Arcimoto Inc: New Acquisition Helps EV Stock Soar in 2021

Arcimoto Inc’s Acquisition Opens Doors to New Line of EV Products

When it comes to electric vehicles (EVs), most investors turn their gaze toward Tesla Inc (NASDAQ:TSLA).

And TSLA stock has been on a great run. But there are other, more attractive EV stocks that have performed much better. One I’ve been banging the drum on for a while now is Arcimoto Inc (NASDAQ:FUV).

I last wrote about Arcimoto stock back in November, when it was trading at $9.50. Since then, the stock has made some pretty serious moves. Currently trading at $21.89, FUV stock is up 1,290% year-over-year, 65% year-to-date, and 297% over the last half-year.

How has Tesla stock done over the same time frame? It’s up 574% year-over-year, 18.3% in 2021, and 192% over the last half-year. Solid, but nothing compared to Arcimoto stock. Better yet, FUV stock has a lot more near-term upside potential.

Last November, Arcimoto Inc reported blockbuster third-quarter results. More recently, the company announced plans to acquire Tilting Motor Works, a move that will see the company create a whole new line of products.

Chart courtesy of StockCharts.com

FUV Stock Overview

Arcimoto designs, develops, manufactures, and sells EVs. Unlike most EV companies, which are focused on traditional four-wheel cars and trucks, Arcimoto has been cornering the three-wheeler market and taking on the electric car. (Source: “Q3 2020 Quarterly Corporate Update Webinar,” Arcimoto Inc, last accessed January 29, 2021.)

The company is concentrating its efforts on four different vehicles: Fun Utility Vehicle (FUV), “Roadster,” “Deliverator,” and “Rapid Responder.”

Arcimoto began production of its FUV, a two-seater urban vehicle, in September 2019. On November 16, 2020, the company announced that it had begun developing the Roadster, a new three-wheeled model aimed at the recreational motorcycle segment. (Source: “Arcimoto Begins Development of the Roadster,” Arcimoto Inc, November 16, 2020.)

The Rapid Responder, designed for emergency, security, and law enforcement services, is in the pilot testing phase, as is the Deliverator, which—as the name implies—is for delivery services.

Arcimoto to Acquire Tilting Motor Works

On January 25, Arcimoto Inc announced its plan to acquire Tilting Motor Works for a combination of cash and shares of about $10.0 million. The transaction is expected to be completed in the first quarter of 2021. (Source: “Arcimoto to Acquire Tilting Motor Works,” Busines Wire, January 25, 2021.)

Tilting Motor Works builds kits that convert motorcycles into three-wheelers with a suspension system that allows riders to lean safely into turns. The trikes end up looking similar to Arcimoto Inc’s vehicles.

“This acquisition is a springboard for creating a whole new line of Arcimoto products aimed at true micromobility, ” said Mark Frohnmayer, Arcimoto’s founder and CEO. (Source: Ibid.)

Tilting Motor Works founder and CEO Bob Mighell said the company will continue to make its kits and will begin developing new Arcimoto products.

The acquisition comes on the heels of Arcimoto raising more than $53.0 million in a series of direct offerings.

Manufacturing Capacity to Expand

On January 6, Arcimoto Inc announced that it had agreed to purchase a 185,000-square-foot manufacturing site in Eugene, OR. That’s almost the size of four NFL football fields. (Source: “Arcimoto Enters Purchase Agreement to Expand Manufacturing Footprint by 185,000 Square Feet in Eugene, Oregon,” Business Wire, January 6, 2021.)

The new site, which is more than five times the size of the company’s current manufacturing facilities, will be instrumental in helping Arcimoto Inc achieve mass production.

“In 2020 we articulated an aggressive goal to achieve mass production within two years,” said Frohnmayer. “We believe the acquisition of this existing manufacturing facility is a critical leap toward our goal.” (Source: Ibid.)

Strong Third-Quarter Results

Last November, Arcimoto Inc announced that its revenue for the third quarter ended September 30 came in at $683,895, a huge increase over the third-quarter 2019 revenue of $33,211. (Source: “Arcimoto Reports Third Quarter 2020 Financial Results and Provides Corporate Update,” Business Wire, November 16, 2020.)

The big increase was a result of the resumption of vehicle production and customer deliveries, including the deliveries of 31 vehicles in September.

Arcimoto Inc reported a third-quarter net loss of $4.6 million, or $0.15 per share, compared to a net loss of $4.0 million, or $0.22 per share, in the same prior-year period.

The company ended the third quarter with cash and cash equivalents of $17.0 million, compared to $5.8 million as of December 31, 2019.

Analyst Take

Arcimoto stock is one of the best EV stocks.

As mentioned earlier, the company has two vehicles in production and two more in the pilot stages. Moreover, it recently announced a strategic acquisition, the  expansion of its production facilities, financial results that surpassed every prior full-year results, and a balance sheet that’s the strongest it has been in the company’s history.

2020 was a great year for Arcimoto Inc, but 2021 is shaping up to be even better.