Something is up here and it’s not the stock. This is going to be long, but it raises some questions that I think we need answers to. I am a true believer and was an early investor in Meccanica. However, I have read and seen a lot in the last few years and I believe that the window of opportunity for Meccanica to launch the SOLO is closing, quickly. More and more companies are pushing into the electric commuter market and Meccanica is delaying and pushing the launch of the vehicle further out with no tangible details or deadlines. To me this hints to problems, possibly with the vehicle, the financial situation or the management team itself. Why?
Reading and watching the latest from the company (Link - Bal Bhullar Interview [
] makes me wonder. First of all, why is Bal Bhullar talking about engineering when she has no expertise in this department. Current CEO, Paul Rivera has an engineering background and should speak about company developments and details like that. For example, if we take Bhullar seriously we can expect the G3 SOLO to change “slightly”. Slightly? She said, that they expanded the stance by about 112cm (centimetres) and the SOLO will get a nicer seat and a better audio system. That means the SOLO with its original width of 132cm (52 inch) would almost double in width to about 246cm (96 inch). How big is this seat going to be? The size of a loveseat? Lets get CEO, Paul Rivera in front of the camera to answer real questions and not softball ego-stroking questions like the ones we’ve heard from Proactive (which is a paid service, where you can submit your questions before hand). It seems a little desperate that Meccanica’s last three on-camera interviews have been with Proactive. Why not do interviews with real journalists? The company should seek platforms like Yahoo Finance, Forbes, BNN or other highly credible investor platforms to face real questions. See questions below.
Apparently the executive team has made the decision not to go ahead with production for G1 or G2 versions with no explanation and is instead moving forward with G3 production. It’s my understanding that G2 was supposed to be a production vehicle, but it has now been deemed a “testing and validation vehicle.” Why is this? What was wrong with it? Does this mean G3 could also become a “testing and validation vehicle”? Where will this end and when will the company actually get a vehicle into production? I am losing faith that they will build a final vehicle if they keep moving onto the next gen.
Former CEO, Jerry Kroll and the management team mentioned back in October 2017 that the company has an order book of over 4 billion (press release [
https://investors.electrameccanica.com/press-releases/detail/11/electra-meccanica-announces-4-billion-order-book-for-solo ]. The production release dates of the SOLO in 2017, which got quickly pushed back to end of 2018, to 2019 and now 2020 are constantly changing. (See Management Commentary - [
https://investors.electrameccanica.com/press-releases/detail/56/electra-meccanica-issues-shareholder-letter-and-provides ] Expected delivery numbers:
2019 (5,000 units)
2020 (20,000 units)
2021 (50,000 units)
75,000 vehicles over the next 3 years respectively.
With 2020 right around the corner — this timeline is laughable. In addition the company has gone silent on the Tofino project (about 40,000 reservations - 1,9 billion in book value). We’ve heard nothing from the company on this matter. In fact, if you try to reserve a Tofino on the company website you will find a dead end. I imagine a lot of people made investments based on the Tofino project and numbers associated with. The company raised money to get started on the Tofino development which is not mentioned at all by Bhullar as she looks ahead to 2020. The company had previously stated that a rolling chassis and an expected delivery date of 2020 would be be doable for the Tofino. Is it even legal to promote an electric vehicle project like the Tofino and then use the money for a completely different project?
The last quarterly report was released after markets closed on a Friday - burying it over the weekend. Based on the last financial numbers from Q1, Q2 and Q3, monthly expenses seem to have increased significantly. This means the company will have to start generating revenue rapidly or I imagine Meccanica will soon need another round of financing to keep the lights on.
The people running this company need to be held accountable. It’s time that the ‘key year’ of 2020 starts looking more structured with more details and depth in all company departments.
Questions investors would like to get answered:
When are cars being delivered (hard dates/month with deadline)?
What was wrong with Gen 2 SOLO?
Why are the CFO and CEO only doing sponsored interviews with Proactive?
How many vehicles are coming and at which point?
How many firm pre-orders does Meccanica have for the SOLO backed up with reservation money?
What is the actual burn rate?
How are you planning to spend the remaining capital in 2020?
When will Meccanica become profitable?