ElectraMeccanica Vehicles Corp: Small Company With Big Potential
If you’re kicking yourself for missing out on the 2020 stock market crash and recovery, the current pullback presents you with another chance to profit.
And if you’re interested in electric vehicle (EV) stocks that have taken a breather (most have), you might want to pay attention to the small, overlooked ElectraMeccanica Vehicles Corp (NASDAQ:SOLO).
The Burnaby, BC, Canada-based company currently has a market cap of about $208.0 million and just 222 employees. (Source: “ElectraMeccanica Vehicles Corp,” Google Finance, last accessed May 9, 2022.)
So, it’s not really competing with the likes of Tesla Inc (NASDAQ:TSLA) or NIO Inc (NYSE:NIO). Frankly, that’s a good thing. ElectraMeccanica is a niche player that only began selling its EVs in the fourth quarter of 2021.
With SOLO stock, you’re getting in on the ground floor of an EV company with exceptional long-term growth potential. Moreover, because of ElectraMeccanica Vehicles Corp’s small size, the uniqueness of its vehicles, and some recent developments, the company could become a takeover target.
The year 2021 was transformational for ElectraMeccanica Vehicles Corp. It transitioned from a development-stage company to a well-capitalized automotive company.
During the year, it successfully commenced commercial deliveries of its flagship vehicle to retail and fleet customers. The company also expanded its retail presence in strategic markets throughout Arizona, California, Colorado, Oregon, and Washington.
Wall Street analysts aren’t thinking about a potential takeover yet, but they’re on board with what ElectraMeccanica stock has to offer. Their average 12-month price target for shares of ElectraMeccanica Vehicles Corp is $7.50. At the stock’s current price, that points to potential gains of 300%.
For buy-and-hold investors, that’s good news. SOLO stock did well in 2020 (along with most other EV stocks), but since then, it hasn’t been done much except slide lower.
As of this writing, ElectraMeccanica stock is down by:
- 15% over the last month
- 21% year-to-date
- 52% year-over-year
- More than 80% from its November 2020 high
Chart courtesy of StockCharts.com
About SOLO Stock
ElectraMeccanica Vehicles Corp develops and manufactures EVs in Canada. The company’s flagship vehicle is the three-wheeled, single-seat “SOLO.”
The SOLO has a range of 100 miles and a top speed of 80 miles per hour. It’s also one of the most economical EVs, with a manufacturer’s suggested retail price (MSRP) of just $18,500. (Source: “Investor Presentation: April 2022,” ElectraMeccanica Vehicles Corp, last accessed May 9, 2022.)
In the fourth quarter of 2021, the company delivered its first 93 SOLO EVs.
ElectraMeccanica announced in February 2022 that it will begin delivering its “SOLO Cargo” EV to fleet and commercial customers in the second quarter of 2022. The SOLO Cargo EV has an MSRP of $24,500.
The company also has two other cars in development, the “Tofino” and the “eRoadster.”
The Tofino is a sporty two-door convertible with an MSRP of $50,000. It’s not yet available, but the company has been taking pre-orders. (Source: “Tofino,” ElectraMeccanica Vehicles Corp, last accessed May 9, 2022.)
The eRoadster is the company’s top-end vehicle. It’s a two-seat, two-door convertible throwback to the 1950s. Resembling a “Porsche 356,” it looks like something James Bond, James Dean, or Steve McQueen would drive. The company is accepting pre-orders with an estimated MSRP of $150,000. (Source: “eRoadster,” ElectraMeccanica Vehicles Corp, last accessed May 9, 2022.)
To support the company’s anticipated rapid expansion, ElectraMeccanica broke ground on a 235,000-square-foot facility in Mesa, AZ in August 2021. The plant will be the company’s U.S.-based assembly and engineering technical center for the 2023 SOLO.
The facility, which has an initial capacity to produce 20,000 SOLOs per year, is on track to be completed this summer. Once the plant is fully operational, ElectraMeccanica Vehicles Corp will have the ability to produce up to 40,000 SOLOs annually.
2021 Revenue Up 270% Year-Over-Year
On March 22, ElectraMeccanica announced its financial results for the 2021 fourth quarter and full year.
In the fourth quarter, the company generated revenues from the initial commercial production of its SOLO EV, leading to more than $1.5 million in sales. (Source: “ElectraMeccanica Reports Fourth Quarter and Full Year 2021 Financial Results,” ElectraMeccanica Vehicles Corp, March 22, 2022.)
In full-year 2021, its revenue increased by 270% year-over-year from $569,000 to $2.1 million. The company’s net loss in 2021 improved to $41.3 million, compared to a net loss of $63.1 million in 2020.
ElectraMeccanica ended the year with $222.0 million in cash and cash equivalents, which is more than enough to carry the company forward as it scales up its production.
ElectraMeccanica Vehicles Corp is a great niche EV company that’s ramping up its production.
Management expects the company’s sales to increase significantly throughout 2022 as its ramps up production and finishes building its operations in Arizona.
Backed by a solid balance sheet and increasing production, ElectraMeccanica Vehicles Corp is poised to make serious inroads in the EV industry in 2022, which could lead ElectraMeccanica stock to rise in value.