Over the past year, many Special Purpose Acquisition Companies (SPACs) have agreed to merge with electric vehicle (EV) companies. However, many of these EV companies are tiny, have yet to generate revenue, and rely heavily on extremely bullish market forecasts to attract investors.

At first glance, the electric vehicle market backed by PSPC might look like a speculative swamp filled with overvalued stocks. But some of these companies are already producing vehicles and generating real income.

Today we’re going to take a look at two of these best-run EV companies: Lucid group (NASDAQ: LCID), which went public by merging with Churchill Capital IV Corp. earlier this year, and Gogoro, who plans to merge with Poema Global Holdings (NASDAQ: PPGH) in the first quarter of 2022.

Lucid aims higher than Tesla

Lucid has caught the attention of investors a lot as it is headed by Peter Rawlinson, You’re here‘s (NASDAQ: TSLA) former head of engineering.

Like Tesla, Lucid makes premium electric sedans. But its first vehicle, the Lucid Air, can travel up to 520 miles on a single charge, beating Tesla’s longest vehicle (the Model S Long Range) by over 100 miles.

Lucid is also targeting a higher end market than Tesla. Its entry-level Lucid Air costs $ 77,500 before deducting federal tax credits, while the customer-configured “Dream Edition” version costs $ 169,000.

Unlike Tesla, which is aggressively expanding its global network of more than 25,000 Supercharger stations, Lucid plans to rely on third-party charging stations instead of building its own proprietary charging network.

Gogoro carves out a niche with electric scooters

Taiwan-based Gogoro sells electric scooters and operates a nationwide network of more than 2,000 interchangeable battery stations.

Image source: Gogoro.

Instead of plugging in the scooter and waiting for it to charge, its drivers (who pay a monthly subscription) can simply replace the old battery with a new one in seconds. Gogoro has also signed partnerships with other manufacturers of electric scooters that allow their users to swap their batteries at its stations.

Gogoro’s newer scooters cost around $ 2,000, making them a bit more expensive than gasoline scooters, but they can go over 100 miles on a single charge. Gogoro currently generates most of its revenue from its Taiwan scooter sales, but expects its overseas scooter sales, charging stations, and battery subscription fees to increase significantly over the years. coming years.

Prior to co-founding Gogoro with Matt Taylor, CEO Horace Luke served as Chief Innovation Officer at HTC, as well as the leader in product ideation and brand development at Microsoft.

How fast are Lucid and Gogoro growing up?

Lucid recently began shipping its first batch of 520 Lucid Air “Dream Edition” sedans, and it expects to be able to manufacture approximately 20,000 Lucid Air sedans in 2022 and generate $ 2.2 billion in annual revenue.

Lucid has the infrastructure and the demand to meet that goal: Its new plant in Arizona has a maximum annual production capacity of 53,000 vehicles, and it already exceeded 13,000 reservations in September.

However, Lucid would still be eclipsed by Tesla, which has already delivered 627,350 vehicles in the first three quarters of 2021. Lucid is also deeply unprofitable: it racked up $ 3.18 billion in losses in the first half of 2021 without generating any revenue. revenues, and its losses will likely increase next year as it ramps up production of thousands of new vehicles.

Gogoro’s revenue fell 17% to $ 364 million in 2020 as its scooter sales slowed during the pandemic, and he expects another 10% drop to $ 327 million this year. Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 9% to $ 42.1 million in 2020, and it forecasts a decline of 72% to $ 11.8 million this year as it expands its material business (scooters and charging stations) at a loss.

These short-term growth rates look dismal, but Gogoro expects its annual revenue to skyrocket at a compound annual growth rate (CAGR) of 74% between 2021 and 2024 to hit 1.7 billion. dollars, and its Adjusted EBITDA skyrocketing at a CAGR of 185% to $ 272 million.

It expects these explosive growth rates to be fueled by its expansion into India and China, and its total subscriber base to grow from 449,000 this year to 2.95 million by 2024. These estimates are breathtaking, but they’re also far more speculative than Lucid’s shipping estimates for next year.

Which stock is the best value?

Lucid has an enterprise value of $ 68 billion, which values ​​the company at 31 times its sales target for next year. Gogoro plans to go public with an enterprise value of $ 2.35 billion, which would value the company at less than five times its estimated revenue of $ 500 million in 2022.

Lucid’s valuation is rich, but it could be justified if it hits its sales target next year and continues to ramp up its production capacity. Meanwhile, Gogoro looks cheap, but his long-term forecast looks too high.

These two EV stocks are speculative. But if I had to choose one over the other, I would probably stick with Lucid because he sets more realistic short-term goals. Gogoro’s goals may be achievable, but I’ll have to see him reverse his recent declines before I believe his bullish narrative.