The year 2021 has started off on a high note for electric vehicle (EV) funding and it seems set to break the previous year’s records.
According to the research data analyzed and published by ComprarAcciones.com, electric vehicles raised a cumulative $6.45 billion in January 2021. Companies in the industry raised the funds through SPAC mergers, acquisitions, IPOs and other capital raises.
Based on Bank of America’s forecast, the global transition toward full electrification might cost over $2.5 trillion in the coming decade. The bank projects that the EV SPAC boom that characterized 2020 is set to continue through 2021.
Global electric vehicle market to grow at 10.6% CAGR to $236bn by 2027
EV charging network EVgo announced a reverse merger with Climate Change Crises SPAC in January 2021. The deal will see EVgo receive $575 million in equity and will value the combined entity at $2.6 billion.
On the other hand, Electric bus maker Proterra and ArcLight Clean Transition Corp’s also announced a merger during the month. Their combined enterprise value will be $1.6 billion and raise $825 million.
Battery cells maker FREYR struck a deal with Alussa Energy Acquisition Corp. The deal will result in a combined value of $1.4 billion and $850 million in equity proceeds.
In view of the anticipated EV demand, the massive increase in SPAC mergers comes as no surprise. In fact, the US president announced plans to replace the entire federal fleet, 645,047 vehicles, with EVs.
According to Blastpoint, there was a 30% increase in US EV sales in 2020. In 2021, the analytics firm projects a 71% rise.
The global electric vehicle market was worth $121.8 billion in 2020. It will grow at a 10.6% compound annual growth rate (CAGR) to about $236.3 billion by 2027.
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