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Indi EV Aims to Go Public via SPAC

Indi EV touts its “born in LA roots” to prospective investors and consumers, but if the early-stage electric vehicle company is successful in making a trip to Wall Street and the public markets, it will do so as an Orange County-based firm.

The 6-year-old company, which moved from LA into a new headquarters in Costa Mesa in December, is making plans to go public via a reverse merger with Malacca Straits Acquisition Company Ltd. (Nasdaq: MLAC), a special purpose acquisition company, or SPAC.

As it preps to go public, Indi has optimistically been valued at $600 million, regulatory filings indicate. The amount of cash the reverse merger would add to its books hasn’t been specified. The company will be listed under “INDI” on the Nasdaq after the completion of its SPAC deal.

Pre-Revenue

A public listing would be a bold move for Indi, which has yet to generate any revenue or launch its first EV: the Indi One crossover.

Other local EV makers like Indi have not fared well on the public markets this year.

As of last week, shares in Irvine-based Rivian Automotive Inc. (Nasdaq: RIVN), OC’s largest EV maker with a $13 billion valuation, were down 65% to about $14 a share from their 52-week high last September.

Mullen Automotive Inc. (Nasdaq: MULN) has seen its stock fall some 44% to 87 cents and a valuation of about $150 million since May 4, when the Brea-based EV maker issued a 1-for-25 reverse stock split to bring its shares over $1 for 10 consecutive days, in compliance with the Nasdaq. Mullen went public via SPAC two years ago at around $12 per share.

The SPAC path is sometimes considered a more expedient way to public trading than a traditional initial public offering, but the stock performance of companies using the SPAC vehicle post-merger has been spotty of late.

The Costa Mesa-based company isn’t related to Aliso Viejo’s Indie Semiconductor Inc. (Nasdaq: INDI), whose chips are used for EVs and other cars. The semiconductor company went public in 2021 and is one of the better-performing local users of the SPAC vehicle, with a $1.9 billion valuation as of last week.

Ambitious Interior

Indi EV, though early in its EV journey, is trying to set itself apart from its competitors with an ambitious interior for the Indi One.

The company’s first EV crossover promises to have 5G internet, an automated drive assistance system and, most notably, a “Vehicle Integrated Computer” that enables in-car and car-to-car gaming, filings indicate. Tesla Inc. (Nasdaq: TSLA) last year launched a beta version of a software update that similarly lets passengers play big name titles like action role-playing game “Cyperpunk 2077” in their Model S and Model X.

The Indi One’s in-vehicle computer will also allow passengers to browse the web, video chat, edit documents and watch YouTube and TikTok, the company says.

For content creators and influencers, the Indi One will also feature filming, editing and posting capabilities with its integrated computer and five in-cabin cameras.

The computer, which officials call the Indi One’s “brain and heart,” aims to “break the boundary of people’s living space: to eliminate the gap between the living room/office and the vehicle,” officials said in filings.

The Indi One crossover will be available in two different trims: basic, which is projected to get about 230 miles of range and cost around $45,000, and premium, which will get about 300 miles of range at the price of about $69,000.

Going Concern

Indi has yet to make an EV sale, but officials expect the company will generate revenue next year as it begins commercial production.

Graduating from its pre-revenue phase will be a welcome milestone for Indi, as its operations have been costly.

At the end of September last year, Indi’s loss from operational costs neared $18 million, down 31% from the year prior. The decline in expenses was due to the completion of Indi’s prototype EVs in 2021, when it saw a net loss of $35 million.

Indi’s current accumulated deficit tops $116 million. Funding for the company so far has come from stock sales and investments from Indi’s founder and CEO, Shi Hai.

As of last September, Indi had raised $112 million from stock sales and debt issuance.

The company anticipates to shoulder more operating expenses as Indi builds a sales force, commercializes the Indi One and plans for more EVs.

Auditors, however, have raised doubts about the company’s ability to continue as a going concern, filings indicate.

The company did not respond to requests for comment.

180K-SF Downsize

As Indi accumulated debt, the EV maker downsized its office from over 200,000 square feet in LA to 35,000 square feet in OC.

The company’s old 216,000-square-foot office in Vernon housed its former research and development facility. Indi’s new space in Costa Mesa includes a manufacturing site and offices for administrative and research and development purposes.

The new facility allows Indi to “centralize resources to bring its first model, the Indi One, closer to production,” the company said in a statement.

At the time Indi announced its move, the company also revealed that it closed a $120 million deal with Hito Robotic System, which develops automated manufacturing processes for the auto, steel, semiconductor and biomedical industries.

Hito’s equipment helped Indi build its automated assembly line, as the company gears up for production for the Indi One in 2024.

The company is also getting started with designs for two upcoming vehicles: the Indi Space luxury van and the Indi Two pickup truck.

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