Kandi Technologies reported 2020 results last week, with revenue coming in at $76.9 million compared to $135.7 million in 2019. As we have indicted in previous notes, revenue pressure largely reflects the economic impact of COVID-19.
Revenue pressure on the company’s single largest product category, electric vehicles (EV) parts, was partially offset by 31% and 161% year-over-year increases in sales of off-road vehicles and electric scooters / related parts, respectively. Revenue from sales of electric scooters and related parts represented 7% of total revenue, up from only 2% in 2019. Although we would expect the percentage contribution to decline as sales of EV parts rebound, we believe the category represents a source of revenue growth for KNDI.
Conversely, revenue from sales of electric scooters and related parts represented 7% of total revenue, up from only 2% in 2019. Although we would expect the percentage contribution to decline as sales of EV parts rebound, we believe the category represents a source of revenue growth for KNDI.
We believe KNDI remains poised to benefit from the expected growth of EV sales in the U.S., China and other markets. The new U.S. administration’s goal is to increase the government’s fleet of green energy vehicles. KNDI is one of the few EV manufacturers producing economical cars that are capable of obtaining a relatively long range on a single battery charge.
Ride sharing plans advancing, with potential for strong growth
In China, KNDI also intends to focus on the development of its ride-share program and battery swap service. Kandi recently established of a subsidiary focused on operating a ride-sharing service across China, entered into a collaborative alliance in the market and launched several ride-share pilots that also include KNDI’s battery swap feature.
Given the growing traffic and congestion China faces that, in turn, contribute to its pollution problem, Chinese regulators also look to ride-share as one solution to expand affordable transportation options. China is already the world’s largest ride share market, but KNDI management believes the ride-share market remains under-penetrated.
KNDI is focused on the EV, ride-share and battery niches and, following a recent real estate repurchase agreement and a 4Q20 equity offering, has what management believes is sufficient capital to support R&D to develop EVs and other vehicles, battery swapping technology, and the ride-sharing program.