IPO Alert: EV maker Phoenix Motor readies for market debut. What to look for

It seems more and more electric vehicle makers are getting inspired by the success of Tesla, Inc. (NASDAQ: TSLA) and adopting various measures to expand, including stock market listing. The market witnessed a sharp increase in EV IPOs this year with the latest being Phoenix Motor Inc., an Ontario-based firm specialized in all-electric buses and trucks.

To Raise $150Mil

The company is looking to raise $150 million from the offering, while details like the number of shares being offered and the offer price are yet to be revealed. It plans to list on the Nasdaq stock exchange under the ticker symbol PEV. The book-runners in the offering are Maxim Group, EF Hutton, and Roth Capital Partners.

Read management/analysts’ comments on quarterly reports

Founded in 2003, Phoenix operates as a wholly-owned subsidiary of SPI Energy. Besides producing electric vehicles, the company builds and operates solar projects in multiple markets. It is led by CEO Joe Mitchell, an automotive veteran with more than three decades of experience. The parent company is also pursuing investment opportunities in green industries like battery storage and EV charging.

Phoenix, which sold its first commercial vehicle in 2014, has delivered 14 work-delivery trucks and 84 shuttle buses as of September 30, 2021. In addition to commercial customers like logistics and utility firms, the company has also been receiving orders for its light and medium-duty vehicles from government agencies.

Financial Data

In the nine months ended September, the company generated total revenues of $1.68 million and incurred a loss of $6.38 million or $0.09 per share, which marked a slowdown from the prior-year period when it recorded higher revenues and a narrower loss. Total operating expenses came in at $6.2 million this year.

The growing investor interest in eco-friendly vehicles has made EV stocks highly sought-after investment options. In February this year, luxury electric car maker Lucid Group, Inc. (NASDAQ: LCID) started trading on the Nasdaq stock exchange, following a SPAC merger that fetched a whopping $4.5 billion.

More recently, Irvine-based Rivian Automotive, Inc. (NASDAQ: RIVN), an electric vehicle maker supported by Amazon.com (NASDAQ: AMZN), made its stock market debut through a blockbuster IPO that drove up the valuation to more than $100 billion.  

Road Ahead

Despite the solid growth in recent years, the global electric vehicle market is still at a nascent stage and the entry of new players is increasing competition. So, companies like Phoenix will have to keep innovating to compete effectively with their more established and resourceful peers. Also, the regulatory environment remains volatile in the case of electric vehicles — unfavorable policy changes might negatively impact the companies.