Welcome to another story and another video in my One Company One Story series.
Here comes the amateur legalese.
I began investing in companies and their stocks in the late 70s, but am not a certified investment professional.
My style and history of investing is described in Dream. Invest. Live., a book I wrote by request – which came out as the Great Recession (the Second Great Depression) began. Bad timing, eh?
My personal finance blog (a blog about my finances) is: https://trimbathcreative.net/
I am not investment professional. This is not financial advice.
This time is it about ElectraMeccanica, a company that has the innovative idea of believing that people will buy cars rationally, and if it catches on, fashionably. They’re making and selling a three-wheeled, one-passenger, electric vehicle that fits enough lifestyles and business models that they could be profitable and a trendsetter.
Consider most personal car trips. They’re one person driving less than fifty miles with stop-and-go traffic. People commute. Errands get run. It doesn’t take much. If it doesn’t take much, then don’t use much. Why lug around two tons of car to get yourself to work or to buy some groceries? A bicycle may suffice, but this company is familiar with Vancouver, British Columbia weather. An enclosed car makes life sweeter.
Consider may deliveries. It doesn’t take much to deliver pizzas. Ideally the pizza shop is already close to their customers. Lots of quick roundtrips and easier parking may be a business advantage. Install quicker chargers and skip the gasoline. And then there are other businesses making other quick, short trips. They don’t need tons of vehicles, either.
But, people are not always rational. They may drive alone and may never reach highway speeds, but they’ll buy sedans or SUVs or pickup trucks, all with speedometers that must reach into the triple digits – because that’s the way things have ‘always’ been done.
Check history. ‘Always’ is usually measured in a generation or two. Grandparents may recall times where pragmatism may have suggested a vehicle that carries one and gets the job done.
Check today’s trends. Electric vehicles are now becoming common. Gas prices are encouraging commuters to explore options. The Great Resignation and Work From Home are encouraging breaks from convention. Is this the time?
Check the recent earnings report. OK. Maybe not. ElectraMeccanica is in that uncertain phase between startup mode where everything is projections and hopes, and the mature phase when production lines and orders and customers are established and providing guidance and data on reality. They’re in production, but have few reported sales. Supply chains are in place, but are being interrupted by the pandemic, at least. Their increase is sales is large, but only relative to nearly zero.
“Company Reported $1.44 Million in Q3 ‘22 Revenue, Up Over 12x From the Year Ago Quarter
Contract Manufactured SOLOs for Q3 ‘22 Total 103, Reflecting Temporary “Zero Covid” Slowdown in China, While EMV Maintains Delivery Pace at 64 Vehicles for the Quarter“
This may all explain their stock price.
Looking into their plans includes a new manufacturing plant and some concept cars that may be more for fun than function. Looking into trends includes governments mandating electric vehicles. If the economy continues to have difficulties a $18,000 three-wheeled, one-passenger, electric vehicle might be just the right thing at the right time – or not.
So goes life in the land of startups.
They need a shorter, catchier name. Something that starts with a hard consonant and inspires massive investment dollars. Hmmm.