The electrification of transportation has now become one of the major trends of the 21st century. The growing demand for electric vehicles (EVs) is building up investor excitement around the industry. As governments across the world are committed to lowering carbon dioxide emissions, new incentives are being offered to convince people to switch to buying environment-friendly battery-powered electric vehicles amid rising concerns of climate change.
Although the outbreak of coronavirus lowered the purchases of EVs, its demand is expected to soar again. The arrival of improved and cost-effective batteries, more readily available charging infrastructure, changing consumer attitude, and price parity with internal-combustion engine vehicles should lead to a rapid increase in purchases.
Nio Limited (NIO)
NIO is a designer, manufacturer, and seller of electric vehicles offering five, six and seven-seater electric SUVs worldwide. The company also manufactures e-powertrains, battery packs, and various other components. It also offers charging solutions and battery swapping services.
NIO recently launched an innovative ‘Battery-as-a-Service’ subscription model that allows users to purchase electric vehicles and subscribe to the usage of battery packs separately. This upgraded solution will help NIO’s vehicles stand out in the market.
On September 3rd, NIO announced the completion of an offering of 101.78 million American depositary shares. The company raised $1.30 billion from the offering and intends to use its net proceeds to repurchase equity interests and fund overall development expenses.
NIO’s revenue increased 146.4% year-over-year to $666.60 million in the third quarter that ended September 2020. Gross profit rose 87.1% sequentially to $86.30 million, while gross margin increased 452 basis points sequentially to 12.9% in the third quarter.
The consensus EPS estimate for the current quarter ending December 2020 indicates a 64.1% improvement from the year-ago value. Moreover, NIO has an impressive earnings surprise history, with the company beating consensus EPS estimates in three out of the trailing four quarters. The consensus revenue estimate of $962.50 million for the current quarter indicates 136.5% growth from the same period last year. The stock has gained 1,125.1% so far year-to-date.
How does NIO stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
B for Overall POWR Rating.
The stock is also ranked #3 out of 115 stocks in the China industry.
Electrameccanica Vehicles Corp. (SOLO)
SOLO designs and manufactures electric vehicles in two segments — Electric Vehicles and Custom Build Vehicles. The company’s flagship product is a purpose-built, single-seat three wheeled Electric Vehicle called the SOLO, designed for urban commuters.
On October 29th, SOLO announced that it will expand its retail footprint by opening six new retail locations across the western U.S. within the next month. It also announced that the initial shipment of its production vehicles for its flagship SOLO electric vehicles have arrived in the United States. This will allow the company to commercially roll out its vehicles in the US markets soon.
SOLO’s revenue increased 63.6% year-over-year to $0.25 million in the third quarter that ended September 2020. Cash and cash equivalents increased 522.8% from the year-ago quarter to $77.3 million in the third quarter.
The consensus EPS estimate for the current year indicates an 18.3% improvement year-over- year. Moreover, SOLO has an impressive earnings surprise history, with the company beating consensus EPS estimates in three out of trailing four quarters. The consensus revenue estimate of $570,000 indicates a 4.3% increase from the same period last year. The stock has gained 402.8% so far year-to-date.
SOLO’s promising outlook is reflected in its POWR Ratings. It is rated a “Buy” with an “A” for Trade Grade and Industry Rank. It is ranked #23 out of 33 stocks in the Auto & Vehicles Manufacturers industry.
Arcimoto, Inc. (FUV)
FUV designs, manufactures and sells three-wheeled electric vehicles. The company offers a fun utility electric vehicle service and a rapid responder for specialized emergency services. It is currently working on a three-wheeled EV “deliverator” for the delivery of goods.
On November 20th, FUV announced the sale of approximately 1.13 million shares of its common stock. The company expects to raise approximately $15 million as gross proceeds from the offering and intends to use the net proceeds for general corporate purposes, and aid in its production process.
FUV recently announced the launch of a municipal fleet pilot program with the City of Orlando to test FUV’s vehicles across city departments. The company has also partnered with DHL Global Forwarding to deliver Arcimoto FUVs from the factory floor to customer homes across the country. This will strengthen the supply chain of the company domestically.
FUV’s total revenue increased 1,953.1% year-over-year to $683,895 in the third quarter that ended September 2020. The company’s production vehicles increased 138.6% from the year-ago value to 136 vehicles in the third quarter. EPS improved 31.8% from the same period last year.
The consensus EPS estimate for the current quarter ending December 2020 indicates a 40% improvement from the year-ago value. The consensus revenue estimate of $1.57 million for the current quarter indicates 66.3% growth from the same period last year. The stock has gained 956.5% year-to-date.
FUV’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade and Industry Rank and a “B” for Peer Grade. It is ranked #24 out of 33 stocks in the Auto & Vehicles Manufacturers industry.
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NIO shares were trading at $54.89 per share on Monday afternoon, up $5.64 (+11.45%). Year-to-date, NIO has gained 1,265.42%, versus a 12.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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