Obscure Tesla Competitor Electrameccanica Jumped 24 Percent


When people refer to Tesla’s competition, they usually mean the major automakers like Volkswagen, BMW, and others that are working on developing their own electric vehicles.

However, few would be familiar with a small, Vancouver-based company that, despite its small market cap almost 50 times smaller than Tesla, is one of the few competitors focused specifically on electric vehicles. Electrameccanica (NASDAQ: SOLO) saw its saws jump up around 25 percent as one of the biggest gainers in the market. This was due to positive coverage from one major analyst, giving the company some much needed publicity.

Benchmark Research analyst Bill Sutherland began covering the stock and issued a “speculative buy” rating for the tiny automaker, which currently has a market cap of around $100 million – in comparison to the $46 billion or so that Tesla has). Sutherland put his target price on the company stock at around $6 per share, almost double yesterdays close of $3.42.

The signature product of the company is the SOLO, a one-person, three-wheeled, fully enclosed electric vehicle that has significant potential since according to the analyst, around 83 percent of all cars on the highway only have one occupant. As a much smaller vehicle, it would save considerably on both gas as well have an easier time finding parking spaces, something that would be quite desirable for consumers. What’s even better, however, is that the company is planning to offer their new vehicle at a price point of around $15,000.

“This company is producing the car that Elon Musk wishes he were building,” ElectraMeccanica Chief Executive Officer Jerry Kroll said in an interview according to Bloomberg. “It is great to produce a $45,000, a $100,000 car or a $250,000 car. But for the masses? A $15,000 car that can get them to stop using gas. That’s creative.”

At the same time, a new report issued Wednesday by Barclay’s Sustainable & Thematic Investing team went on to expound on the concept of micromobility, referring to electric vehicles that weight less than 1,100 pounds. They describe this possible phenomenon in the future as an “iPhone moment in urban personal and commercial transportation,” arguing that companies like Electrameccanica could profit from a potential $800 billion market in the next few years.

Currently, the company has around 64,000 pre-orders, which alone could bring in around $2 billion in revenue. Sutherland estimates corporate profits would grow to $7.5 million in 2019 before exploding to $157.2 million in 2021.

In contrast, Tesla Inc (NASDAQ: TSLA) has been struggling, having recently announced a $35,000 Model S alongside a new “Founders Series” semi-truck that can be reserved for $200,000 per vehicle.

Electrameccanica Company Profile

Electrameccanica Vehicles Corp Ltd is an electronic vehicle company. It is engaged in manufacturing and selling of electronic vehicle. It operates in two segments, Electric Vehicles, and Custom Build Vehicles. The company also develops and manufactures high-end custom-built vehicles. The Electric Vehicles segment deals with development and manufacture of electric vehicles for mass markets. The Custom Build Vehicles which accounts for the majority of revenue engages in the development and manufacture of high-end custom-built vehicles. – Warrior Trading News