The share price of the Dutch parent company Sono Motors is flying low. After a successful Start in November last year it fell below the issue price within around two weeks. Since then, the paper has been in permanent low flight. Apparently unchecked, and a counter-movement cannot be determined. This is unfortunate, but also offers the opportunity to get started.
A good, sustainable concept
In general, the development is amazing in its clarity. Sono Group NV (SEV) shares are currently testing the $5 barrier. After an issue price of US$15 and a high of over US$47. In general, the case is difficult to explain, regardless of all the open questions. A solar electric family car, at an affordable price and equipped with a relatively small battery, is a particularly good and sustainable concept.
It generally meets all criteria that are officially required for sustainable mobility.
The exchange could muster the imagination it has developed on other electrical projects as well. But it obviously doesn't, and there are reasons for that. The buy recommendations and price targets that the Berenberg Bank publishes as the issuer and apparently the only supporter are of no use either.
Because there are massive uncertainties in the background. The advances in product development openly publicized by Sono Motors make anyone with a rudimentary understanding of the processes in the auto industry doubt the schedule. 2023 is set for the series, but important components have not been finalized. You don't see prototypes that would be used for testing on the streets. Of course, a lot is simulated on the computer today, development processes are shortened, but even in the digital age, the year 2022 only has 12 months.
And one of them may already be deleted from the calendar.
Farewell to Trollhättan?
The biggest uncertainty is the place of production. Sono Motors is said to be exploring an agreement with a provider outside of Sweden. Understandable, because the Evergrande sword hovers over NEVS and Trollhättan. The Chinese owner is busy with the in-house debt crisis and refuses (so far) to let NEVS go or bury his automotive future plans.
How the relationship NEVS - Evergrande will continue is completely open. Even if one agreement about the change of ownership should be in sight. Perhaps management overestimated itself and gambled away its preferred idea of freedom. In case of doubt, it is also the Chinese owner who will have the greater staying power.
A safe manufacturing partner could help Sono Group's stock out of the trough. He could fuel the imagination that is sorely needed. And if that were a farewell to Trollhättan and the old Saab factory, then so be it.
Because, and there lies another problem, at the current stock price it will be difficult if not impossible for Sono Motors to get the necessary financing for production.
Now is the time for gamblers – or for visionaries. It depends on your point of view. If you are daring and willing to accept a total loss, you can buy the Sono Group NV share (IF V) stock up.