Electric Car Stocks Are Wild Ride

John Udovich looks at a trio of EV industry stocks that can give investors more headaches than GM's problems with the Volt.

Published: 15-Mar-2012

If you think the Chevrolet Volt is giving General Motors (NYSE: GM) headaches, try taking electric vehicle stocks Li-ion Motors (OTC: LIMO), T3 Motion (NYSE: TTTM) and ZAP (OTC: ZAAP) out for a test drive. To begin with, General Motors (GM) will be halting production of the Chevrolet Volt from March 19 to April 23 because of high inventories because not enough people are buying them. On the other hand and while General Motors (GM) has plenty of cash (thanks to the taxpayer bailout) and gas guzzling vehicles (that people still want to buy) to fall back on, electric vehicle stocks Li-ion Motors (LIMO), T3 Motion (TTTM) and ZAP (ZAAP) aren’t so lucky. Hence and before you make an investment in the “future,” here is a quick test drive of all three electric vehicle stocks:

Li-ion Motors (OTC: LIMO)

Li-ion Motors is focused on the development, manufacturing and marketing of high speed lithium-powered vehicles. On Monday, Li-ion Motors sank 16.33% to $0.251 (LIMO has a 52 week trading range of $0.16 to $5.60 a share) for a market cap of $1.61 million – despite the fact that there appears to have been a number of transactions ranging from $1k to $15k paid by third parties to promote the stock. Li-ion Motors has recently issued a press release announcing plans for further collaboration along with an amended license agreement with Lithium Electric Vehicle Corp. of Canada in order to to benefit from Canadian and Quebec government incentives. However, this is precisely the problem with the electric vehicle industry: It needs a significant amount of government “incentives” or subsidies to stay afloat. Otherwise, investors should note that Li-ion Motors has reported revenues of $711k (fiscal year ended July 31, 2011), $615k (fiscal year ended July 31, 2010) and $476k (fiscal year ended July 31, 2009); net income of $119k (fiscal year ended July 31, 2009) and net losses of $3,934k (fiscal year ended July 31, 2010) and $6,818k (fiscal year ended July 31, 2009); and reported having no cash to cover $2,430k in current liabilities and $4,692k in total liabilities as of October 30th. In other words, Li-ion Motors sounds like a great investment for taxpayers both north and south of the border – right?

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