SOLO - Electrameccanica cut to Hold at Stifel amid 'significant execution risks'
2023-03-21 08:18:43 ET
After the announcement of a number of strategic shifts, Stifel analyst J. Brice Chan advised a wait and see approach on EV startup Electrameccanica ( NASDAQ: SOLO ).
On March 15, the company announced a “fresh start” that included the conclusion of a key relationship with a Chinese supplier, the consolidation of operations in Mesa, Arizona, and a focus on remedying issues that resulted in a recall in February. CEO Susan Docherty also pledged a focus on reaching profitability .
“While at their core, we believe such changes may offer opportunity and equity upside, especially over the long term, they also return the company to square one in terms of the design, development, production, and commercialization of an EV in the marketplace,” Chan commented. “As we've pointed out in the past, there are significant execution risks in bringing an EV to start of production, and with the information currently available to us and the market, and with an executive team that has limited production and manufacturing experience, we are inclined to take a conservative view.”
The uncertain road ahead given the reset pushes him to the sidelines. As such, Chan cut his rating to Hold and his price target from $4.40 to just $0.60.
Read more on the recall issued in February .
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Electrameccanica cut to Hold at Stifel amid ‘significant execution risks’