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Cramer Discusses EV SPACs, Highlights Fisker, Hyliion

On Thursday’s “Mad Money” show on CNBC, Jim Cramer changed his tone slightly and highlighted some of the electric vehicle SPACs.

· 10/16/2020 11:24

On Thursday’s “Mad Money” show on CNBC, Jim Cramer changed his tone slightly and highlighted some of the electric vehicle SPACs.

Cramer On SPACs: SPACs are basically investments that have “managers with a big pot of money they can use to make deals,” Cramer said.

There's too much hype around them, the CNBC host said. 

“That’s why I warned you away from that Nikola.”

Nikola Corporation (NASDAQ:NKLA), a former SPAC, went from $75 to $20 after questions about its technology surfaced.

After being asked a question about Kensington Capital Acquisition Corp (NYSE:KCAC) weeks ago, Cramer promised viewers he would look more into SPACs. Kensington is set to merge with QuantumScape.

Cramer also mentioned Canoo, which is going public with Hennessey Capital Acquisition Corp IV (NASDAQ:HCAC); Lordstown Motors, going public with DiamondPeak Holdings Corp (NASDAQ:DPHC); Luminar, going public with Gores Metropoulos (NASDAQ:GMHI); XL Fleet, going public with Pivotal Investment Corp II (NYSE:PIC); and ChargePoint, going public with Switchback Energy Acquisition Corp (NYSE:SBE).

Cramer On EVs: Many of the SPACs are following the same playbook and investing in electric vehicle startups, Cramer said. 

He warned investors to be careful with the large number of electric vehicle companies going public. 

“I think fossil fuels are on the way out,” he said. 

He referred to telling investors to buy Tesla (NASDAQ:TSLA) last year prior to a run up of more than 600% in the stock.

Related Link: Jim Cramer Vs. Chamath Palihapitiya: The SPAC War Hits Twitter

Cramer on Fisker: Several weeks ago, Cramer spoke negatively on Fisker, a company set to merge with SPAC Spartan Energy Acquisition Corp (NYSE:SPAQ).

Cramer compared Fisker and its CEO to Nikola and its former executive chairman Trevor Milton.

Cramer called Fisker a “brilliant designer” and said he has “created some gorgeous cars.”

On Wednesday’s announced deal between Fisker and Magna International (NYSE:MGA), Cramer said: "that’s a company we like very much."

Fisker is making all the right moves with the Magna partnership and adding ServiceNow Inc (NYSE:NOW) CEO Bill McDermott to its board of directors, he said. 

Cramer On Hyliion: The company that was highlighted on Thursday by Cramer was Hyliion Holdings Corp (NYSE:HYLN).

Cramer likes the company's focus on CNG and the fact that they "actually have a product."

Cramer mentioned positives of the company owning its battery technology, having a software angle and already having infrastructure in place.

“Hyliion figured that designing a new truck was a fool’s game.” Cramer said he likes that the company has a better shot at improving existing infrastructure.

Hyliion has over 1,000 pre-orders and believes it will sell over 4,100 units in 2022. The company could also see $344 million in revenue from the sale of 2,500 Hypertruck ERXs. 

A slide Cramer showed said the Hypertruck ERX will have a total cost of $279,776 compared to the current Hyliion improvement of $404,493.

Existing diesel trucks cost $431,850. Future trucks from Nikola and Tesla have expected costs of $637,500 and $438,000, respectively.

Cramer recommended waiting for a pullback to $20 for investors to buy.

Disclosure: The author is long HYLN, SBE.