ElectraMeccanica axes 3-wheeled Solo EV to focus on 4-wheel model

ElectraMeccanica Vehicles Corp., (EM) is giving up on its troubled Solo three-wheel, single-seat electric vehicle and instead plans to develop a four-wheel EV, as it also further shrinks its Canadian footprint.

The NASDAQ-traded company, founded in Vancouver in 2015 by Jerry Kroll and Henry Reisner, as recently as February was still touting its flagship Solo as a revolutionary affordable EV for commuting and light commercial applications.

But the Solo, sold exclusively in the United States, was subject to a voluntary recall in February for unexplained power losses that could increase the risk of a crash.

EM now has decided to buy back all Solos sold since 2019 — estimated at 429 units — at full price, including taxes, and has stopped production of the vehicle at its Mesa, Arizona assembly facility.

Most Solos were produced in China under a manufacturing agreement with Chongqing Zongshen Automobile Industry Co., which was cancelled last December.

EM said in its Form 10-K filing to the U.S. Securities Exchange Commission this week that it was raising potential claims with Zongshen related to defects in the vehicles it produced. EM did not directly connect its buyback with the defects.

The Form 10-K said EM has booked US$8.9 million as an estimate for the cost of the buyback. The company also has about 800 unsold Solos, which the filing said had a net realizable value of US$13.8 million. Solos had an MSRP starting at US$18,500.

In its regulatory filing and previous comments by CEO Susan Docherty, EM pointed to challenges Solo buyers had insuring, financing and servicing the Solo and exclusion from government rebates as reasons for refocusing on a four-wheel product, dubbed Project E4.

The company gave no timeline for developing the new model. EM did not make Docherty available for an interview.

EM also ended production last year at Intermeccanica, a decades-old company founded by Henry Reisner’s father Frank, which made high-quality replicas of Porsche 356 sports cars at a facility in New Westminster, B.C. It was rolled into EM in 2015 and there were plans to produce  high-end electric versions called eRoadster and Tofino.

Kroll, who remains an EM director and major shareholder, said he was not sad to see the original concept scrapped.

“The mission of the company when I started it was to close the last gas station,” he told Automotive News Canada April 18. “If it has two wheels, three wheels, four wheels or 18 wheels, if it’s electric and not a fossil-fuel combustion engine, I couldn’t be more thrilled.”

Intermeccanica’s closure contributed to EM’s shrinkage in B.C. The company last December announced it was cutting 98 jobs, most in Canada, as it concentrated operations at Mesa.

The most recent filing confirmed it was closing its Burnaby, B.C. head office in June and shifting remaining staff to a site in the Vancouver suburb.

EM considers the Mesa facility its headquarters, but a spokesman said for now its official head office remains in Canada.

“I’m sad about the Intermeccanica thing withering away but extremely sad about the ElectraMeccanica thing because . . . the goal was always to do something in Canada,” said Reisner, who retired as EM’s chief operating officer in 2021. “That was the whole point of the company.”

EM’s Form 10-K put the company’s full-time staff at 104 as of April 12, 10 in engineering, research and development, 22 in sales and marketing, 68 administration and four executives.

Meanwhile, EM’s agreement with recreational EV-maker Volcon to assemble three of its models at EM’s Mesa facility will give the company steady income, though its SEC filing says it has enough cash and equivalents to operate for at least another 12 months.