Gogoro CEO Horace Luke joins Yahoo Finance Live to discuss the EV startup’s public support through SPAC and the outlook for electric mobility.
Video transcript
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BRIAN CHUNG: Welcome to Yahoo Finance. Our story here charges the NASDAQ – electric scooter startup Gogoro made its public debut via a special purpose acquisition company, or SPAC, for recall. Yesterday’s shares are up 4 and 1/2% today. The Foxconn-backed company is looking to change the electric vehicle space, with its battery-swap ecosystem, with its GoStations on track to overtake gas stations in Taiwan by the end of this year.
Horace Luke, Founder, Chairman and CEO of Gogoro, now joins us with more. Horace, it’s great to have you on the program. Give us a little insight into what exactly your business does and how you hope the capital raised will help you scale further.
LUKE HORACE: Thanks Brian. Basically, what Gogoro does today is that we are not only an electric vehicle solutions company, but also an infrastructure company. Instead of buying a vehicle with a battery, the consumer actually buys a vehicle without a battery, and with that, redeem and go with thousands of stations located across the city, very – as dense as an ATM. And instead of waiting to recharge, say, half an hour to an hour, what we provide is a full energy exchange.
AKIKO FUJITA: Yes, it is a fascinating model.
LUKE HORACE: It is [AUDIO OUT] our foundation [AUDIO OUT]. Yeah. And the idea is really to take battery costs out of the buying equation, but rather make it a sticky subscription business model with the consumer and allow the consumer to have a great user experience so that he lives in a city to swap and leave in seconds. And we, over the past six years, have truly demonstrated a leading position in Taiwan. When we started in Taiwan, less than 1% of vehicles were electric.
Today, we can probably say that within the cities, we are almost 20% in Taipei. And as part of this, 97 of all electric vehicles are powered by our exchange network. So not only is the game changer in the equation of going electric, but at the same time we are now the de facto standard, working with partners like Yamaha, Suzuki Taiwan, Aeon, PGO and others.
AKIKO FUJITA: And Horace, you have big backers, including Foxconn, as well as Temasek. It’s a fascinating model that has certainly proven itself in Taiwan. I am also thinking of emerging markets, such as Indonesia or India. Why go public in the United States
LUKE HORACE: Well, number one, it’s where the big boys play, where big tech brands raise money, raise capital, and attract millions of investors. Now I come from about 20 years in tech, where I was one of the original founders of Xbox, back at Microsoft, creative director of Windows XP. I’ve really seen how technology has changed the way people become more productive, more efficient.
But as I look to the future in the next two decades, like what you were talking about a second ago, is technology really the– when it comes to the relevance of technology for life of the next generation, are we talking about computing? Are we talking about connectivity and entertainment? Or are we talking about sustainability? And I really think going through the next topic that I want to get into, I really thought sustainability was going to be a huge challenge, especially with the East.
Most people don’t realize that more than 50% of all the miles traveled in the city each day are done on two wheels. If you look at India, China, Indonesia alone, there are over 500 million two-wheelers wandering around every day. They have no solution. What we want to do is provide a solution that empowers not only ourselves, but also our partners.
So think of us as the Android of EVs, where our battery swap solution has proven so successful that we are now working with India’s number one automaker, Hero MotoCorp. We are working with China’s leading electric vehicle manufacturer, Yadea. We work with Chang’an, the leading manufacturer of gasoline vehicles in China, as well as with GoTo and Gojek in Indonesia, which you mentioned a moment ago. So attracting a lot of big players to come on board, to work with us, to really transform what urban mobility is going to be in the future.
BRIAN CHUNG: Yes, my mother is Taiwanese. I mean, there are way more scooters and bikes in Taipei than cars. I wanted to ask, why did you decide to go the SPAC route? We know that Capital Markets and SPACs weren’t as popular in 2022 as they were in 2021. Why did you decide to go this route?
LUKE HORACE: The experience was great. Brian, I was just talking about the fact that in 30 seconds I had to deliver what my business plan was. It’s really difficult, because what we do is very comprehensive, from the engine to the vehicle, to the battery, to the exchange station and to the artificial intelligence engine, to the partnership and the business model that we are introducing. in these markets. It took time to really explain and really take time to partner with someone who understood the capital market, represented us well and engaged with top tier investors.
Now, I’m happy to say that our partner was Poema Global. And with the team behind it, with Principal Capital, we were able to raise $335 million. We were aiming for a PIPE of about $175 million. We are therefore easily oversubscribed by 70% on our PIPE. That said, it was a great experience for us. And I’m really looking forward to using this platform and using these resources to now go global and expand into other markets and really realize that partnerships that we’re aiming to do.
AKIKO FUJITA: Yes, so let’s talk about some of these other markets. I mean, where do you see the greatest potential for growth right now? And beyond that, we’re talking two-wheelers today, but do you see the similar model working for four-wheelers and electric vehicles in general?
LUKE HORACE: Absolutely. The market is gigantic. If you just look at the two-wheeler market, Taiwan is… Brian said he was from Taiwan. Even though it is densely populated with scooters, annual scooter sales [AUDIO OUT]. But if you look at the countries we just mentioned — China, India, Indonesia — combined, those markets represent over 60 million vehicles a year. A great opportunity to multiply by 100 what our technology can offer today.
And second, our EV partner recently shipped three-wheelers with a two-battery setup, as well as a heavier one that has four batteries in the trunk. Now, that said, we also recently announced a partnership with ProLogium to demonstrate the world’s first solid-state battery, increasing capacity by approximately 40%. And with that denser energy, with more power in a smaller package, we’re then able to explore alternative form factors, such as micro four-wheelers or three-wheelers with a canopy, that allow urban mobility to take it to the next level.
Now, of course, it’s a little further. We are still looking aggressively at this two-wheel market. In China alone, there are 375 million two-wheelers waiting to retire and upgrade to a better platform, like the Gogoro platform. And working with someone like Yadea, who have a big presence there – they’re aiming to sell around 15-16 million vehicles this year – and using our platform to push their business model from a simple box move to now a subscription-based Gogoro-based business model, this can be a great opportunity for us to do good and do good at the same time.
BRIAN CHUNG: Oh man, all this talk about Taiwan makes me crave a bowl of niu rou mian. But Horace Luke, Founder, Chairman and CEO of Gogoro, thank you again for dropping by Yahoo Finance this morning, evening for you. Thanks again for taking the time. Congratulations again.
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