Electric Vehicle Company That Took Google 8 Years to Reach $10 Billion in Revenue Aims to Achieve It in Just 3 Years

[Asia Economy Reporter Park Byung-hee] Among U.S. startups, the company that reached $10 billion in sales the fastest is Google. Google surpassed $10 billion in sales eight years after generating its first revenue. Next, Uber achieved $10 billion in sales in nine years, while Facebook and Tesla Motors reached the milestone in 11 years.

In this context, companies aiming to surpass $10 billion in sales within the next three years are emerging rapidly. These are electric vehicle (EV) companies attracting significant investment. However, there are concerns that EV companies are presenting overly optimistic forecasts.

According to the Wall Street Journal on the 15th (local time), EV companies seeking to go public through mergers with Special Purpose Acquisition Companies (SPACs) are consecutively announcing ambitious goals to exceed $10 billion in sales within a short period.

Electric Vehicle 'Lucid Air' to be Unveiled by Lucid Motors [Image Source= Lucid Motors Twitter]

British luxury EV manufacturer Faraday Future, electric van and bus maker Arrival Group, and Fisker have announced goals to surpass $10 billion in sales within three years of generating their first revenue. Arrival expects to start generating revenue this year and has set a sales target of $14 billion for 2024.

Lucid Motors, which recently gained attention by announcing an agreement to merge with Churchill Capital SPAC, aims for $22 billion in sales by 2026. Lucid has recently started selling batteries and plans to launch its first electric vehicle this year.

Israeli EV parts supplier RE Automotive and Archer Aviation, which plans to produce helicopter-type electric vehicles, have set a goal to reach $10 billion in sales within seven years.

All these EV companies are preparing to go public through mergers with SPACs. Through this, they intend to attract large-scale investments and rapidly expand their businesses. Meanwhile, the SPAC investment fever is heating up.

According to Bloomberg, the amount of investment raised through initial public offerings (IPOs) was only $37.2 billion in the first quarter of last year, but this year it has already exceeded $160 billion. Of the funds raised exceeding $160 billion, half were raised through mergers with SPACs.

Concerns are emerging among market insiders. They argue that EV companies are misleading investors with overly rosy forecasts. Relatedly, there are calls for regulatory authorities to strengthen oversight of de facto backdoor listings through SPAC mergers. Compared to traditional IPOs, listings through SPAC mergers face looser regulations and oversight. As a result, companies pursuing SPAC mergers tend to inflate their performance forecasts.

Gavin Baker, who worked at Fidelity Investments in the early 2010s and invested in Tesla, pointed out, "It is easy to create a car prototype that looks great and seems to run well in a PowerPoint presentation. But mass-producing high-quality actual cars is a difficult task."

Fisker's spokesperson Simon Sporrell said that by outsourcing car manufacturing to other companies, they can increase initial production volume faster than Tesla. However, Baker said it would be difficult for emerging EV companies to expand production two to three times faster than Tesla.

Pavel Molchanov, an analyst at Raymond James, pointed out that EV companies should reduce their excessive optimism regarding performance forecasts. He noted that as governments support EVs, new electric vehicles may flood the market, potentially causing supply to exceed demand, and criticized EV companies for being overly optimistic about demand.

Robert Jackson, a professor at NYU Law School and former chairman of the U.S. Securities and Exchange Commission (SEC), said that due to lax regulations on listings through SPAC mergers, companies are exploiting this to gain profits, and called for stronger regulations.

This content was produced with the assistance of AI translation services.