EV startups need more money and they desperately need it

Between 2020 and 2021, a number of electric vehicle startups reached out to the public through contracts with Special Purpose Acquisition Agencies (SPACs), raising a lot of money in the process. However, many of these companies are now in dire need of additional funding.

Recently, Canoo issued a warning to shareholders that its future was an “ongoing concern” and that it had only $ 104.9 million in cash reserves as of March 31st. This is far from the যে 600 million it has publicly raised and left. The quarter before consolidation in December 2020 meant less than that.

Read more: Kanu sues Chinese investment for $ 61 million as it fights for survival

To keep it afloat, Kanu said it secured an additional $ 300 million in funds from existing shareholders and an equity purchase agreement with Yorkville Advisors. However, Bloomberg says it needs more money than that, suggesting Canu could burn $ 1.1 billion by this year and 2023.

It’s a similar story at Lordstown Motors. It generated about $ 675 million by going public during the SPAC bubble but recently had to delay plans for its Endurance pickup truck. What’s more, it was forced to sell its Ohio plant to Foxconn for 230 million in order to survive, and recently revealed that it was seeking an additional $ 150 million in funding. It comes despite an agreement reached in 2021 with Yorkville Advisors to sell মূল 400 million worth of stock.

“The story has changed” Bloomberg Analyst Joel Lavington says. “These companies are burning huge amounts of cash. Every day when the market goes down their liquidity becomes more challenging.

Livington said the cost of convertible loans used by these startups is more than 10 percent because they cannot issue a significant amount of secured loans because they lack solid assets to use as collateral.

Fischer is in a better position than some of his competitors. It also went public last year through a SPAC merger, creating $ 1 billion in funding. Significantly, it added কে 625 million to its war chest last August when offering convertible notes at a time when rates were much lower. It has enough money to bring the Ocean SUV to market, but speaking to Fischer’s recent earnings call, chief financial officer Geeta Gupta-Fisker said it needs to raise more money.

Leave a Reply

Your email address will not be published.