Almost three weeks ago the news came out that ElectraMeccanica Vehicles Corp. ($SOLO) named Arizona and Tennessee as their two final potential locations for a new factory to assemble the three-wheel electric cars. The company is expected to announce a final decision at the end of November 2020. In the meantime, little news about SOLO has been released and this appears to be having an effect on shareholders. Does the customer remain gullible or is there a danger of a downward spiral?
More news is needed from the company
In addition to the correspondence regarding the location of the new engineering center, SOLO would have received strong interest from utility companies and commercial fleet operators. That seems to have shrunk from the latest polls. The news that SOLO has kept its manufacturing contract with Zongshen Industrial Group of Chongqing hasn’t changed much. Zongshen is a motorcycle manufacturer and has to develop SOLO’s for the world market and supply kits for assembly in the United States. It was previously said that the commercial production has started and deliveries are expected this fall. As November is approaching, receiving news about this matter only seems to be a matter of time.
Is the strength of SOLO a risk at the same time?
The power of the SOLO seems to mainly focus on sustainability and the practical use of a vehicle in urban areas. With this futuristic three-wheeled single-seater, technically the vehicle is a fully enclosed motorcycle, the company firstly wants to win the hearts in the city of glamour, Los Angeles. A city where everything seems possible and which is quite trend-sensitive. Priced at $18,500, the SOLO qualifies for a $750 rebate from the California Clean Vehicle Rebate Project.
Research has shown that California is the largest market for electric vehicles in the United States. A place where traffic continues to deteriorate and air pollution is a chronic problem. SOLO therefore believes in an increasing demand for electric vehicles in California. This argument is reinforced after Governor Gavin Newsom’s recent executive order mandating that 100% of all new passenger cars sold in California must be electric by 2035.
A counter-opinion about the single-seater is that at the same time more municipalities are banning vehicles in urban areas by realizing car-free shopping zones. In addition, the new generation seems to give less importance to a vehicle and flees from the busy urban areas. At the same time, many car users prefer to have comfort when travelling. Although it is reported that 90% of motorists in California travel alone, that 10% of car journeys may prove essential, especially when other vehicles offer the opportunity to travel with someone. In addition, the vehicle has very little luggage space to be able to transport a lot of things. It therefore seems to compete more with a motorcycle rather than a car. This may change the character of the SOLO to a non-primary means of transport, something ElectraMeccanica seems to think differently about.
It will be a vehicle for a particular niche market, regardless of whether you think the design is beautiful or ugly. This also raises the question of which profile suits a SOLO owner. At the moment several electric car manufacturers are emerging that seem to have a better range than the SOLO. These are also companies that regularly publish news or provide updates. A good example of this is NIO, Inc. ($NIO). The share of this company has therefore increased almost 400% in the past six months. Something SOLO hasn’t experienced, as it has seen little movement in its share after a short peak in July.
Although the vehicle is electrically powered, in this case the advice sounds: “Solo, step on the gas!”
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