Battery Electric Vehicle News / Enjoying the Transportation Revolution

JKenH

I dont expect to be popular for pointing this out but Arcimoto with a market cap of $626 million is in bubble territory.

I think once again investors have got caught up in the general euphoria about electric vehicles and are buying shares of any company that makes a battery powered vehicle on the expectation that their share prices will just go on rising.

In its last financial statement Arcimoto in April 2020 (for the year to 31 December 2019) advised it had delivered 46 vehicles and had pre orders for 4,197 units. It actually felt it was significant to mention a contract to deliver 160 units over 4 years. Since the financial statement in April 2020 the share price has gone up around 1000%. By Nov 2020 Arcimoto had built 79 units YTD. If it made it to 100 units in 2020 then it would have sales approaching $18m.

If we were adopt a forward price to sales ratio of one (a common metric deployed to value growth companies who aren’t actually making any money at the moment) then it would need sales of 350,000 units annually to justify its market cap. My concern is not only whether Arcimoto could produce that number of vehicles but if a market for that number exists?

The company’s founder said in 2019 that Arcimoto’s goal was to produce 10,000 units a year. Even that might be ambitious. After all he also said the company’s first customers  are “early adopters who’ve been following the company, drinking the Kool-Aid for a long time. “

Yes its a fun looking machine but there have been a lot of fun trikes in the past that have had rave reviews but none has ever gone on to sell in significant numbers. If the FUV does take off then it wouldn’t be too difficult for other competitors to move in so I can’t ever see it selling the numbers it needs to justify the current share price. That is not to say that in the current frenzied dash for EV stocks the price won’t go on rising but I wouldn’t want to pile in myself at this price. 

JKenH

ABrass said:

JKenH said:

JKenH said:

Tesla slashes Model 3 price in Europe by up to 9 per cent

Edit: 2nd link added

https://thedriven.io/2021/01/21/tesla-slashes-model-3-price-in-europe-by-up-to-9-per-cent/

https://insideevs.com/news/467455/europe-tesla-lowers-model-3-prices/

Why are Teslas so expensive in the UK?

In the UK a Tesla M3 costs £40490 before government credit.

In the US a Tesla buyer pays the equivalent of £28609 before any incentives.

In Germany a Tesla buyer pays the equivalent of £35457 before incentives.

UK price has VAT, US doesn't include it.

I believe there's a 10% tarrif on US cars.

No idea on the Germany front, but my guess is that the recent price changes in Europe are due to supply cutting over to the cheaper to run China factory. We haven't had a price cut because they're not building RHD units for us there yet.

Maybe a price cut is on the way

Tesla Model 3 Right Hand Drive fleet spotted in Giga Shanghai ready for export

https://www.teslarati.com/tesla-model-3-rhd-giga-shanghai-export-first-batch-photos/

Martyn1981

Alternatively, given the average price to earnings ratio for auto stocks of about x10, then 10k units sold at an average price of $20k, would give you a market cap of approx $2bn. Or in the future 50k units sold at $12k(+) would be ~$6bn.

Perhaps things look a lot brighter if you multiply 350,000 units at $17,900 and find it = $6,265,000,000 (not $626m).

JKenH

Martyn1981 said:

Alternatively, given the average price to earnings ratio for auto stocks of about x10, then 10k units sold at an average price of $20k, would give you a market cap of approx $2bn. Or in the future 50k units sold at $12k(+) would be ~$6bn.

Perhaps things look a lot brighter if you multiply 350,000 units at $17,900 and find it = $6,265,000,000 (not $626m).

Yes, sorry, not having enough 0s on my calculator (it came up with error) I scaled the numbers down and got one too many 0s. So, yes, they would need just 35000 units at £17,900 for a future price to sales ratio of one. Production is one thing but to scale sales up to that level might be more difficult if the market isn’t there.

Having acknowledged my error with the calculator I do have to point out that in working out a potential market cap based on an average price to earnings ratio of 10 one has to remember that ‘earnings' means profit not sales. (As an example Toyota in 2020 enjoyed sales of $279 bn but their net income was only $19.35bn which against their market cap of $207bn equates to a P/E ratio  of 10.7 in line with what you suggest.) 

You do need therefore to scale down your calculation of value of £6bn by replacing sales with earnings (profit). As a start up manufacturer one can only speculate on the level of profit, if any,  Arcimoto might enjoy. 

I do believe Arcimoto is in a very different position to Tesla as unlike the electric car industry there is no established trike market to steal sales from and neither is there any government pressure (or incentive I suspect) to drive the electric trike industry. Arcimoto effectively has to grow a new market from scratch. They also have to demonstrate that they can rapidly upscale their production from 100 to 50,000 units a year to meet their own projections.

I still would be concerned about their valuation.

Martyn1981

A couple of articles covering positive news for potential BEV buyers on both sides of the pond.

In the UK Tusker has looked at average weekly mileage and recharging needs and offers attractive salary sacrifice schemes:

In UK, 79% Of Drivers Could Charge An Electric Car Just Once Every Week Or Two

A new study out of the UK highlights this in an interesting way. It points out that 79% of drivers in the country drive fewer than 150 miles per week, which could easily be met with one charge in a Tesla Model 3 SR+ (278 miles), Audi e-tron (252 miles), or basic Volkswagen ID.3 (258–264 miles) — all ratings according to WLTP rating system. If you get a longer range model, like a Tesla Model 3 Long Range (360 miles) or Volkswagen ID.3 Tour (337 miles), you could potentially charge up just once every two weeks.

In other words, seriously, range & charging time are not a big deal at this point.

Tusker also points out that 75% of respondents considered electric vehicles to be within their budgets, while 25% thought they were just for rich people beyond their means. Tusker’s response is: “When looking at the numbers this minority view is quickly dispelled with a £42k Tesla Model 3 available on Tusker’s salary sacrifice scheme from as little as £399 per month, and the £26k Corse-e from just £249 per month, both inclusive of maintenance and insurance on a four-year agreement.”

And in the States, we have MIT issuing positive comments:

New York Times: Electric Cars Are Cheaper & Cleaner

A feature in the New York Times, citing a recent study from the Massachusetts Institute of Technology, definitively stated: “Electric vehicles are better for the climate than gas-powered cars…[and] despite the higher sticker price, electric cars may actually save drivers money in the long run.”

The MIT team calculated both the emissions and the full lifetime cost, including purchase price, maintenance and fuel, for almost every new car model on the market. The conclusions (old news to you, dear readers, but surely a revelation to many Times readers): electric cars are “easily more climate-friendly than gas-burning ones,” and over their lifetime, they often end up being cheaper.

Martyn1981

The good BEV news for Europe continued through the end of the year, so much so, that it's almost not worth mentioning anymore (almost), but the great news comes from Italy an important market because it's one of the larger European markets, but has been lagging considerably. But if December is anything to go by, and not just an outlier, then they are finally starting to catch up.
Also clear is that the Italians do love a small car, especially if it's Italian, like the Fiat 500e.

Fiat 500e Dominates Italy’s EV Market In December, & BEVs Grow Eightfold!

The year of coronavirus has just ended on a high note for EV markets throughout Europe. With traditional car sales down everywhere by double-digit percentages, electric cars have taken charge, offering a taste of things to come. This is also true for Italy, where December monthly EV sales skyrocketed to over eight times last year’s levels!

JKenH

Porsche adds new entry-level Taycan with two battery options

https://thedriven.io/2021/01/25/porsche-adds-new-entry-level-taycan-with-two-battery-options/

JKenH

NORTH EAST “COULD BECOME ELECTRIC CAR SUPERPOWER”

https://www.insidermedia.com/news/north-east/north-east-could-become-electric-car-superpower

JKenH

Shell to acquire UK's largest electric vehicle charging network

https://www.reuters.com/article/us-ubitricity-m-a-shell-idUSKBN29U0TC

EricMears

JKenH said:

Shell to acquire UK's largest electric vehicle charging network

https://www.reuters.com/article/us-ubitricity-m-a-shell-idUSKBN29U0TC

Wondered why I'd never heard of "UK's largest network".  Checked on ZapMap to find they've no rapid chargers and their 'fast' chargers cost an eyewatering 23ppu.  Also,  apart from London & Portsmouth, there's only few cities with a small number of outlets.