ElectraMeccanica Vehicles Corp. (“ElectraMeccanica” or the “Company”), a designer and manufacturer of electric vehicles, has reported its financial results for the fourth quarter and full year ended December 31, 2019.
Recent Company Highlights:
Unveiled production intent SOLO EV, integrating upgrades that include an advanced liquid-cooled motor incorporating torque-limiting electronic stability control, a wider front steering track, a revised electronic power steering software and additional occupant safety protection. Additional upgrades include a more robust and rugged appearance, a more comfortable seat design, an enhanced entertainment system and display with Bluetooth technology and reduced interior cabin noise.
ElectraMeccanica is currently preparing for a mid-year 2020 launch of its unique SOLO EV, with a strategic launch in the Los Angeles market first, followed by other west coast cities later in the year.
Engaged BDO to lead search for a U.S. assembly facility and state-of-the-art engineering technical center, with the goal of assembling knock-down kits for SOLO EVs to be sold in the U.S. market, thereby reducing uncertainties in the global supply chain, increasing logistical efficiencies and eliminating tariffs.
BDO has identified seven states as finalists and sent initial request for proposals to the chief economic development entities in Arizona, Colorado, Florida, North Carolina, South Carolina, Tennessee and Texas. The leading location and backup sites are expected to be announced in the third quarter of 2020.
Established EMV Automotive Technology, Inc. (Chongqing), a wholly-owned subsidiary for in-country operations in China.
Opened first retail kiosk at the Westfield Century City Shopping Mall in Los Angeles, providing customers with the opportunity to view, test drive and place pre-orders in a modern sleek storefront.
ElectraMeccanica will open additional kiosks throughout 2020 in Southern California locations, as well as in the San Francisco area, Washington and Oregon.
Entered into an agreement with FreedomRoad Financial, a national lending institution providing retail vehicle loans to the nation’s leading vehicle manufacturers, to provide consumers with turnkey vehicle financing solutions for the Company’s flagship SOLO EV.
Appointed accomplished financial executive and ElectraMeccanica Chief Financial Officer, Ms. Bal Bhullar, to the Board of Directors effective December 6, 2019.
Appointed Peter Savagian as an Independent Director, a pioneer in automotive electrification with a broad spectrum of expertise in the technology, development, launch and production of electric vehicles including the first modern Electric Vehicle, the GM EV1, the first plug-in hybrid, the Chevy Volt, and the industry’s first long-range value EV, the Chevy Bolt.
Management Commentary
“2019 was a metamorphic year for ElectraMeccanica as we laid the groundwork for the launch of our flagship, single-occupant SOLO EV,” Paul Rivera, Chief Executive Officer of ElectraMeccanica. “Since joining as CEO in August 2019, our entire team has been focused on a reboot and execution, moving the Company from a concept to one that is in commercial production of the most efficient, trend-setting vehicle to move a single occupant. As part of this endeavor, we’ve re-engineered significant safety, comfort and design enhancements that are being implemented into the production ready SOLO. Today, more than ever, we remain focused and committed as we move forward with production plans and methodical launch in the Los Angeles area.”
“Importantly, we’ve also taken several strategic steps to support our go-forward operations, such as the establishment of EMV Automotive Technology, our wholly-owned subsidiary in China that provides us with a greater presence in this important market. In addition, we’ve engaged BDO’s Site Selection & Business Incentives Group to lead a search for a U.S. assembly facility and state-of-the-art engineering and technical center. A U.S. facility dedicated to assembling knock-down kits for SOLO EVs to be sold domestically will minimize uncertainties in the global supply chain, increase logistical efficiencies and reduce or eliminate tariffs.
“In summary, we’ve made unbelievable progress in our asset-light approach to preparing for the launch of a vehicle unlike any other. We’ll continue to leverage our proven retail kiosk model at highly trafficked areas throughout Southern California and the broader West Coast, and as production volumes ramp throughout the year, we look forward to increasing shareholder value, revolutionizing the urban driver experience and providing a long-overdue solution for ‘SOLO Mobility.’”
Fourth Quarter and Full Year 2019 Financial Summary
Revenue in the fourth quarter of 2019 was CAD$0.3 million, compared to revenue of CAD$0.1 million in the same year-ago quarter. Revenue in 2019 was CAD$0.8 million compared with CAD$0.8 million in 2018.
Research and development expenses in the fourth quarter of 2019 were CAD$2.7 million, compared to CAD$1.4 million in the same year-ago quarter.
Research and development expenses in 2019 were CAD$9.5 million, compared to CAD$5.6 million in 2018. 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 fourth quarter of 2019 was CAD$8.3 million, compared to an operating loss of CAD$4.8 million in the same year-ago quarter. Operating loss in 2019 was CAD$27.3 million, compared to CAD$16.9 million in 2018.
Net loss in the fourth quarter of 2019 was CAD$8.1 million, compared to a net loss of CAD$2.1 million in the same year-ago quarter. Net loss in 2019 was CAD$30.7 million, compared to CAD$10.0 million in 2018.
Cash and cash equivalents and short-term deposits were CAD$11.1 million as of December 31, 2019, compared with CAD$18.9 million as of December 31, 2018.
Cash used in operations in the fourth quarter of 2019 was CAD$4.8 million, compared with cash used in operations of CAD$5.3 million in the same year-ago quarter. Cash used in operations in 2019 was CAD$22.5 million, compared to CAD$15.6 million in 2018.
