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An Electrifying Future Ahead. Check out these 3 Companies that are disrupting the EV Space!

23 Mar An Electrifying Future Ahead. Check out these 3 Companies that are disrupting the EV Space!

The International Energy Agency predicts that Electric Vehicles, which stand at 3 million today, will grow to 125 million by 2030. The Global Electric Vehicle market is all set to compete with the internal combustion engine (ICE) vehicles in the next five-year, accounting for one out of every five cars sold by 2030, according to Seth Goldstein, an analyst and chair of Morningstar’s electric vehicle committee. The growth of this industry is a result of the initiatives by governments around the world, in the form of tax rebates, grants, and subsidies for adoption of renewable and more environmentally friendly options for transportation. Unlike conventional vehicles which can only replenish their fuel at specific public locations, Electric vehicles can be charged at home or commercial charging stations.

However, the limitation of sufficient charging capacity to cover long distances discourages the use of these vehicles. There is an increased focus on research and development activities, especially in the passenger car sector, to improve infrastructure and supply equipment and establish EV chargers at easily accessible public places, to allow long distance travel as well. Range anxiety which acts as the biggest impediment for the market at present, will soon be a thing of the past, with Companies racing to develop connectivity modules.

The demand for electric vehicles will also bolster the demand for ancillary industries such as engine components, electronics for propulsion systems, battery optimization and torque transfer devices. In fact, the demand for lithium, which is a crucial component of energy storage in transportation batteries, is likely to quadruple over the next decade according to Seth Goldstein.

A report by McKinsey estimates that by 2025, there will be more than 350 EV models introduced into the market, with ranges of 200 miles. However, a lack of charging infrastructure could hamper the growth in the market. The report also highlights the fact that besides price and driving range, lack of access to charging stations is the third most serious barrier to EV. However there has been a gradual decline in prices and improvement in driving range and companies are making a concerted effort to provide the requisite charging infrastructure. Furthermore, the total energy demand for electric vehicles in China, the United States and European Union alone will reach 280 billion kilowatt-hours by 2030.

Image Source: Mckinsey

There has been an increasing interest in EV’s owing to environmental concerns, which has prompted leading automobile makers such as BMW, Daimler, Ford, and Volkswagen to announce an investment plan for deployment of 400 charging sites across Europe, in addition to investing approximately $90 billion in electric vehicles, according to a report by Reuters.

According to the U.S Energy Information Administration, In the year 2019, renewable energy provided 11.5 quadrillion British thermal units (Btu) or 11.4% of total U.S. energy consumption, out of which, 56% was contributed by the electric power sector and 17 percent was from renewable energy sources.

The greatest advantage of renewable energy is their ability to reduce greenhouse gas emissions, by lowering fossil fuel consumption, the largest cause of carbon dioxide emissions. The renewable energy sector has now come under a sharp focus owing to Joe Biden’s administration’s plan to fight climate change with greater emphasis on clean energy and a mission to reach net-zero emissions by 2050.

The government’s position on clean energy was made clear by its recommitting to the Paris Climate accord and its call for moving to clean energy by 2035. The new administration will invest close to $1.7 trillion over the next 10 years in its bid for a “Clean Energy revolution” that aims to establish the US as the clean energy superpower and transform the energy sector by providing economic impetus.

Arcimoto, Inc. (NASDAQ: FUV)

Market Cap: $608.087M; Current Share Price: 16.77 USDChart
Data by YCharts

Arcimoto is the maker of the Fun Utility Vehicle or the FUV, a three-wheeled electric vehicle that caters to the needs of last-mile delivery, first responder scenarios and fleets. The Company’s flagship FUV is priced at around $17,900, can reach top speed of 75 kmph with instant torque and acceleration and can be charged through any standard 110v or 220v wall outlet. The vehicle is now available for pre-order on the west-coast and the state of Florida.

Image Source: Company

Deliverator, as the name suggests, is the Company’s next generation delivery vehicle that gives a 102-city mile range with top speeds of 72 KMPH. The vehicle’s compact size makes it easy to overcome challenges such as traffic and parking. The Company also offers Rapid Responder, a vehicle that cuts down on response times, while reducing carbon emissions and most importantly operating costs.

The Company recently debuted a prototype of its Roadster, a vehicle built on the Company’s patented three-wheel, all-electric platform at the world’s largest motorcycle rally, namely the 80th Annual Daytona Bike Week. The Roadster features dual-motor front-wheel drive, instant torque, and a fully-connected seating stance. Corbin – Pacific, an industry leader in manufacturing motorcycle seats and saddles, would be developing the vehicles seats and accessories for the vehicle.

Arcimoto intends to expand its delivery and service network and scale up its production in 2021. The Company had started its initial production in September 2019 for nearly 4000 pre-orders, however there was an impact of the COVID-19 pandemic on its production due to supply chain disruptions. In June 2020, the company entered into an agreement with HyreCar (NASDAQ: HYRE), to make Deliverator available for hire in Los Angeles, to meet the growing demands of home restaurant delivery and e-commerce.

In November 2020, Arcimoto entered into its first municipal fleet pilot program, with the City of Orlando, to test its vehicles across six city departments including Orlando Fire Department, Police Department, Code Enforcement Division, Permitting Services, Venues, and Parking Enforcement as part of a 90-day pilot program.

The Company got a lot of attention after it was called “Tesla Lite” by EV evangelist Ross Gerber, causing its stock prices to soar to over $36 per share and reaching the billion-dollar mark in market capitalization. The stock prices have fallen since to under $18, however the Company has made some amazing progress. Arcimoto is making the right moves, be it the expansion of its factory floor space, to the acquisition of Tilting Motor Works, a Company that makes hardware for motorcycles. All in all, the Company seems well-poised to capitalize the opportunities presented by the increasing incentives for EV adoption by the government and the favorable public outlook to environmentally friendly vehicles.

Canoo Inc. (NASDAQ: GOEV)

Market Cap: $3.61B; Current Share Price: 15.31 USDChart
Data by YCharts

Canoo manufactures Lifestyle and Multi-purpose delivery vehicles that incorporate cutting-edge safety features and user connectivity. The Company’s MPDV line is designed to offer greater productivity, efficiency, more cargo volume and cost savings compared to other EV’s in the market. Furthermore, Canoo has built an inimitable independently drivable modular platform that leverages its proprietary “skateboard” technology to offer features such as the first true steer-by-wire platform, an in-house ECU and battery management system and a composite leaf-spring suspension among others for individuals and businesses. The technology enables cost-efficiency in vehicle development and is designed to completely rethink EV architecture, while addressing the need for space and value.

Image Source: Company

The Company aims to redefine the EV architecture with novel designs and intends to launch its first consumer model in 2022, followed by a MPDV and a sport vehicle built on its proprietary platform.

In March 2021, the Company debuted a fully-electric pickup truck, which will be open for pre-orders in Q2,2021 and will be available for delivery from 2023. The pick-up truck incorporates unique features such as pull-out bed extension, options for cargo storage, flip-down side tables, side step + storage, modular bed with space dividers and a multi-accessory charge point to name a few.

Tony Aquila, Executive Chairman, Canoo, commented

“Our pickup truck is as strong as the toughest trucks out there and is designed to be exponentially more productive. This truck works for you. We made accessories for people who use trucks – on the job, weekends, adventure.”

In January 2021, the Company closed a merger with Hennessy Capital Acquisition Capital IV to become public and raised $607 million in equity capital to fund its EV’s. Canoo is planning a subscription model that does not involve conventional lease agreements or down payments or entail payment of maintenance and registration costs. The owners can lease the EV’s for a minimum period of one month, which drastically reduces the barriers to entry and may push more people to join the EV bandwagon.

Canoo is projecting a revenue of $1.43 billion in 2024, $2.341 billion in revenue in 2025 and a profit of $188 million through building 10,000 vehicles in 2022, 60,000 in 2024, and 95,000 in 2025.

Xos Trucks

XOS, Inc, creates cutting-edge electric commercial vehicles such as box trucks and vocational vehicles such as the X-Platform 1, besides providing industry-leading X-Pack battery solutions. The Company has already established robust partnerships with Loomis, UPS, Lonestar and Wiggins and is now planning to merge with NextGen Acquisition Corporation and become public. The Company offers Fleet-as-a-Service packages in partnership with DLL Group (financing services) and Dickinson Fleet Services (vehicle maintenance).

Commercial Vehicle Group, a leading developer of electric systems has announced a partnership with Xos, Inc, to offer comprehensive design and manufacturing services that encompass prototype design, product sampling, testing and validation of an electric system, to be incorporated into a fleet of medium to heavy-duty zero-emissions, electric vehicles. The Company is focused on creating low-cost, highly efficient state-of-the art medium and heavy duty electric commercial vehicles.

Image Source: Company

The Company is seeking to address the needs of the last-mile, on-highway and vocational vehicles and intends to stake its claim to the $100 billion total addressable market for medium- and heavy-duty last-mile commercial electric vehicles.

Xos commercial vehicles have been on road since 2018, which sets it apart from many EV’s that are still planning the launch of their vehicles. In addition, the Company has also established a valuable relationship with contracted customers and aftermarket partners such as Thompson, CAT, UniFirst, and Southern California Edison among others.

The global last-mile MD and HD market is worth over $ 34B in the U.S alone and the Company is aiming at a 35 percent CAGR in its target market through 2040. The Xos is upbeat about ample opportunities for growth as the rise of e-commerce is compelling seller fulfillment centers to shift closer to customers, thereby propelling the demand for last-mile delivery vehicles that are sustainable and cost-effective.

The Company has received a 1000-unit order from Thompson CAT through a multi-year purchase and distribution agreement that includes the delivery of 100 vehicles in 2021 and 1,000 vehicles in 2022, with an additional option for 1,000 vehicles in 2023. Furthermore, the Company has also entered into a 1,000-unit purchase and distribution agreement order from Lonestar, that services parcel delivery fleets such as FedEx.

Xos has a backlog of over 6000-units of contracted and optional orders and believes that it is ready to make the best use of the changing market landscape, with increased impetus on climate change on one hand and the burgeoning e-commerce on the other.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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