Montreal electric jet-ski maker Taiga Motors plans to go public through a merger with a “blank-check” SPAC company while raising $100 million in the process.
The move is emblematic of companies taking advantage of investor demand for environmentally-friendly vehicles.
“Taiga’s mission is to revolutionize the powersports industry with all-electric, off-road vehicles that outperform peers without sacrificing the environment,” said CEO Sam Bruneau. “We plan to accelerate our existing production capabilities and execute on our pre-orders while moving full speed ahead with plans for a second, mass-production facility, which will significantly increase our capacity by 2025.”
Taiga will have an implied market capitalization of about $537 million (US$422 million) after the combination with the Canaccord Genuity Growth II Corp. That valuation includes a $100 million private placement with investors including John Risley’s Northern Private Capital.
Canaccord is an “SPAC,” which is shell corporation designed to take companies public without going through the traditional IPO process. SPACs pool funds in order to finance a merger or acquisition opportunity within a set timeframe.
Last year Taiga reached a deal with ABB Ltd. to offer its customers the Swiss company’s Terra wallbox charging stations. The deal is expected to be completed in April, and will give Taiga about $185 million in net cash proceeds to pursue its growth strategy.
The Canaccord SPAC raised $100 million in an initial public offering in April 2019. The company said at the time it would focus its search for target businesses in the cannabis sector, but that it wouldn’t limit itself to a particular industry or geographic region.
Who is Taiga Motors?
Founded in 2015, Taiga Motors makes electric recreational vehicles including Orca jet skis and Ekko Mountain snowmobiles. The vehicles reduce environmental impact and noise pollution of fossil fuel-powered rivals.
Per Electrek, the company spun out of McGill’s racing team. Its three cofounders, Paul Achard, Gabriel Bernatchez, and Sam Bruneau, worked on electric powertrains during their engineering studies. They focused on developing a lineup of electric snowmobiles and later unveiled their electric watercraft: The Taiga Orca.
Taiga’s electric snowmobile can go from 0 to 100 km/h (62 mph) in just 2.9 seconds, something Electrek wrote is “unheard of in a production snowmobile.” It can also travel for 140 km on a single charge.
Bruneau calls Taiga the only mass-production-ready electric powersport vehicle manufacturer, positioned to commence mass production and distribution of its offering in the near or medium term.
To date, a release says more than 760 local and international dealers have applied to carry Taiga’s products, and more than 200 commercial fleet operators have submitted applications to Taiga’s fleet program. To date, Taiga has received over 1,400 snowmobile and personal watercraft pre-orders.
Big plans in Quebec?
There are also rumblings that Taiga will build a 50,000-unit-per-year factory in Shawinigan, Quebec, says Electrek.
Taiga currently operates in a 50,000 square foot R&D assembly facility in Montréal, Québec, which is estimated to increase production capacity to 2,000 vehicles per year by the second half of 2021.
Taiga also has plans to build an approximately 340,000 square foot mass-production assembly facility over the coming years. The mass-production facility will seek to operate at peak capacity of 60,000 vehicles and 20,000 powertrains per annum by 2025.
EV companies going public is becoming a trend
Growing environmental concerns, as well as US President Joe Biden’s plans, have expedited demand for the electrification of passenger vehicles and commercial equipment, with off-road vehicle electrification “as the next logical step,” Taiga said in a release.
We’ve already seen Amazon make a huge investment in St. Jerome’s Lion Electric, in January. At the same time, Lion Electric announced it would go public via a merger with SPAC Northern Genesis Acquisition Corp.
Taiga’s release indicates that data projections indicate a $50 billion market opportunity for snowmobiles, personal watercrafts, other recreational marine applications, and side-by-side vehicles. There is also a potential $400 billion of upside identified in other off-road vehicles, like motorcycles, agriculture and commercial vehicles, construction and heavy machinery, and lightweight aviation.
Meanwhile, Taiga’s snowmobiles and watercrafts offer a lower total cost of ownership relative to traditional internal combustion alternatives. The company estimates that snowmobile fleet operators will earn potential average annual savings of over $2,000 per vehicle.