Ideanomics is Empowering the Electric Vehicle-Driven Economy
September 21 2020 - 12:32PM
InvestorsHub NewsWire
Ideanomics (NASDAQ:IDEX) reported Q2
revenue of $4.7 million and expects quarter-over-quarter growth in
Q3 and Q4 2020
SmallCapPower | September 17,
2020: Tesla’s soaring stock price illustrates
investors’ belief that the future of transportation is electric.
But for those who think Elon Musk’s company is overvalued, or they
missed the boat for the appreciation in the stock price over the
past few years, then there are other options for investors who want
to capitalize on the burgeoning EV industry. One company that looks
interesting is Ideanomics (NASDAQ:IDEX).
Ideanomics is not an electric vehicles manufacturer per se,
although it does own a controlling interest in Malaysia-based
Treeletrik. It is involved in commercial electric vehicle
enablement – helping commercial fleet customers understand how to
transition their vehicles, to get through the procurement process,
the rebates process, the lease financing process, etc. Commercial
vehicles include heavy- duty trucks, logistic vehicles, buses,
taxis, etc.
The Company started in China because the county is regulatory
driven, which provides confidence in deriving revenue because of
regulatory deadlines, such as the electrification of all city buses
by 2022.
China currently has an estimated 11 million heavy- duty trucks
and off-road vehicles, 14 million delivery vehicles, 1.6 million
city and tourist buses, 1.2 million taxis/ride-sharing vehicles,
and more than 100,000 gas stations to be converted to charging
stations.
Ideanomics hopes these commercial fleet customers continue to do
business with them, so that IDEX can market these clients
wholesale, pre-paid electricity or discounted access to Ideanomics’
preferred partner charging stations, which should provide a
rewarding recurring revenue stream for the Company.
During a recent media interview, Ideanomics CEO Alf Poor
describes ways in which IDEX makes money. This includes on the
spreads between buying and selling of electric vehicles, in which
the Company receives volume discounts; receiving a
commission/finder’s fee on lease financing deals it places with
leading lending institutions and, most importantly; a recurring
revenue stream from the percentage of electricity sales to keep
these vehicles running.
All that being said, having an influential local business
partner is key to operating successfully in China and Ideanomics
has one in Chinese-American entrepreneur Dr. Bruno Wu, who is also
Chairman of Ideanomics and owns a 19% equity stake in the Company.
Dr. Bruno Wu’s wife, Yang Lan, is a high-profile Chinese
media personality who is often referred to as the Oprah Winfrey of
China.
Ideanomics recently reported Q2 revenue of $4.7 million, up from
$378,000 in Q1, as China’s economy continues to recover
from the COVID-19 lockdown. The Company ended the quarter
with US$36.4 million in cash, which it says could be used for
acquisitions later this year. IDEX called the second quarter
its best mobile energy results since moving into electric vehicle
sales. And Ideanomics expects quarter-over-quarter growth in Q3 and
Q4 2020.
“We are very pleased with the pace of our sales growth in the
new energy vehicle industry,” Ideanomics CEO Alf Poor said in a
statement. “As the rate of global electric vehicle (EV) adoption
continues to rise and technology advancements make EVs more
accessible, our Sales to Financing to Charging (S2F2C) business
model is positioned to add value for commercial fleet operators in
all areas of their business.”
Finally, an important component of IDEX’s future growth should
come from its majority ownership of Treeletrik, an approved
electric vehicles manufacturer and distributor for Malaysia.
Treeletrik expands the Company’s product line to electric vehicle
mopeds, bikes cars, and light rail, serving the 650 million people
in the ASEAN region which includes Malaysia, Cambodia, Vietnam,
Philippines, Indonesia, Laos, Singapore, and Brunei. Treeletrik is
expected to drive ASEAN commercial electric vehicle sales
leveraging Chinese manufacturing advantages.
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