What's Next for EV Trucks?

Consumer charging electric truck
Consumer and commercial trucks are the next market for electric vehicles, and investors are jumping aboard, according to experts. (Getty Images)

Shortly after California Governor Gavin Newsom called for a ban of all gas-powered vehicles by 2035, electric vehicle experts weighed in. The following is an excerpt of an interview appearing in Forbes Magazine by Suzy Taherian, a UC Davis Graduate School of Management lecturer. She addresses the investment aspects of the EV market in a conversation with a top investor in the field.

Nikola, the electric truck startup, burst onto the Special Purpose Acquisition Company, or SPAC, market this past summer with an $11-billion valuation. Their success triggered a SPAC frenzy in the electric vehicle market with Fisker Inc, Lordstown Motors, Canoo, and Hyliion quickly following with their SPAC announcements. Going public via a reverse merger with a SPAC continues to be an attractive option so expect to see more partnerships between SPACs and EVs. 

Kevin Landis, CEO and President of Firsthand Technology Value Fund (NASDAQ: SVVC), a publicly traded venture capital fund, has been an investor in the EV space for the last 10 years. He shared his views on the SPAC-EV market outlook and the players to watch.

Suzy Taherian: Do you expect to see the SPAC-EV activity to continue? 

Suzy Taherian


Kevin Landis: This SPAC process works well for EV companies. Building a vehicle company requires significant capital and going public via a reverse merger is a good way for the EVs to raise money. Public markets see strong growth in the EV sector, which is driving a strong appetite from SPAC investors.

Taherian: How big is the EV truck/bus market?

Landis: We estimate this is a $400-billion market globally. As we heard last week, Governor Newsom of California is setting a mandate for new passenger vehicle sales in California to be 100 percent zero-emission vehicles by 2035. There are similar initiatives around the world for trucks and buses. We’ll see in our generation a phasing out of internal combustion engine trucks and buses, to be replaced by EV. So the market is huge. 

Taherian: Who are some of the other players in EV sector? 

Landis: There are several other players to watch. Firsthand is an investor in Wrightspeed, which builds range-extended electric powertrains for buses and trucks. (For transparency, it should be noted that the author recently joined Wrightspeed as CFO.) Buses and trucks are a big part of the emissions and fossil fuel consumption problem, so we think this is an important opportunity. Another player is BYD, or Build Your Dream, which is an EV company based in China with a focus on lower-cost solutions. Of course, Tesla is in the game as well. The CyberTruck has a unique futuristic design. While the vehicle looks amazing, its tow capacity is 7,500 lbs. which is less than a Ford F-150. So this truck is not addressing the heavy duty truck or bus market. Rivian is another player and they've had great success at get-go with Amazon, which became a key investor and also a customer. They're also tackling the SUV and pickup truck market. We can't forget the German auto makers. They have been late to the EV segment, but Daimler did announce they'll be launching an EV truck in next couple years. Since it appears they'll be focusing on all-electric models, they may be challenged to meet demand for longer range uses. Everyone has heard of Nikola, so we’ll let your readers read about their activities. We're also keenly watching Volvo, which expects to have some trucks available later this year. Ford just announced that they’ll debut a range-extended electric pickup truck. There are other startups too. For example, Lion Electric in Canada, announced last week that they'll deliver 10 electric trucks to Amazon.

Taherian: This seems a crowded field. How can investors analyze the differences?

Landis: The differentiation comes down to the technology, manufacturing, and commercialization strategy. For example, Wrightspeed’s engineering team has developed a patented lightweight range-extended technology; that means the trucks can drive longer distances, resulting in more flexibility to the customer; the lighter weight means more payload capacity, which means the fleet customer can get more revenue. The other key differentiator will be manufacturing capability. Once a company has designed a great technology, the next challenge is to scale up manufacturing and build the vehicles in large volumes. Wrightspeed’s solution was to bring on an experienced operations team with previous experience at Volvo, Toyota and Tesla to be very familiar with setting up and running automotive manufacturing. 

The final hurdle is commercializing the EV. Wrightspeed’s strategy was to focus initially on the powertrain. This allows fleet owners to easily drop in Wrightspeed’s technology to repower their existing fleets. They don't have to scrap their fleet to go electric. They're not worried about whether the airbags or the brakes will work. It de-risks the process for them and reduces their initial investment. 

Taherian: Do you think the outcome of the U.S. elections will have an impact on this SPAC-EV activity?

Landis: No. The push towards EVs is coming from multiple fronts. Last week, the Big 4 accounting firms announced a joint standard for reporting ESG (Environmental, Social, Governance) metrics. One of the key standard metrics is emissions. Companies will be required to report their emissions and that transparency will drive them to reduce their emissions to stay competitive. Investors and financial markets are pushing for this as well. For example, BlackRock (the world’s largest asset manager with $7.4 trillion under management) has been another major advocate for more transparency on ESG metrics. The Norwegian sovereign wealth fund, which is the largest in the world with over $1 trillion in investments, announced they would stop investments in fossil fuel companies. 

The trend towards EVs is going to continue.

Follow Taherian on LinkedIn. Check out her website or some of her other work here

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