SOLO: 3 Electric Vehicle Stocks Under $10 to Add to Your Watchlist

The red-hot electric vehicle (EV) market is expected to hit new highs in 2021, following a stellar rally over the past year. With President Biden’s staunch support of the electrification of the automobile industry, the U.S. will likely see incentive programs designed to foster the industry’s growth. According to Edmunds.com, Inc., EV sales are expected to account for 2.5% of the overall auto retail sales in 2021, representing a 60 basis point rise year-over-year. Moreover, absolute EV car sales volume is expected to rise 6.5% year-over-year to 15.50 million this year.

However, with such optimistic projections, many new companies are focusing on this industry, and new start-ups are jumping in. This is arguably overcrowding the sector. Futhermore, most EV companies are significantly overpriced now and we think hold limited upside potential.

However, shares of Electrameccanica Vehicles Corp. (SOLO), CBAK Energy Technology, Inc. (CBAT), and AYRO, Inc. (AYRO), which are currently trading at less than $10, have the potential to grow significantly in near future. Thus, we do think these stocks could be good additions to one’s watchlist.

Click here to checkout our Electric Vehicle Industry Report for 2021

Electrameccanica Vehicles Corp. (SOLO)

Based in Vancouver, Canada SOLO is engaged in the automobile and multi-utility vehicle business sector. The company operates mainly through two business segments — Electric Vehicles (EV) and Custom build vehicles. Its EV segment includes the development and manufacture of EVs for mass markets and the custom-built vehicles segment includes the development and manufacture of high-end custom-built vehicles. The company’s products include SOLO, a single-seater EV, and Tofino, a two-seater electric roadster set.

SOLO’s total revenues for the third quarter, ended September 30, 2020, were CAD$327,285, representing a 63.6% rise year-over-year. This can be attributed primarily to the increase in revenue from its custom-built roadsters. The company’s cash and cash equivalents and short-term deposits came were CAD$101.10 million for the quarter versus CAD$11.10 million as of December 31, 2019.

Analysts expect SOLO’s EPS to increase 15.4% for the quarter ended December 31, 2020 and 28.6% in fiscal 2021. A consensus revenue estimate of $13.92 million for its fiscal year 2021 represents a 2861.7% rise year-over-year.

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On March 16, SOLO announced its plans to establish a U.S.-based assembly facility and engineering technical center in Mesa, Arizona, in the greater Phoenix area. The company also announced the expansion of its retail footprint into seven additional locations on the West Coast of the U.S. that are set to be opened in May and June this year. The stock has gained 424.8% over the past year and closed yesterday’s trading session at $5.71.

CBAK Energy Technology, Inc. (CBAT)

Based in China, CBAT manufactures, commercializes, and distributes lithium ion (Li-ion) rechargeable batteries. It manufactures five types of Li-ion rechargeable batteries—aluminum-case cell, battery pack, cylindrical cell, lithium polymer cell, and high-power lithium battery cell. The company’s products are used in various applications, including EVs, light EVs electric tools, energy storage, uninterruptible power supply (UPS), and other high-power applications.

For the third quarter, ended September 30, 2020 CBAT’s net revenue increased 31.3% year-over-year to $10.62 million. Its gross profit also increased 108.7% year-over-year to $1.37 million. Moreover, the company’s operating profit came in at $393,581, compared to an operating loss of $1.50 million during the third quarter of 2019. Its net income was $44,247 compared to a net loss of $1.77 million during the third quarter of 2019.

CBAT signed a memorandum of cooperation with the Hydrogen Energy Company to promote the development of hydrogen fuel cells on March 15. In February, the company announced that it has started trial production of its special 26650 lithium battery, which is specifically designed for application in ultra-low temperature environments. Nanjing CBAK New Energy Technology Co., Ltd., CBAT’s wholly owned subsidiary, signed an agreement to supply battery systems for 10.5m electric buses to Sichuan Guohong Automobile Co., Ltd. CBAT also signed a three-year strategic agreement with Anhui Jianghuai Motors Group Co., Ltd in January to jointly develop new battery cells. The stock has gained 1275.5% over the past year and closed yesterday’s trading session at $5.91.

AYRO, Inc. (AYRO)

Based in Round Rock, Texas AYRO is a designer and manufacturer of light-duty, emissions-free EVs. The company’s EV models include AYRO 311, a three-wheeled vehicle used for professional and personal use, and Club Car 411, an EV suitable for low-speed logistics and cargo services. Its EVs are used on university and corporate campuses, for commercial and urban delivery, and many other applications.

The company’s revenue for the third quarter, ended September 30, 2020, increased 46.4% year-over-year to $388,654. AYRO’s total assets for the quarter were $33.85 million versus $2.78 million as of December 31, 2019. Analysts expect its EPS to increase 40.7% for its year fiscal 2020, ended December 31. A consensus revenue estimate of $27.60 million for its fiscal year 2021 represents a 1763.1% rise year-over-year.

This month, , AYRO entered an agreement with Element Fleet Management, the world’s largest pure-play automotive fleet manager, to support the deployment of large fleets of AYRO’s electric delivery vehicles over the next four years. The company also announced the launch of the Electric Vaccine Vehicle (EVV) on March 8, 2021. It is specifically designed to be a flexible, safe and efficient means of delivering vaccines. AYRO has gained 150.8% over the past nine months and closed yesterday’s trading session at $6.97.

Click here to checkout our Electric Vehicle Industry Report for 2021

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SOLO shares rose $0.01 (+0.19%) in after-hours trading Thursday. Year-to-date, SOLO has declined -13.09%, versus a 4.71% rise in the benchmark S&P 500 index during the same period.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...