Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Electric-Vehicle Maker Canoo Jumped This Morning

By Howard Smith - Updated Feb 4, 2021 at 10:13AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Reports of a possible upcoming Apple electric car could have major impacts for this company.

What happened

Shares of Canoo Holdings (GOEV 5.71%), a maker of special-purpose electric vehicles (EVs), rose Thursday morning after a report related to a potential new deal in the EV space. The stock was 8.3% higher as of 9:40 a.m. EST today.

So what

Today's report from CNBC said that a deal is near for an Apple (AAPL 4.08%) autonomous EV involving Hyundai (HYMTF -0.56%) and Kia Motors. The vehicle is to be built at Kia's plant near Atlanta, according to the report. Hyundai owns about one third of Kia.

So what does this have to do with Canoo? The Apple car could be made with Hyundai's EV platform. Canoo and Hyundai announced a partnership last year to develop an EV platform, which would likely use Canoo's proprietary skateboard-platform architecture. 

Canoo skateboard vehicle platform

Canoo's skateboard vehicle platform. Image source: Canoo.

Now what

Canoo plans to use the skateboard platform for its van-like lifestyle vehicle and for a multipurpose delivery vehicle (MPDV), with production beginning in 2022. A potential Hyundai-Kia manufactured Apple EV could benefit Canoo in several ways. Related to its Hyundai agreement, Canoo said in an investor presentation that "Hyundai Motor Group expects the new platform using Canoo's skateboard architecture to allow for a simplified and standardized development process, lowering vehicle price."

Additionally, the company has said it has an opportunity for skateboard licensing revenue, which it has not included in its financial projections. 

Investors should note that no agreement between Apple and Hyundai has officially been announced. But the potential does highlight the relationship between Canoo and the Korean automaker, which could portend future deals as well. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Canoo Holdings Ltd. Stock Quote
Canoo Holdings Ltd.
$3.52 (5.71%) $0.19
Apple Inc. Stock Quote
Apple Inc.
$149.64 (4.08%) $5.86
Hyundai Motor Company Stock Quote
Hyundai Motor Company
$37.30 (-0.56%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.