After the subject of electrical automobiles comes up – because it does – the very first firm called is Tesla (NASDAQ:TSLA). Tesla has likely done more than another organization to bring electric automobiles to the mainstream. And it’s become the world’s most valuable automobile manufacturer on this way. What about ElectraMeccanica Vehicles Corp (NASDAQ:SOLO)? Haven’t heard of the Canadian maker of micro electrical cars? Probably not. However, with SOLO stock priced at about $3 (and up 37% in 2020), it’s a inexpensive entry into investing in the electric automobile industry.
Yes, $3 is a lot less expensive compared to 1,489.77 a talk in Tesla will place you back. However, prior to making the jump it’s important to realize ElectraMeccanica Vehicles isn’t any Tesla.
Will Buyers Purchase 3 Wheels plus a Chair?
ElectraMeccanica’s very first generation automobile is the Solo, that is expected to be published later this season. It includes a U.S. beginning price of $18,500 that is a deal price for any new automobile – let alone a totally electrical model. That’s only a little over half of the beginning price of Tesla’s cheapest Model 3.
Sounds fantastic, but possible buyers are comparing Apples and Oranges.
The Solo is a three-wheeled car (there’s just one wheel on the back axle), with seats for one occupant. There’s a tiny back trunk, but space is tight. There’s warmth along with AC, a heated seat, an AM/FM/Bluetooth stereo, and an LCD device cluster. Buyers have a choice of red, black or white paint. In comparison to the majority of contemporary vehicles which game touchscreen screens with Apple CarPlay, leather seats alternatives, and a package of security and convenience features, the Solo is fairly spartan.
Since InvestorPlace contributor Josh Enomoto points out, the micro car’s estimated 10 minute zero to 60 mph period of 10 minutes is completely pokey. That’s slow to get a minivan. To get a single-seat electric vehicle? Winter is also an issue, particularly with rear-wheel push and one rear wheel. ElectraMeccanica claims the Solo performs better when pushed in dry or moist conditions, over 41 levels. It indicates:
“If there is ice, heavy snow or very heavy rainfall out there, let your Solo take a break!”
And then there’s battery array. EV makers are pushing beyond the 400 mile range now. Entrance amount EV’s with bigger batteries are hitting the 150 mile scope. The Solo’s range is projected at “up to” 100 miles.
The Competition Isn’t Tesla
ElectraMeccanica may be counting on some of the Tesla halo effect around EV’s, but the Solo clearly isn’t competing against Tesla cars. The plan is that will come later, with the company’s Tofino and eRoadster models.
The Solo is going to face a tough slog against electric cars in the non-luxury segment. Take the Nissan Leaf. In production since 2010, it holds the crown as the world’s top-selling electric vehicle. It’s not as small as the Solo, but it’s still a compact that’s ideal for driving and parking in urban environments – the Solo’s intended area of operation.
In the U.S., the latest Nissan Leaf has a starting price of $31,600. For that price you get a proven electric car with 149 mile range, four wheels, seating for four, advanced safety systems including automatic emergency braking, a touchscreen display plus remote app access, Apple CarPlay and Android Auto integration, zippy acceleration, and the ability to drive in any weather conditions. Plus, you can have the Leaf serviced any of Nissan’s 1,000-plus U.S. dealerships.
The Solo costs $13,000 less than the base Nissan leaf. But the Leaf is still affordable enough (especially with incentives that can bring its price down to $24,100) that the many compromises just don’t seem worth the savings. And it’s not just Nissan. Virtually every automaker is getting into the affordable EV game.
Bottom Line on SOLO Stock
SOLO stock was trading near $15 in 2017, shortly after the SOLO EV micro car was first unveiled. The excitement quickly wore off and it dropped to penny stock status just a few months ago.
With the launch of Solo imminent, shares in ElectraMeccanica have popped and are now priced about $3. They could go higher as launch hype ramps up. After all, the company can lay claim to offering the most affordable EV car in the U.S. market once the Solo hits the streets. However, if the micro car lands with a thud – and it has a lot of strikes against it – SOLO stock is likely to drop, and quickly.
Brad Moon has been writing for InvestorPlace.com because 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015. As of this writing, Brad Moon did not hold a position in any of that the aforementioned securities.
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