- Designer and manufacturer of electric vehicles
- All-electric SOLO is a three-wheeled single-passenger car
- Electra Meccanica is expecting SOLO deliveries to begin by the end of 2019
- Also developing the Tofino, a two seater electric roadster sports car
What ElectraMeccanica does:
ElectraMeccanica Vehicles Corp (NASDAQ:SOLO) is a designer and manufacturer of electric vehicles established in 2015. Its subsidiary, Intermeccanica - a custom coach builder founded in Italy - has successfully been building high-end specialty cars for 60 years, including the Roadster, a replica of the 1959 Porsche 356 convertible.
ElectraMeccanica’s goal is to revolutionize the way people commute, aiming to create a fun driving experience that is efficient, cost-effective and environmentally friendly.
The Vancouver-based firm is developing the innovative, all-electric SOLO, a single passenger vehicle, as well as the Tofino, a high-performance two seater electric roadster sports car.
The SOLO is a three-wheeled single-passenger car that boasts a top range of 100 miles and speeds of 82 miles per hour on a 17.3-kilowatt hour battery pack and sells for $16,250 – around half the price of a Tesla.
The vehicle was included in a recent Forbes list of the “coolest new cars” for 2020, amongst names like Aston Martin, Cadillac and Tesla.
In 2018, the company produced over 40 SOLO vehicles at its first manufacturing facility in Vancouver, BC and delivered them to customers in the United States and Canada. These vehicles were delivered to paying customers and potential customers in efforts to conduct pilot tests for commercial use, as well as for use in Global Compliance testing, such as crash tests.
In October 2017, Electra Meccanica signed a manufacturing agreement with Zongshen, China’s largest manufacturer of motorcycles and motorcycle engines, which reduces the Canadian firm’s risk and the need for capex. Zongshen owns 10.6% of Electra Meccanica common stock.
The Chinese manufacturer has already constructed the SOLO manufacturing line and is contracted to produce 75,000 vehicles over a three-year period.
Electra Meccanica is expecting to begin SOLO deliveries by the end of 2019.
How is it doing:
A busy second quarter of 2019 saw the company reach a number of key milestones in its path to commercial vehicle production.
Highlights of the three-month period ending June 30, 2019 included conducting internal quality assurance and safety tests on the first 47 pre-production SOLO, testing items such as calibration, stability, and brake systems.
Other achievements included the granting of a patent in China for its proprietary battery cartridge design, a new multi-year collaboration with Colorado-based Apollo Brands, and the first SOLO owner to drive over 20,000 kilometres.
On the management front, the group unveiled the appointment of seasoned automotive executive Paul Rivera to the CEO role on 20 June.
Rivera has over 25 years of experience in the automotive sector to the company, most recently serving as president of Ricardo USA, the American division of the 100-year old global engineering and consulting firm.
On August 20, the company also revealed the appointment of David Neace as its director of sales.
Neace has over 20 years of expertise in sales management, with his most recent role as senior program manager at Tesla Inc (NASDAQ:TSLA), where he was key in creating the electric vehicle maker’s employee-delivery and factory-direct programs.
At the end of July, ElectraMeccanica also announced it is working with jmpr, a leading US-based PR agency with extensive experience in automotive branding campaigns.
In the business for over 40 years, jmpr has worked with leading names in the car business such as INFINITI, Airstream and Galpin Motors.
Electra Meccanica will use jmpr’s services for event planning and media relations, as well as implementing a new digital marketing and brand building campaign.
On the finances side, Electra Meccanica reported total 2Q revenue of C$0.2 million, compared to C$0.3 million in the year-ago quarter, a decline attributable to the decrease in the number of custom-built e-roadsters that were produced.
It’s operating loss for the three months ended June 30, 2019 was CAD$4.9 million, compared to an operating loss of CAD$4.6 million in the same quarter a year earlier.
The company ended the quarter with C$21.4 million in cash.
- Initiation of volume production at Zongshen
- Potential distribution partnerships
- Opening of additional retail dealership locations
What the boss says:
In a statement with the group’s 2Q results, Bal Bhullar, ElectraMeccanica’s CFO said: “With the SOLO EV certified for sale in 37 states throughout the US, we are well positioned to revolutionize the way people commute by creating an affordable, fun and eco-friendly alternative to the daily commuter experience.”
What the broker says:
Roth Capital Partners set a price target of US$7.50 on ElectraMeccanica shares after the 2Q financials came in ahead of its analyst’s estimates.
The research firm noted that initiating production at the firm’s Zongshen, China manufacturing facility would be a key catalyst for the company going forward.
“We do not view quarterly financial results as particularly meaningful at this pre-ramp stage and would view initiation of volume production at Zongshen as a more significant catalyst,” analyst Craig Irwin wrote in a note.
Other catalysts that Roth expects to drive the share price include updates to pre-order numbers, potential distribution partnerships and the opening of additional retail dealership locations.
ElectraMeccanica shares trade at around US$2.34, giving the Nasdaq-listed firm a market cap of around $89 million.
The company raised $10 million in August 2018 via a public offering of 2.353 million units consisting of one common shares at $4.25 per share and two warrants, exercisable at $4.25 per unit.