If you’re going to invest in Electrameccanica Vehicles (NASDAQ:SOLO) stock for the long term, you have to be willing to stay the course and celebrate the small victories. That’s my message to investors in a time when the share price seems to be stuck in neutral.
The last thing you want to do is get jealous of Nio (NYSE:NIO) investors. It’s tempting to compare the two stocks. Both of them traded at $2 and change earlier this year. Today, NIO stock is above $25 while SOLO is still $2 and change.
Constantly comparing your investments to other people’s investments isn’t a constructive thing to do. It could cause you to abandon a perfectly good trade. Worse yet, you might end up chasing the price of an already expensive stock.
My contention is that Electrameccanica Vehicles still holds great promise in the electric vehicle domain. The company is making progress, even if it’s relatively low-key. Hopefully, this progress will eventually be reflected in the SOLO share price.
A Closer Look at SOLO Stock
During the summer of 2020, electric vehicle stocks all seemed to ascend in tandem. For the most part, I believe that this was due to the breathtaking climb in Tesla (NASDAQ:TSLA) stock.
Still, even though the “Tesla effect” might have been the catalyst, the rise in the SOLO stock price was nonetheless dramatic. The sentiment was euphoric as traders bid SOLO up from less than $2 to the 52-week high of $6 within a couple of weeks.
Chasing parabolic moves is rarely a good strategy (in my humble opinion). Thus, SOLO stock soon dropped into a range between $2 and $3. The stock has stayed there for quite a while now.
The bulls did make a valiant attempt to break SOLO stock above $3 in mid-October. However, that attempt failed and the stock is back in the range again. Will SOLO ever escape and have its liftoff moment?
Style and Functionality
Fans of Electrameccanica Vehicles’ SOLO model cars tend to like the way they look. These are truly unusual three-wheeled vehicles that have to be seen to be appreciated.
Yet, the electric vehicle market isn’t just about looks. It’s also about promoting clean energy, and lately the trend has been toward more functional vehicles.
Fortunately, Electrameccanica Vehicles is well aware of this trend and is taking action. In 2021, the company expects to roll out utility and fleet versions of its SOLO vehicles.
We’re not talking about huge 18-wheel cross-country trucks here. Remember, SOLO vehicles aren’t meant to be huge. Rather, they’ll be right-sized for “purpose-built for utility and fleet applications, including food delivery, small parcel and post distribution, technician transportation for service calls and security.”
I’m personally looking forward to the rollout of the SOLO utility and fleet vehicles. Electrameccanica is known for producing highly efficient vehicles, so their new SOLO versions could be a big hit with businesses seeking to reduce transportation costs.
Again, the overarching theme here is patience. Unlike Tesla, Electrameccanica Vehicles isn’t about flash and grandeur. Investors shouldn’t expect Electrameccanica to grab headlines, nor should they expect SOLO stock to shoot to the moon this year.
Instead, investors should acknowledge progress when they see it. For instance, Electrameccanica recently narrowed down its prospective locations for the company’s planned U.S.-based assembly facility and engineering technical center.
The two finalist locations are the Phoenix, Arizona metro area and the Nashville, Tennessee region.
Besides creating hundreds of new jobs, the new facility will “feature a state-of-the art engineering technical center, including plans for multiple labs to support ongoing vehicle, chassis and power electronics testing as well as comprehensive research facilities.”
To me, this is what a hyper-growth company looks like. By expanding into a new region and building a new facility, Electrameccanica Vehicles is demonstrating that the company expects to generate profits and thereby deliver value for shareholders.
The Bottom Line
Will SOLO stock break out of its range this or next week? That’s not the key issue to worry about.
Instead, stay the course and hold your shares as the long-term view on Electrameccanica Vehicles suggests incremental but steady progress and, eventually, a breakout moment.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
More From InvestorPlace
- Why Everyone Is Investing in 5G All WRONG
- Top Stock Picker Reveals His Next 1,000% Winner
- Radical New Battery Could Dismantle Oil Markets
- Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company
The post Electrameccanica Vehicles Stock Won’t Stay Stuck Forever appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.