ElectraMeccanica Vehicles Corp (NASDAQ:SOLO), a Canadian electric vehicle designer and manufacturer, posted second-quarter results that demonstrated that it is well capitalized and in a strong financial position with over $250 million on its balance sheet to forge ahead with the buildout of its US Assembly and Engineering Technical Center in Mesa, Arizona.
For the period ended June 30, 2021, the carmaker had cash, equivalents and short-term deposits totaling $250 million, compared to $129.5 million as of December 31, 2020.
During the quarter, the company’s net cash decreased by $10.3 million, which was a result of net cash used in operating activities of $9.4 million and net cash used in investing activities of $1.4 million, offset by net cash provided by financing activities of $456,000.
READ: ElectraMeccanica breaks ground on its US car manufacturing plant in Mesa, Arizona
“As we work through the final stages of engineering enhancements, manufacturing and fulfillment infrastructure, our team has continued to lay a firm foundation for the years ahead,” said ElectraMeccanica CEO Paul Rivera in an earnings statement.
“Construction has begun on our US Assembly and Engineering Technical Center in Mesa, and we’re moving full speed ahead to bring this operation online next year. Thanks to the leadership of our new COO Kevin Pavlov, we’ve made major strides to improve processes, enhance profitability and efficiency, expand throughput and map out the next evolution of vehicle line development.”
Rivera said that like the rest of the car industry and global economy, the company is “navigating through various, well-documented supply chain issues.”
“As we get through this interim period, the long-term backdrop of global electric vehicle adoption and new modes of transport, supported by increased legislative backing, has us confident in a bright future for the SOLO and ElectraMeccanica (NASDAQ:SOLO),” said Rivera.
During the quarter, ElectraMeccanica (NASDAQ:SOLO) took possession of its temporary processing, delivery facility in Mesa, which is directly next to its permanent US assembly facility. “While construction of the 235,000-square-foot project continues, the company will be able to begin staffing and vehicle processing in anticipation of a final build by the end of next year,” said ElectraMeccanica.
When fully constructed and operational, the Mesa facility is expected to create up to 500 new jobs and will be capable of producing up to 20,000 SOLOs per year, according to the company.
Research and development expenses in the 2Q were $4.4 million, compared to $1.4 million in the same period a year earlier. The bump in R&D expenses was due to expenses for the company’s pre-production vehicles, the SOLO and eRoadster.
CFO Bal Bhullar said: “ElectraMeccanica remains well-capitalized … Our plan for the next several months is to continue with our expanded production efforts as well as the buildout for our US base of operations in Mesa, Arizona.”
“Both initiatives are major undertakings requiring significant investment and resources. Going forward, we will continue to equally weigh our prudent expense management approach alongside our commitment to R&D and manufacturing expansion to scale,” he added.
The company has expanded the SOLO retail footprint into 10 additional high-end shopping centers and two new states. “With these additions, ElectraMeccanica now operates throughout 10 metropolitan areas in five western states,” noted the company.
ElectraMeccanica’s flagship SOLO vehicle is a three-wheeled EV engineered for a single occupant. It has a range of 100 miles and a top speed of 80 mph making it safe for highways.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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