Canoo Is the Latest EV Company Using a ‘Reverse Merger’ to Go Public

There are countless electric vehicle startups nowadays and they all tend to make the same kind of promise about revolutionizing the automotive industry by moving faster and being bolder than dinosaurs like Volkswagen or Ford.

But the thing they all have in common is they’re all trying to ship variations on a theme. Namely, high-end cars with Ferrari performance that you or I will never be able to buy.

That’s why the first electric vehicle (EV) from California startup Canoo feels so refreshing.

Unveiled last year, the company’s first EV is not trying to do much of anything beyond serve as a utilitarian (but still playful) way for people to get around when it launches in 2021 in the US and China.

And it’s something that far more people should be able to interact with, thanks to what should be a more affordable subscription-only approach that will include things like registration, maintenance, insurance management and charging.

Canoo’s first vehicle, which is also called Canoo, is a sort of boxy, modern take on the Volkswagen Microbus. It has a sweeping glass windshield, and is dotted with lots more windows that follow right to the back of the vehicle. Some windows even pop out, just like on those old Microbuses.

The vehicle’s interior also has a Microbus vibe. But you won’t find regular rows of seats behind the driver and passenger. Instead, Canoo has designed a bench seat that curves around the whole rear end of the vehicle. This creates a more communal experience when traveling with friends or in a ride-hailing setting.

It also creates a more comfortable space that can be used when the vehicle is parked. There are jump seats that fold down on both of the rear doors, as well as two more that fold down from the backside of the two front seats.

This approach is what helps give the vehicle such a spacious interior. Canoo says its comparable to the interior space found in a large SUV, all in a total package that’s only about seven inches longer than a Volkswagen Golf.

Canoo says its first vehicle will offer about 250 miles of range with an 80kWh battery. A single motor on the rear axle will be able to generate 300 horsepower, though this vehicle is not about quick off-the-line performance.

Instead, the peppy motor will help make sure the vehicle can move swiftly whether it’s operating at the 2,020-kilogram (4,453 pound) curb weight or the 2,600-kilogram (5,732 pound) gross vehicle weight.

The vehicle is outfitted with seven cameras, five radars, and 12 ultrasonic sensors, which Canoo claims will help enable autonomous driving some day down the road.

How and When Canoo Is Going Public

Canoo is going public at a valuation of $2.4 billion in an effort to raise enough money to help bring its VW microbus-style vehicle to market by next year.

Last week, the company announced it was merging with Hennessy Capital Acquisition Corp. (NASDAQ: HCAC).

finviz dynamic chart for  HCAC

Hennessy Capital is another one of those “blank check” special purpose acquisition companies (SPACs). As a result, Canoo will become a publicly traded company listed on the Nasdaq under the new ticker “CNOO” later this year.

It’s the same type of “reverse merger” move that hydrogen trucking company Nikola Corp. (NASDAQ: NKLA) pulled off earlier this year to go public and that EV startup Lordstown Motors is currently trying to execute.

Canoo is unique because it plans to offer its EV on a subscription-only basis when it goes into production in 2021, and it wants to make other vehicle “cabins” that will use the same underlying “skateboard” platform (the full package of the battery pack, electric motors, and other electronics that make the vehicle move).

Originally called Evelozcity, Canoo was founded in late 2017 by Stefan Krause and Ulrich Kranz after they split off from struggling EV startup Faraday Future. They had been hired earlier that year as part of an attempt to save the startup from financial collapse, but ultimately, they left after clashing with Faraday Future founder Jia Yueting.