesla’s share price. At first, they tried to rebrand as tech companies. When that didn’t work, almost every one of them started making the leap to building EVs.
There’s no real guarantee that consumers or investors will care. Pretty wild!
There are a lot of appealing electric cars potentially coming to market, but the ones that really appeal to me personally are the ID. Buzz, the Rivians and of course, those wonderful little Canoos. If they some how make it to market, I’d sure like to buy one and I’m sure I’m not alone.
But I’m not sure I’d invest my savings on them getting there. Good thing I can’t ethically own a stake in a car company so I don’t have to worry.
What about you? It doesn’t have to be a new EV start up, there’s got to be a company you think is headed for bigger and better things. Which company are you bullish on? Which car company are you investing in?