ElectraMeccanica Vehicles Corp. (NASDAQ:
SOLO) ("ElectraMeccanica" or the "Company"), a designer
and manufacturer of electric vehicles, reported financial results
for the first quarter ended March 31, 2020.
Recent Company Highlights
- Finalized feature set of the production intent, single-seat
SOLO EV, including a liquid-cooled motor that
incorporates torque-limiting stability control, a wider front
steering geometry, a more robust and rugged look, electronic power
steering, power brakes, side-impact occupant protection and various
driver experience upgrades.
- Made continued progress toward production launch of the
Company’s flagship SOLO EV, with a planned
strategic debut in the Los Angeles market in the coming months
followed by rollouts in other west coast cities later in 2020.
- After engaging BDO USA’s Site Selection & Business
Incentives Practice to lead a search for an assembly facility and
engineering technical center in the U.S., the Company identified
seven states as finalists and has sent initial requests for
proposals to the chief economic development entities in each of
Arizona, Colorado, Florida, North Carolina, South Carolina,
Tennessee and Texas. The leading location and backup sites are
expected to be announced in the fourth quarter of 2020.
- Unveiled new cost-effective aluminum chassis for the
SOLO, developed in conjunction with a tier-one
global engineering partner. The new chassis will replace the legacy
composite chassis and reduce the overall weight and per-unit
assembly cost of the vehicle.
- Expanded agreement with Unibail-Rodamco-Westfield, the
developer and operator of premier, worldwide Westfield retail
destinations, for additional storefront locations at leading
shopping centers nationwide in advance of the launch of the
SOLO EV.
- Began development of new SOLO mobile app,
available for both iOS and Android, which will provide owners with
a connected vehicle experience, including various remote vehicle
monitoring capabilities.
- In December 2019, a strain of novel coronavirus (now commonly
known as COVID-19) was reported to have surfaced in Wuhan,
China. COVID-19 has since spread rapidly throughout many
countries, and, on March 12, 2020, the World Health Organization
declared COVID-19 to be a pandemic. In an effort to contain and
mitigate the spread of COVID-19, many countries, including the
United States, Canada and China, have imposed unprecedented
restrictions on travel, and there have been business closures and a
substantial reduction in economic activity in countries that have
had significant outbreaks of COVID-19. Although our manufacturing
partner, Zongshen, reports that its operations have not been
materially affected at this point, significant uncertainty remains
as to the potential impact of the COVID-19 pandemic on our and
Zongshen’s operations (including, without limitation, staffing
levels), supply chains for parts and sales channels for our
products, and on the global economy as a whole. It is
currently not possible to predict how long the pandemic will last
or the time that it will take for economic activity to return to
prior levels. The COVID-19 pandemic has resulted in significant
financial market volatility and uncertainty in recent weeks. A
continuation or worsening of the levels of market disruption and
volatility seen in the recent past could have an adverse effect on
our ability to access capital, on our business, results of
operations and financial condition, and on the market price of our
common shares.
Management Commentary
“At the beginning of the year we made
considerable progress along our production roadmap through several
key vehicle enhancements and approvals that have us on target for
the commercial launch of our flagship SOLO EV in
the next few months,” said Mr. Paul Rivera, Chief Executive Officer
of ElectraMeccanica. “More specifically, in Q1 we finalized our
production-intent vehicle with additional safety, performance and
driver experience features. With the development of a new,
cost-effective aluminum chassis, we will also be able to create a
dual benefit from lower production costs while maintaining superior
structural integrity.
“On the marketing front, we’ve extended our
prior agreement with the operator of the world-renowned Westfield
Shopping Centers and expanded our storefront presence from the
Century City Shopping Mall to a second Los Angeles location at
Westfield Fashion Square, a premier shopping center in the affluent
Sherman Oaks suburb. We look forward to working with Westfield and
other retail shopping centers to increase our storefront presence
and drive greater awareness and interest for our one-of-a-kind
EV.
“Planning ahead, alongside our site selection
and business incentives advisor BDO, we are continuing to evaluate
specific properties and sites within in the states of Arizona,
Colorado, Florida, North Carolina and Tennessee for our proposed
future SKD, or partially prefabricated, assembly facility and
technical center. While the international health crisis and global
economy remain uncertain, our business has been generally
unaffected, and we have operated with minimal interruption. We
remain confident in our ability to meet our production targets
going forward and have the SOLO positioned for a
breakout launch in the second half of the year.”
First Quarter 2020 Financial
Summary
- Revenue in the first quarter of 2020 was CAD$116,813, compared
to CAD$101,404 in the same year-ago quarter.
- Research and development expenses in the first quarter of 2020
were CAD$1.5 million, compared to CAD$1.6 million in the same
year-ago quarter. Research and development costs relate to the
electric vehicle segment as the Company continued to develop its
first electric vehicle, the SOLO.
- Operating loss in the first quarter of 2020 was CAD$6.9
million, compared to an operating loss of CAD$6.3 million in the
same year-ago quarter.
- Net loss in the first quarter of 2020 was CAD$1.9 million,
compared to a net loss of CAD$20.7 million in the same year-ago
quarter.
- Cash, cash equivalents and short-term deposits were CAD$7.5
million as of March 31, 2020, compared to CAD$11.1 million as of
March 31, 2019.
- Cash used in operations during the first quarter of 2020 was
CAD$3.2 million, compared to cash used in operations of CAD$6.7
million in the same year-ago quarter.
Company Chief Financial Officer Ms. Bal Bhullar
added, “In the lead-up to our commercial launch of the
SOLO, we have implemented prudent expense control
measures, as evidenced by the significant year-over-year decline in
cash used in operations. Conservative cash management remains
essential in the current environment and as we look to begin
ramping up production in the second half of the year. Looking
ahead, with key sales and service infrastructure in place, we are
on solid financial footing and have the necessary pieces assembled
to efficiently bring our one-of-a-kind offering to market.”
With an MSRP of $18,500, the
SOLO EV is a trend-setting, all-electric,
single-seat vehicle expected to revolutionize the commuting,
delivery and shared mobility experience. To be one of the first to
own a SOLO, please reserve yours online by
visiting www.electrameccanica.com.
Please click here for the latest webcast of the
Company’s corporate presentation.
About ElectraMeccanica Vehicles
Corp.
ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO)
is a Canadian designer and manufacturer of environmentally
efficient electric vehicles (EVs). The company’s flagship vehicle
is the innovative, purpose-built; single-seat EV called
the SOLO. This three-wheeled vehicle will
revolutionize the urban driving experience, including commuting,
delivery and shared mobility.
The SOLO provides a driving experience
that is unique, trendy, fun, affordable and environmentally
friendly. InterMeccanica, a subsidiary of ElectraMeccanica, has
successfully been building high-end specialty cars for 61 years.
For more information, please
visit www.electrameccanica.com.
Company Contact
Ms. Bal Bhullar, CPA, CGA, CRM Chief Financial
Officer & Director (604) 428-7656 Bal@electrameccanica.com
Investor Relations Contact
Greg FalesnikManaging DirectorMZ Group - MZ
North America(949) 385-6449SOLO@mzgroup.us www.mzgroup.us
Safe Harbor Statement
Except for the statements of historical fact
contained herein, the information presented in this news release
and oral statements made from time to time by representatives of
the Company are or may constitute “forward-looking statements” as
such term is used in applicable United States and Canadian laws and
including, without limitation, within the meaning of the Private
Securities Litigation Reform Act of 1995, for which the Company
claims the protection of the safe harbor for forward-looking
statements. These statements relate to analyses and other
information that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of
management. Any other statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
“expects” or “does not expect”, “is expected”, “anticipates” or
“does not anticipate”, “plans, “estimates” or “intends”, or stating
that certain actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved) are not
statements of historical fact and should be viewed as
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such risks and other factors include,
among others, the availability of capital to fund programs and the
resulting dilution caused by the raising of capital through the
sale of shares, accidents, labor disputes and other risks of the
automotive industry including, without limitation, those associated
with the environment, delays in obtaining governmental approvals,
permits or financing or in the completion of development or
construction activities or claims limitations on insurance
coverage. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate
as actual results and future events could differ materially from
those anticipated in such statements. Although the Company believes
that the expectations reflected in such forward-looking statements
are based upon reasonable assumptions, it can give no assurance
that its expectations will be achieved. Forward-looking information
is subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those projected.
Many of these factors are beyond the Company’s ability to control
or predict. Important factors that may cause actual results to
differ materially and that could impact the Company and the
statements contained in this news release can be found in the
Company’s filings with the Securities and Exchange Commission. The
Company assumes no obligation to update or supplement any
forward-looking statements whether as a result of new information,
future events or otherwise. Accordingly, readers should not place
undue reliance on forward-looking statements contained in this news
release and in any document referred to in this news release. This
news release shall not constitute an offer to sell or the
solicitation of an offer to buy securities.
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