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 – Get Rating), CBAK Energy Technology, Inc. (CBAT – Get Rating), and AYRO, Inc. (AYRO – Get Rating), 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.
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.
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.
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…
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