What happened
After soaring more than 20% Thursday, shares of specialty EV maker ElectraMeccanica Vehicles (SOLO -3.55%) came back down to earth a bit on Friday, losing 11%.
So what
Many EV makers' stocks gained momentum Thursday after start-up Rivian Automotive reported some good news earlier in the week. Rivian said it nearly doubled its cumulative production volume in the second quarter since beginning production last fall.
That news eased some of the concerns that have been weighing down the share prices of start-ups in the EV sector, and helps explain the jump in ElectraMeccanica's stock. But some investors may have decided to take profits Friday given that there was no company-specific news driving ElectraMeccanica's pop.
Now what
Canada-based ElectraMeccanica is also in the production stage: It built 170 of its flagship three-wheeled SOLO vehicles in the first quarter. The SOLO is a purpose-built, single-seat EV targeting urban users such as food delivery services. Its base price is under $20,000, with the delivery-oriented cargo model starting at under $25,000.
The company brought in revenue of just over $1 million in the first quarter, up 400% versus the prior-year period. It still reported a net loss of nearly $18 million, however, and holds just $215 million of working capital on its balance sheet.
Investors haven't been overly confident about the company's prospects. ElectraMeccanica shares have dropped more than 60% over the past year. Management says it is on track to bring a new production facility in Arizona online before the end of this year. Investors will want to see if the SOLO catches on within its target markets. Until its appeal becomes clearer, the stock could be volatile, moving based on events in the EV sector in general, as it did over the past two days.
