Electrameccanica is an American EV manufacturer that wants to rethink the way consumers view cars. The company believes that the future of urban transportation lies in smaller and more personal vehicles. ElectraMeccanica was founded in 2015 in Vancouver.
The company went public via IPO in August of 2018 and raised $10 million dollars. Earlier this year, the company raised another $20 million from institutional investors. Over the past couple of years, the company has garnered significant investors and racked up billions of dollars of pre-orders. SOLO stock closed nearly 20% up yesterday as the company announced that it has opened up six retail locations in the US and deliveries should commence by year-end.
Kandi (NASDAQ:KNDI) was founded back in 2013 in China with the aim of being one of the largest EV players in the country. The company was formed as a joint venture between Kandi and the Geely Group, which is one of China’s biggest automotive companies. Under the partnership, Geely is responsible for the design and engineering of the vehicles while Kandi takes care of the manufacturing and deliveries. Kandi Technologies is focused on low-end cheap EV’s that cater to a much larger audience than other competitors like Xpeng, NIO, Tesla, and Li Auto.
ElectraMeccanica believes that independent motoring is the future of urban mobility. The company believes that smaller vehicles will be more convenient to drive, park, charge, and overall be a much cheaper and appealing proposition to millennials, especially in heavily congested cities. The company inaugurated its factory in China’s Chongqing in 2019. The company commenced production for its SOLO single-seater vehicle in August. The SOLO has a top speed of 80 mph, a range of 100 miles, and a charge time of just 3 hours. The SOLO starts at just $18500 dollars. The company is also preparing to put its two-seater Tofino model into production soon.
Kandi is a unique proposition among the new crop of Chinese EV manufacturers. Unlike NIO and Xpeng that are in the luxury and comfort segments, Kandi has directly entered into the lower spectrum of the sector. Their cars are by far cheaper than the likes of NIO, Xpeng, and Tesla. Under its partnership with Geely, the company is completely vertically integrated.
The company recently launched its K27 compact hatch, which it claims will cost just $10000 in the US after tax-credits. The company markets itself as the most affordable EV manufacturer in the world. The company also operates the largest car-share program in the world with rates of under $5 dollars an hour. The company recently received US EPA approval for its K27 and K23 models. The company is also finalizing its deal with the Chinese government pure-EV rideshare program that will comprise 300000 vehicles. Kandi has begun its trial and will gradually deliver 1000 EV’s to the city of Haikou and 2500 EV’s to the city Shaoxing.
ElectraMeccanica has more than 23000 pre-orders for its SOLO vehicle and more than 41000 pre-orders for its Tofino two-seater. Although most of these orders are under a refundable deposit, it is a very impressive reception for a new and niche product. Sales should pick up more as the company announced six new retail locations in the US yesterday. The pre-orders correspond to $2B+ in sales. The company reported a net loss of C$12 million in Q2 and cash on hand of $51 million. The company expects deliveries to commence in late-November/early December.
Kandi reported revenues of $18.7 million in Q3 and a net loss of $1.5 million. Gross-margins for Q3 were 20.9%. As of last week, Kandi has working capital of $79 million and cash reserves of $24 million. The company has just started posting profit when the pandemic struck. The company has a P/E of 50, which is a bargain compared to the EV average.
ElectraMeccanica is clearly a risky bet for investors at the moment as it is still on the verge of commencing large-scale deliveries. However, the investors should take into account the almost 18-month delay by the company in commencing deliveries. Going by the performance of EV stocks over the past few months, the stock should be a stellar performer if the company sticks to the schedule and racks up some good revenues.
KNDI stock is still a better investment than SOLO as it has far better infrastructure and more advanced products. Kandi is also operating on a larger canvas as its products cater to lower price bands. The company is also planning to enter the US market next year with its K27 and K23. The company definitely has high potential.