3 Canadian Electric Vehicle Stocks Wall Street Predicts Will Rally by More Than 95%

The Canadian EV market has demonstrated solid growth this year. In addition, the Canadian Environment Minister is pushing to mandate the sale of a certain number of EVs by the end of 2022. The Canadian EV market shows significant growth prospects, bolstered by the country’s net zero-emission targets and supportive government policies. Wall Street analysts see a more than 95% upside in Canadian EV stocks Electrameccanica (SOLO), GreenPower (GP), and Vicinity Motor (VEV).

 Concerns about the environment and climate change drive the world to look for cleaner alternatives and shift away from combustion fuels. Canadian EV market share has remained steady over the first three quarters of 2021, with one in 20 registered vehicles being an EV. According to the IHS Markit Automotive Insights report, Canada’s battery electric vehicles registration increased 67% year-over-year in the third quarter of 2021.

Canadian Environment Minister Steven Guilbeault has expressed that he wants a national mandate that would compel automakers to sell a certain number of EVs by the end of 2022, also aligned with the target of attaining net-zero emissions by 2050 in the country. Moreover, to settle a dispute with the United States over tax credits on the U.S.-made EVs, Canada proposed to align its EV taxation policy with its neighbor. Prime Minister Justin Trudeau announced consideration of joint EV rebates between the countries to make sure no country gets an unfair trade advantage.

Given this backdrop, Wall Street analysts expect Canadian EV stocks Electrameccanica Vehicles Corp. (SOLO), GreenPower Motor Company Inc. (GP), and Vicinity Motor Corp. (VEV) to rally more than 95% in the near term.

Electrameccanica Vehicles Corp. (SOLO)

SOLO is an electric vehicle developing, manufacturing, and selling development-stage company based in Vancouver, Canada. The company’s flagship product is a single-seat vehicle called SOLO, and it is developing an electric two-seater roadster called Tofino.

On December 13, the company announced that its 2023 SOLO EV is undergoing validation testing at a dedicated temporary facility in Rochester Hills, Michigan. The vehicle is expected to be delivered to the public in late 2022 and should add to SOLO’s revenue stream.

In November, SOLO’s strategic contract manufacturing partner, Zongshen Industrial Group, exercised 1.4 million warrants as of October 28, generating CAD5.6 million ($4.39 million) proceeds for the company. The company expects to continue its operational execution and create sustainable and long-term value for its shareholders.

For the nine months ended September 30, SOLO’s net cash flows from financing activities increased 89.5% year-over-year to $149.57 million. The company’s cash and cash equivalents balance came in at $228.81 million, up 200.8% from the same period last year.

The consensus EPS estimate for the current quarter (ending December 2021) indicates an 84.1% year-over-year improvement. Likewise, the consensus revenue estimate for the ongoing quarter of $0.82 million reflects a rise of 241.9% from the prior-year quarter.

The stock has declined 2.6% intra-day to close yesterday’s trading session at $2.65.

Three analysts rating SOLO has rated the stock Buy. The 12-month median price target of $8.90 indicates a 236.5% potential upside. The price targets range from a low of $6.85 to a high of $13.91.

GreenPower Motor Company Inc. (GP)

Based in Vancouver, Canada, GP engages in designing, manufacturing, and distributing EVs for commercial markets in the United States and Canada. The company sells and leases its product offerings of high-floor and low-floor electric medium and heavy-duty vehicles to the customer directly or through distributors.

On December 10, GP announced the grant of stock options for its Directors and Officers, employees, and consultants. The stock options are subjected to approval from the TSX Venture Exchange, and they are exercisable for a period of five years and at a price of CAD16.45 per share.

In November, GP declared an Original Equipment Manufacturer (OEM) agreement with autonomous vehicle (AV) technology and turnkey vehicle solutions provider, Perrone Robotics, to continue developing on the AV Star, a fully-autonomous certified vehicle. The new offering might prove to be profitable for the company.

GP’s revenue increased 56.7% year-over-year to $4.44 million in the fiscal second quarter ended September 30. Gross profit improved 7.8% from the same period last year to $0.95 million.

GP’s shares have declined 1.4% over the past five days to close yesterday’s trading session at $12.23.

Of the five analysts rating GP, four have rated it Buy, while one has rated it Hold. The 12-month median price target of $24.00 indicates a 96.2% potential upside. The price targets range from a low of $13.00 to a high of $30.00.

Vicinity Motor Corp. (VEV)

VEV, based in Aldergrove, Canada, is a mid-size multi-purpose transit vehicles designer, manufacturer, and seller for public and commercial enterprises in the United States and Canada. The company’s offerings include buses in clean diesel, gas, and CNG drive systems and spare parts. VEV up-listed its shares on the Nasdaq Capital Market and began trading on July 7, 2021.

On November 1, VEV announced that it had received a letter of intent from a British-Columbia-based retail automotive dealer, Pioneer Auto Group, for 100 electric trucks worth approximately CAD14 million ($10.97 million), with first orders expected to start in the first quarter of 2022.

On October 25, the company announced the closing of its underwritten public offering of 3,990,610 units at $4.26 per unit. The approximate $12 million net proceeds are expected to be used by VEV to pay license fees and general corporate purposes such as new product development, expansion of production capacity, and general working capital.

For the nine months ended September 30, VEV’s revenue increased 128.4% year-over-year to CAD49.32 million ($38.64 million). Cash from operating activities increased 1,064.6% year-over-year to CAD9.67 million ($7.57 million), while the company’s cash and cash equivalent balance stood at CAD4.96 million ($3.88 million), up 285.4% from the same period last year.

The stock has gained 2.6% year-to-date to close yesterday’s trading session at $3.91.

The analyst rating VEV has rated it Buy. The 12-month median price target of $25.00 indicates a 539.4% potential upside.

SOLO shares were trading at $2.60 per share on Tuesday afternoon, down $0.05 (-1.89%). Year-to-date, SOLO has declined -58.00%, versus a 25.15% rise in the benchmark S&P 500 index during the same period.

About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.


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