The Fourth of July. New Year's Eve. Toyotathon 2010. Causes for celebration, each and every one, but they've got nothing on the fireworks show that broke out at UQM Technologies
In one frenzied day of trading, shares of the little alt-energy pioneer exploded upwards by 30%. Amazingly, it seems all of the fuss came from the publication of a single press release. In it, UQM announced that Audi has chosen it to supply electric drive motors for testing in its new "A1 e-tron" all-electric car. According to UQM, it's ready to produce as many as 40,000 such electric motors for Audi, but … will Audi buy 40,000 motors?
This, of course, is the question. There's a big difference between being ready to produce a product, and having a buyer ready to pay for it. Right now, Audi is just testing the e-car concept. When Saab announced a similar deal with UQM last week, it placed an order for a grand total of 70 of UQM's motors. And even UQM says only that it is "part of" Audi's testing -- which suggests there are other companies competing. In short, this may not be the game-changer that UQM fans think it is.
On the other hand, we're still early in the electric-car game -- despite General Electric's
Pioneering battery makers A123
When you consider further that the company came within a whisker's breadth of breaking even on its operations last quarter -- without a major contract to help it out -- it's not hard to imagine how profitable UQM could become once it finally wins one.
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General Motors is a Motley Fool Inside Value recommendation, and Ford is a Motley Fool Stock Advisor selection, but Fool contributor Rich Smith owns no shares of any company named above. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.