Looking for EV stocks? Read This
Electric vehicle (EV) stocks were some of the hottest tickers in 2020. And the sudden enthusiasm came as quite a surprise. Who would have thought that in a year when numerous sectors—including the automotive industry—were impacted by the COVID-19 pandemic, we would see EV stocks shoot through the roof?
Of course, as I’ve said many times here at Profit Confidential, chasing parabolic runs can be very dangerous. Unsurprisingly, after briefly shooting to the moon, many EV stocks have come back to Earth. While that means they aren’t as hot as before, it could represent an opportunity for investors who’ve been standing on the sidelines.
There are quite a few EV stocks to choose from, and I wouldn’t be surprised if more initial public offerings (IPOs) by EV manufacturers are on the way. But today, I’d like to talk about an EV stock that has been around for a while but few have heard of: ElectraMeccanica Vehicles Corp (NASDAQ:SOLO).
Headquartered in Vancouver, BC, ElectraMeccanica is a Canadian EV designer and manufacturer. The company’s shares have been trading on the Nasdaq under the ticker “SOLO” since August 2018.
As I said, there’s no shortage of EV companies in this day and age. What makes ElectraMeccanica stock particularly worth noting is the company’s flagship model, a purpose-built, single-seat electric vehicle called “SOLO.”
If you’ve been following the automotive industry, you’ll know that cars have been getting bigger and bigger over the years. For instance, BMW’s current “5 Series” cars are as big as its “7 Series” cars from the 1990s. And even midsize SUVs—from many different manufacturers—have been fitting a (very uncomfortable) third row in the back in order to offer seven seats.
So what ElectraMeccanica has been doing is the opposite of the auto industry’s trend. And it has a very good reason for doing so. In North America, 119 million people commute using personal vehicles. Of those people, 105 million commute alone. A single-seater could find an audience among those commuters. (Source: “SOLO, Your +1,” ElectraMeccanica Vehicles Corp, last accessed June 23, 2021.)
As you’d expect, the SOLO is substantially smaller than a regular sedan or even coupe: it runs just 122 inches in length, 61.5 inches in width, and 53 inches in height. Moreover, it only has three wheels. (Source: “Investor Presentation: April 2021,” ElectraMeccanica Vehicles Corp, last accessed June 23, 2021.)
As a result, the SOLO is easy to maneuver through traffic and find parking spots. Plus, this single-seater gives its driver access to high-occupancy vehicle (HOV) lanes.
With a manufacturer’s suggested retail price (MSRP) of $18,500, the SOLO is considerably cheaper than pretty much all the EV competition in North America.
Despite its low price, the SOLO offers plenty of standard features, such as electric power steering, power disc brakes, power windows, power heated mirrors, a rearview camera, remote keyless entry, air conditioning, and even five cubic feet of trunk space.
Furthermore, it takes just 2.5 hours to charge the SOLO’s battery from 15% to 90%. The three-wheeled single-seater has a range of 100 miles and can reach a top speed of 80 miles per hour.
ElectraMeccanica Vehicles Corp has adopted an asset-light contract manufacturing model with its strategic partner Zongshen Industrial Group Co., Ltd. in Chongqing, China. At the same time, the company has been building its U.S. Assembly and Engineering Technical Center in Mesa, AZ.
ElectraMeccanica is still in the early stage of production and hasn’t put out any exciting numbers. But based on its plan to produce up to 20,000 vehicles per year, there’s something to look forward to.
In fact, even though SOLO stock isn’t a big ticker, it already rallied toward the end of last year, reaching $13.60 on November 20. But as I said earlier, EV stocks have come back to Earth this year. ElectraMeccanica stock is, as of this writing, trading at $4.27 apiece.
Chart courtesy of StockCharts.com
Ultimately, what we’re looking at with SOLO stock is the very early stage of a growth story. As we’ve seen plenty of times before, not all growth stories work out, so there’s certainly a level of risk associated with investing in young EV companies.
That said, ElectraMeccanica Vehicles Corp’s product offers an interesting proposition in today’s EV market. And with its share price not shooting through the roof, I’d say ElectraMeccanica stock deserves a spot on every EV investor’s watch list.