IPO Corner: The Jet Cars We Were Promised

Cars, the ultimate symbol of freedom and status… an unspoken language that’s about as universal as it gets. We’ve had a love affair with these sleek, alluring machines for over 100 years now. Cars are such a pervasive part of our social narrative, that they are celebrities in their own right. From Al Capone’s stylish, armor-clad emerald 1928 Cadillac and John Gotti’s 1972 Jaguar XKE convertible to Floyd Mayweather’s Koenigsegg CCXR Trevita… we love our celebrity cars.

But it seems that father time has a plan for all, including the iconic car. What will be the future of our favorite machines? All electric, still combustible… or maybe, as crazy as it sounds, a drone? Will the cars of the future perhaps fly, or not exists at all? Will it be that one day, cars will sit in museums and the storehouses of the extremely wealthy, only to be carted out for show or to awe business associates? Let’s have a look around and see what’s going on in the car world.

Back To The Future

Just like everything else bizarre about the year 2022, it’s possible that Back to the Future was right… although, off by a few years. And by that, of course we mean the flying car. The urban air mobility market, that’s what it’s called. Yes, it’s a thing. And it may be part of how we shape the future of auto travel. Much like many people have a dirt bike, golf cart, or ATV to traverse their property or neighborhood, we could soon own small, flying vehicles for similar purposes.

Companies operating within the air mobility space are building and testing flying cars to answer just the kinds of questions we’re asking, and to help evolve human transport. Volkswagen has recently launched a working automated flying car prototype VMO (nicknamed the Flying Tiger), which they describe as a “state-of-the-art passenger drone prototype”. The project was the product of a venture between Volkswagen China and British design consultancy Tangerine.

The Flying Tiger looks exactly as you’d expect… like something out of Tony Stark’s lair. Sleek design, all black and gold curves and angles, polished glass, with eight smaller rotors fixed upward for vertical takeoff, and two flamboyant rear propellors for horizontal flight. If all goes according to plan, the vehicle will be able to travel up to 124 miles per hour with a max flight duration of 60 minutes on a single charge. According to leadership innovating in this space, flying cars could be the norm in cities by 2030.

No License Required

If the idea of flying cars brings up more questions for you, us too… we may need to rethink the rules around operating cars in general. The makers of the Flying Tiger happen to think we’re moving toward a world where vehicles are smaller, lighter, and easier to use… not only that, but in this future world, you probably won’t even need a license to drive. And they aren’t the only ones with this thought process… Tesla is on board as well.

Could it be that the future really is in flight with no licenses? Before you scoff, let us tell you about Tesla’s Jetson One, a flying vehicle designed for a single passenger. With a max speed of 63 mph and a flight time of 20 minutes per charge, this little flyer packs a punch. And, because it’s classified as an ultralight aircraft, it requires no license to operate. Capable of reaching an altitude of 1,500 feet above ground and support a 210-pound pilot, these individual little fliers have the potential to cut commute times up to 88%… that’s a lot.

Deals To Watch

But what of today’s market? Turns out, right now, forecasting is rocky, as the car market is currently working through serious issues such as chip shortages, inflation, and a cooling used car market. We do see the new car market stabilizing after five consecutive months of decline as well as a modest increase in new car registrations of 1.2% last month as compared to August 2021. Overall, we can expect to see global car sales continue to grow, but at a slower rate over time as compared to the last few years.

And now, let’s turn to this week’s highlighted companies looking to IPO: Volkswagen’s Porsche and Turo. Volkswagen has announced plans to list a minority stake of fan favorite German luxury sports car company Porsche on the Frankfurt Stock Exchange in what might be one of the largest in German history, with the brand valued at over $60 billion. Despite some disappointing numbers for some car companies this year, Porsche execs are feeling pretty confident… sure that Porsche is bullet proof and steadfast against the blowing winds of inflation and supply chain disruptions.

The company is planning the listing for next quarter, with proceeds going toward financing the brand’s transition to electric vehicles. It is these plans that we think have the behemoth so confident, as projects are in the works toward this end, such as their future battery hub at Salzgitter slated to begin production in 2025. Porsche has managed to pull investors such as Qatar Investment Authority and T Rowe Price Group for the listing. And… there’s a surprise bonus they’ve thrown into the news mix, with sources reporting the company’s battery production arm is looking at a potential IPO listing by next year.

Turo is a little different… they don’t manufacture cars, they make cars available to anyone at the click of a button. Turo is a peer-to-peer car-sharing marketplace, but not just any car-sharing marketplace, it’s the largest in the world. Founded in 2010, Turo’s vision is to put the world’s 1.5 billion cars to better use through sharing. Turo saw the opportunity to expand sharing to the car space and they’ve done so beautifully. Want to rent out your car for cash? Just list it on the platform, input availability and vehicle demographics, and it’s ready to be booked by clients.

The platform is packed with cool features, like filtering by price, location, car type, and other categories. With over 85,000 active hosts, 160,000 active vehicle listings in over 7,500 cities, and over 1,300 makes and models of cars for its 1.3 million active guests to choose from… it’s like an adult candy store, but full of cars. While Turo has not announced an official listing date, it should be forthcoming, and the IPO is expected to raise about $300 million. The offering is being led by JP Morgan and Morgan Stanley.

It seems we have many possible directions available when it comes to the future of cars… we wonder what will win out. Maybe, one day, we’ll take a personal drone to the office in reimagined cities. Perhaps we’ll all be using flying public transport… or, maybe, most people will take an electric bus and only rent cars for special occasions. We can easily imagine a scenario where the nostalgia of a car is part of the vacationing experience. Either way, we’ll be rooting out companies for my Buy List, and bringing you the lasts in the IPO space. See you next week!