At the SPAC of Dawn

Good morning! Watch this space moving forward as a roundup of evening filings as well as news nuggets to nibble on beside your morning coffee.

Another day has brought another SPAC EV deal (more on that to come), which is a sound these days as customary as church bells on Sunday. SPACs have taken 25 EV companies public since 2020, plus eight EV battery makers and eight EV charging companies. Six more EV SPAC deals were already pending completion.

So, in that environment, Ford’s (NYSE:F) third quarter earnings report yesterday dropped like a bomb in SPACworld.

In it, Ford announced $12 billion pullback in its planned spending on EV production, citing soft consumer demand. Its EV unit, Ford Model e notched -$1.3 billion in losses in the quarter – about double its shortfall a year before.

It’s clearly an ill omen for any company looking to get into the EV space if one of the major established manufacturers starts saying the market isn’t really there. But, there are particularities here that don’t all apply to most EV de-SPACs.

For one, Ford’s two all-electric consumer models are essentially electrified versions of its internal combustion best-sellers in the Mustang Mach-E SUV and the F-150 Lightning pickup truck.

This class of vehicles has its densest popularity in the suburbs and rural areas of the country where the consumer drive for clean energy options may not be as robust and where other infrastructure support like charging stations are not always as available. Not only would consumers have to get on board with that change, but they’re paying a significant premium to do so.

The electric Ford F-150 stats at $49,995, a full +44% increase over the starting MSRP of its internal combustion counterpart at $34,585. The Mustang Mach-E, meanwhile, is priced at $42,995 with no frills, which is an even steeper +53% over its internal combustion counterpart, the Escape, at $28,000.

Accordingly, Ford notes in its report that “many North America customers interested in buying EVs are unwilling to pay premiums for them over gas or hybrid vehicles”. That can certainly be true without being a referendum on EVs in general. It appears to be more of statement on the strategy of offering consumers two near-identical trucks – one with a gas tank and one with a battery for twice as much.

Deal Amendments

• Feutune Light Acquisition Corporation (NASDAQ:FLFV) entered a definitive agreement to combine with consumer EV maker Thunder Power at an enterprise value of $400 million.
• FC Barcelona and Mountain & Co. I Acquisition Corp. (NASDAQ:MCAA) amended their business combination so that the minimum cash condition is now $40 million from $50M. Additionally, FCB‘s previous unilateral termination right has been removed.

News and Rumors

• PR: United Homes Group (NASDAQ:UHG), which combined with DiamondHead in March, acquired Rosewood Communities, a neighborhood of cottage-style homes near Clemson University in South Carolina.
• Mintz: NET Power (NYSE:NPWR) CFO Akash Patel and General Counsel Jim Mahon discussed the company’s combination with Rice II in a panel highlighting current market challenges as well as the demands for a target company to demonstrate long-term planing and value.
• Mining Weekly: Critical Metals Corp, the company to be formed through European Lithium’s business combination with Sizzle Acquisition (NASDAQ:SZZL), has secured an additional $10-million equity investment for the Wolfsberg lithium project in Austria.