On Tuesday of this week, yours truly pointed out that based on 2013's final numbers, Green Automotive Co. (OTCMKTS:GACR) - while not yet a threat to names like Kandi Technologies Group Inc. (NASDAQ:KNDI) or Tesla Motors Inc. (NASDAQ:TSLA) - was coming into its own as an electric vehicle company, and whittling away its uncertainty as an investment. Though a perfectly-clear vision of the future wasn't included in the press release detailing last year's results for GACR, the company did say it would be offering guidance for 2014 later this week. Well, today's the day. And, while KNDI and TSLA still don't have anything to worry about in their immediate future, let's just say Green Automotive still have a lot to look forward to in their foreseeable future.
First things first. The answer to the $64,000 question is, $13.8 million. That's what GACR expects to see on the top line when it finalizes 2014's results in early 2015. The other key number that the market is wondering is, zero. That's how much Green Automotive expects to lose next year on an operational basis.
That's a huge leap, as one can presume that even just modest growth in 2015 means the company is headed for an operating profit within a couple of years. Not bad for a relatively young EV company. The aforementioned Tesla Motors is about 1500 times bigger (in terms of market cap) and it's only been profitable in one quarter - the first quarter of 2013. like Kandi Technologies Group has been relatively consistent on the profit front, but it's not quite a head-to-head competitor with Green Automotive Co.
With all of that being said, it should be underscored that buses are driving the lion's share of current and future growth for this company.
We noted in Tuesday's look at GACR that the company ended 2013 making electric shuttle buses at about a pace of 2 per week, up from none as of March of last year. At roughly $100,000 apiece, this translated into potential annual revenue of about $10 million per year... and that's on top of the sales that its other divisions would be able to drive in 2014.
Well, now the company believes it will be able to scale up production to a pace of 4 buses per week. That's theoretically enough to generate $20 million in revenue per year (though it won't reach that pace until mid-year, so let's call it a ceiling of $15 million for 2014). Nice, but again, that's not even counting the revenue from its other divisions... Liberty E-care, and Goin' Green, plus a newly-acquired refurbished parts business. Also not mentioned anywhere along the way is any new business or new revenue that might stem from the company's involvement in the European consortium behind the EPSILON electric vehicle program, that is endeavoring to deign and build a small, passenger vehicle for eventual commercialization... although Green Automotive's involvement in EPSILON may not bear financial fruit for a while.
Still, the math doesn't add up. Considering the bus-making subsidiary Newport Coachworks is still working on an order of 432 electric buses placed by Don Brown Bus Sales near the middle of last year, the company's bus division alone is not only poised to stay busy for years, but alone should drive more than the projected revenue for 2014. What gives? Most likely the company is looking to over-promise and then over-deliver... not that investors are going to complain.
Whatever the case, interested investors can find all the details and color on 2014 (which includes a wrap up of the recent acquisitions) at the company's website, and specifically, this morning's investor update. It's worth a read for anyone with an interest in the EV world, as this little company could be nipping at the heels of Tesla and Kandi sooner than most might realize. How so? The corporate update explained is was planning retail operations in the United States, and added it believed it would be exporting electric buses to the eastern-Asian market by the end of the year. Green Automotive Co. is really coming into its own now.
For more on Green Automotive Co., visit the SCN research page here, or review the SCN research report here. For deeper details on GACR and its EV opportunities, this report from Wall Street Research takes a much closer look.
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