Stifel has initiated coverage of electric vehicle maker ElectraMeccanica Vehicles Corp (NASDAQ:SOLO) with a Buy rating, noting that the Canadian company “has a compelling lead in the high-growth affordable EV market.”
The Vancouver-based firm is now building its SOLO EV, 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 – about half the price of a Tesla.
The EV, which is expected to go on sale in late 2020 in California Arizona, and Oregon, features front and rear crumple zones, side-impact protection, roll bar, torque-limiting control, as well as power steering, power brakes, air conditioning, and a Bluetooth entertainment system.
In a December 16 note to clients, Stifel said ElectraMeccanica is establishing a leadership foothold in the emerging -- and affordable -- EV market.
“We see significant secular growth ahead for the short-range, commuter EV market, which is currently underserved by existing or imminent products.” analysts J Bruce Chan and Roxanna Islam wrote. “The SOLO is a highly-attractive platform for the high-growth e-commerce last mile delivery market, as well as commercial fleet market, and expanding shared mobility market.”
The analysts also pointed to other company strengths such as a strong management team, a less-risky manufacturing strategy versus industry peers, and a “reasonable production and product ramp” strategy.
In addition, Stifel has a $9 price target on the stock -- which based on the analyst's 2023 sales estimate of C$177.5 million for ElectraMeccanica. The company’s stock recently traded around $7.35 a share, well off its 52-week high of $13.60.
Contact the author: [email protected]
Follow him on Twitter @PatrickMGraham