ElectraMeccanica gets price target boost from Roth as SOLO EV shows commercial promise

ElectraMeccanica Vehicles Corp (NASDAQ:SOLO) is positioned to develop a backlog of orders for its SOLO electric vehicle, according to analysts at Roth Capital Markets, which raised its price target for the company’s stock to $12.50 from $7.50 and reiterated its Buy rating in a note published Monday.  Roth views the three-wheeled electric vehicle as a contender for fast food and other product deliveries.   “We believe the pandemic is a tailwind for fast food chains exploring better delivery options,” Roth wrote. “Chains look to avoid third party delivery costs and balance brand identity implications of operator- vs. company-owned vehicles. The SOLO's 100-mile range, low operating cost, and std telematics make the vehicle a good fit, in our view, particularly when location data can be integrated into a chain's kitchen software. We would not be surprised if SOLO made a couple announcements with major chains after customers validate plans.” Commercial deliveries of the SOLO are expected to begin in the first quarter of 2021. The company’s facility in China produced six units in the third quarter of this year, and Roth expects 15 to 20 units to be produced in the fourth quarter, followed by 100 in the first three months of 2021. The Vancouver-based company has been successful in drawing in talent from automobile original equipment manufacturers (OEMs), Roth noted.  “Hiring at ElectraMeccanica points to a maturing sales operation,” the firm wrote. “The recent hires of seasoned EV professionals include a director of sales, director of marketing and fleet sales manager, all coming from tier-1 OEMs, including Tesla and General Motors. We expect the strong EV experience of recently added executives to contribute to a growing order backlog, particularly through the six new retail locations.” ElectraMeccanica is opening six new retail stores in California and Arizona, in addition to its four existing stores.  Engineered for a single occupant, the SOLO has a range of 100 miles and a top speed of 80 mph, making it safe for highways. The EV features front and rear crumple zones, side-impact protection, roll bar, torque-limiting control, as well as power steering, power brakes, air conditioning and a Bluetooth entertainment system.  Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com Follow him on Twitter @andrew_kessel