What happened

Shares of special-purpose acquisition company (SPAC) Spartan Energy Acquisition (SPAQ) rose 14.9% in July, according to data provided by S&P Global Market Intelligence. That number, though, doesn't tell the whole story. 

In fact, shares were up more than 50% as of July 9, but they eased back down throughout the month with a particularly sharp 10% drop on the last day of July. Still, the SPAC's shares outperformed the S&P 500's 5.5% July gain.

The outline of a car, made of green leaves.

Image source: Getty Images.

So what

Spartan's shares took off when news broke that it was bidding to take electric vehicle maker Fisker public in a reverse merger, the same type of transaction that brought fuel cell powered truck maker Nikola to market in June. Naturally, investors were pleased when the SPAC actually got the nod from Fisker on July 13.

Fisker has been trying to position itself as the most environmentally friendly among electric vehicle companies, which are all greener than their traditional gasoline-fueled counterparts. To that end, it has introduced "the world's most sustainable vehicle," the Fisker Ocean. It's a luxury electric SUV with an "all-vegan" (read: no leather) interior and components made from recycled materials like abandoned fishing nets and plastics rescued from the ocean. 

On July 31, Fisker announced it had taken 7,062 reservations for the Ocean, more than the 5,000 it had been projecting by the end of the month. But that news was overshadowed by a pair of ominous developments.

On July 29, Spartan put out a news release announcing it would not be able to take Fisker public by Aug. 14, as originally planned, and was filing for a six-month extension. The transaction is now expected to take place in December. Then, on July 31, in an SEC filing, Fisker revealed that its partnership with an existing auto manufacturer to produce the Ocean -- which the market had thought was a done deal -- wasn't completed yet, and that talks aren't set to continue until September. 

Worried that this could throw a wrench into Fisker's production plans for the Ocean, investors sold off Spartan shares. 

Now what

Spartan's stock has moved only slightly upward since the sell-off at the end of July, and is now up about 23% year to date. Still, with the Fisker Ocean not projected to begin production until 2022, there's plenty of time for things to go wrong. 

However, the concept of a sustainable electric SUV is likely to attract even more interest from both investors and buyers, so although all electric vehicle companies -- and there are a lot of them, all of a sudden! -- are risky and volatile right now, investors may want to keep Spartan on their radar.