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London – July 18, 2023 – Until one starts looking at less obvious corners of the electric vehicle world, it will be hard to find many companies that aren’t either bleeding cash at a fatal rate or giving up market share to the combustion giants who have lit a fire under their hoods to chase a trillion-dollar industry. Mentioned in today’s commentary includes: Joby Aviation (NYSE: JOBY), Tesla Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM), NIO Inc. (NYSE: NIO).
As of the end of last year, passenger EVs are a trillion-dollar industry based on global spending on electric cars. In 2022 alone, spending was $388 billion for a 53% spike over the previous year. There are huge revenue opportunities here that the auto giants had been missing out on for years. But it’s also an industry awash with pitfalls for investors hoping to see some profitability at least in the medium-term future.
The EV playing field has become an incredibly crowded one. Only Tesla is profitable, and while the auto giants are gunning for Tesla’s market share, for now, the king of EVs is blowing them away. Q3 2022 returns spoke volumes. Tesla earned 8X the profit per vehicle as Toyota, even though Toyota outsold it 7 to 1.
Given all the pitfalls of a raging industry that is hyper-competitive yet still burning cash at what seems like an untenable rate, it’s time for investors to start looking at different corners and niche areas of the EV boom, where the unexpected happens. In this case, the unexpected isn’t on the roadways; it’s on the water. It isn’t burning cash like crazy, and it isn’t loaded down with debt. It’s also expecting first revenues this year.
The EV Company Supercharging the Waterways
Electric recreational boats aren’t a crowded space like their road warrior brethren. The electric boat market is set to grow at a CAGR of nearly 13% and is on track to be worth a stunning $15 billion by 2030.
In this brand-new space, the first-mover advantage belongs to Vision Marine Technologies (VMAR), the high-speed innovator behind the proprietary PowerTrain outboard motor technology powering the fastest electric speedboat in its class on the market.
Vision Marine’s E Motion boat motor is fully electric, with proprietary PowerTrain technology and IP, and it didn’t just hit the market with a splash … It was unveiled in the first all-electric series production bowrider on the market, Four Winns’ H2e Bowrider.
Not only is the first fully electric, production-ready recreational boat in its class on the market, but it’s also a high-performance machine with 180 horsepower. Capable of full charge overnight, the E Motion battery also has another clear advantage: It’s cheaper than any competing products. It’s turn-key. It’s disruptive. And it’s all powered by Vision Marine’s proprietary E Motion battery and software.
The Key To Capturing Market Share and Revenue
The joint development of the H2 Bowrider was the big debut, but Vision Marine’s strategy for capturing market share is casting a much wider net than this—and one that has the potential to get the market fast and with maximum disruption.
VMAR isn’t planning to play the slow game of selling directly to the public. Instead, it’s targeting Original Equipment Manufacturers (OEMs) who already have customers. And dozens of advance orders have already come in, despite the fact that it’s just been unveiled.
For the multi-billion-dollar boat battery market, this is the most significant development in the industry’s history, and the fastest-moving, too.
Revenues are also positioned to start coming in quickly. This proprietary electric boat motor is expected to generate it first revenues this year already, only months after its launch. And that’s only one revenue category: Vision Marine is also working fast to turn the boat rental market into an all-electric playing field.
Plug-n-Play: Electrifying a $5B Rental Market
Capturing the boat rental market is a novel idea at a time when a global energy transition is in full swing and electric vehicles are already storming the same market on the roadways. The electric car rental market is speeding towards a valuation of $2.9 billion by the end of this decade, and Vision Marine sees the same future for the electric boat rental market.
The total boat rental market is estimated at $5 billion right now, and it’s the next segment slated for disruption as thousands of resorts and marines around the world are under pressure to clean up the waterways and get on board with the energy transition.
In this segment, Vision Marine (VMAR) is far ahead of the game. Its flagship Newport boat rental business took in $4 million in revenues in 2022 (at 35% profit margin) from 300,000 clients in its first three years of operation.
This year, we’ll see two more electric boat rental locations launch, and then it’s all about selling franchise licenses for a massive scaling-up. While profit has been the bogeyman of the EV industry, VMAR breaks the mold.
Its electric boat rental segment is already earning revenues and expanding rapidly, while first revenues from its biggest debut yet—the Powertrain boat motor—are expected this year. That positions VMAR to be free-cash-flow positive by the end of next year, with two profitable divisions by 2025.
5 Reasons to Keep A Close Eye on VMAR
Proprietary technology: Vision Marine has clear product leadership in a competitive landscape at a critical juncture in a global energy transition. Behind that product leadership is ten years of IP development and proprietary tech in electric engines and powertrains.
Zero debt: Enough said. Tesla is only “mostly” debt-free after 20 years.
First revenues this year: Vision Marine is generating early sales with advance orders and smartly targeting boat manufacturers who already have customers at a time when the outboard engine market is one of the biggest and fastest-growing sector of boat sector.
Major growth runways: The franchise model for VMAR’s electric boat rental segment will allow a highly profitable model to scale fast.
While the EV segment has had a hard time realizing profitability, even as it proves to be an astounding disruptor of the auto industry, Vision Marine (VMAR) has found a niche area ripe for the kind of proprietary technology that investors love.
EV Makers Are Flying
Joby Aviation (JOBY) is a California-based company that has been pioneering the development of electric vertical take-off and landing (eVTOL) aircraft. They aim to launch a commercial passenger service using their aircraft, which could revolutionize short-haul travel and alleviate congestion in urban areas.
Joby’s aircraft is a five-seater electric air taxi that is capable of flying up to 150 miles on a single charge at speeds of up to 200 mph. The company’s ambitious plan to create an air taxi service represents a significant leap in the electric vehicle industry, extending the domain of electric transport from the road to the sky.
As the leading name in the electric vehicle (EV) industry, Tesla Inc. (TSLA) has made a significant impact not just on auto manufacturing but on global perceptions of electric mobility. Tesla’s sleek designs, unmatched performance and ‘Supercharger’ network have reshaped consumer expectations of EVs, driving increased adoption.
Furthermore, Tesla’s vertically integrated business model enables it to control the supply chain and production processes, providing a competitive edge. Some might consider Tesla’s robust ecosystem, encompassing energy generation and storage, in addition to vehicles.
Ford Motor Company’s (F) entry into the EV market demonstrates its commitment to innovation and sustainability. The Mustang Mach-E signals a new era for the automaker, bringing the iconic Mustang brand into the electric age. This foray into EVs has been well-received, gaining recognition for performance and design.
Ford’s efforts extend beyond product development to include substantial investments in manufacturing and charging infrastructure, crucial elements for EV adoption. Additionally, the company’s ‘BlueCruise’ autonomous driving system showcases Ford’s commitment to the future of mobility.
General Motors Company’s (GM) progress in electrification showcases its dedication to leading the industry’s transformation. The company’s proprietary Ultium battery technology offers flexibility and power across a range of vehicles, while significantly reducing costs, a key to making EVs more accessible. GM’s ambitious goal of 30 all-electric models globally by 2025 showcases its commitment to an all-electric future.
GM’s investment in autonomous vehicle technology, primarily through its Cruise subsidiary, further emphasizes its forward-thinking approach. Cruise has been testing autonomous vehicles in San Francisco, positioning GM to be a leader in this burgeoning market.
NIO Inc. (NIO) has emerged as a leader in China’s premium electric vehicle market. The company has gained a reputation for innovation, with vehicles like the ES8, ES6, EC6, and the ET7 luxury sedan, which all offer impressive range, performance, and high-tech features.
Moreover, NIO is pushing the boundaries of EV technology with its Battery as a Service (BaaS) model, which allows customers to purchase a vehicle without a battery, reducing the upfront costs. Users can then subscribe to a battery plan and upgrade or swap their battery at NIO’s power swapping stations, reflecting an innovative approach to EV ownership and infrastructure.
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