Mobility SPACs: Hype or Reality?
The conversation begins with David sharing his thoughts on the current state of the mobility SPAC market. He brings up the valid point of who is conducting the scouting and due diligence on the deals.
Grayson then asks David about the supposed due diligence that Steve Girsky’s VectoIQ Acquisition Corp. did prior to merging with Nikola and taking the company public via a SPAC transaction. Building upon that conversation, David talks about the in-progress Nikola / GM deal that has yet to close.
Expanding upon the conversation around Nikola and GM, Grayson asks David if Nikola would even have made it through a traditional IPO. David does not think Nikola would have made it through a traditional IPO process.
David suggests that GM originally did the deal with Nikola because the company had a hot stock at the time. Was the Nikola stock craze driven by retail investors on Robinhood? Perhaps, but we do not know.
Now SoftBank and Apollo Global Management have announced that are launching SPACs.
Real money is getting into the game. To me, that is a good sign. Those guys are professionals who invested in everything from publicly traded stocks already to startups and other private players.
They have made a lot of money so it’s more clear that they know how to do due diligence.
It’s a better bet than the more well-known SPACs that are out there.– David Welch
Could this be a trend of blue-chip investment companies investing in less-risky electric mobility companies? BlackRock has invested billions in Rivian and Arrival. Both companies are being deemed less-risky than other mobility start-ups by the market. Rivian also has backing from Amazon.
Staying on the Amazon theme, Grayson and David discuss Amazon and mobility. What are the plans for Zoox? Will Amazon end up acquiring Rivian? Does Amazon introduce a mobility Prime service in the future powered by Zoox?
But who wants to own and manage the fleet? Does someone buy Hertz out of bankruptcy to carve out an autonomous vehicle management business? Or does Penske expand outside of trucks into autonomous vehicles?
Rounding out the fleet management conversation, Grayson asks David to share his thoughts on the Great Pivot from Self-Driving Cars to Self-Driving Trucks. The two discuss the economics of self-driving trucks and how the business has a path to profitability.
Did this path to profitability, impact Waymo’s decision to introduce self-driving trucks as the Waymo Via service? Grayson and David discuss Alphabet’s appetite to continue investing in Waymo without revenue.
When Alphabet breaks out Waymo revenue for the first time, it will have a positive impact on Alphabet’s stock price. One just has to look to the time when Amazon broke out AWS (Amazon Web Services) revenue and the impact the revenue breakout had on Amazon’s stock.
Grayson and David go on to discuss the Universal Driver debate and how developing autonomous technologies for trucks operating on highways is different than developing the tech for dense urban environments such as San Francisco.
Staying on the theme of companies that are developing the Universal Driver, Grayson and David discuss Aurora and their many pivots. The two discuss Aurora’s business model and their seemingly never-ending stream of partnerships with no commercially viable products. Evolving into a larger discussion, the two discuss the need for partnerships in the autonomous vehicle industry.
Closing out the conversation, Grayson asks David when Tata Motors will make a move and introduce self-driving Jaguars and Land Rover Range Rovers through a partnership with an autonomous vehicle company.
Recorded on Friday, October 16, 2020