When I first profiled the three-wheeled Solo vehicles offered by Electrameccanica Vehicles (NASDAQ:SOLO), I warned people that these are highly unusual-looking cars. Now, I’m going to analyze the even weirder-looking vehicles brought to you by electric vehicle upstart Arcimoto (NASDAQ:FUV). And let me tell you, it takes guts to invest in Arcimoto stock.
After all, investors have every right to be concerned about whether the public will accept Arcimoto’s “Fun Utility Vehicles” and whether businesses will take the “Deliverator” seriously.
At least with the Solo cars, there was an emphasis on practicality. The success of Arcimoto’s offerings, on the other hand, assumes that car buyers are ready to buy vehicles that are quirky and, above all else, fun.
The thing is, there’s still a pandemic going on. Is “fun” even an option right now? It’s a legitimate question as Arcimoto’s vision for the future of electric vehicles is either eccentric or ingenious, or perhaps both.
A Closer Look at Arcimoto Stock
July was a month that electric vehicle stock traders won’t soon forget. That’s because in July, Tesla (NASDAQ:TSLA) stock rocketed above $1,500. That event, it seems, induced a frenzy of speculative buying activity in a variety of electric vehicle stocks.
Thus, in July Arcimoto stock quickly spiked from $5.45 to the $8 level. There weren’t any catalysts specifically coming from Arcimoto to justify a price move of that magnitude. Mostly, I believe, it was a function of what I would call the “Tesla effect.”
It is likely that the Tesla effect will continue throughout 2020 and possibly in 2021. Consequently, Arcimoto stock investors will need to pay close attention to Tesla, both the company and the stock.
Wherever Tesla stock goes, Arcimoto is likely to follow, at least to a certain extent. For the time being, though, Arcimoto’s shareholders should be aware of the $8 resistance level. The bulls will want to break through that with heavy trading volume before eyeing the important $10 price point.
Take a Joy Ride
So, is the public ready to buy electric vehicles that combine fun and functionality? Arcimoto’s investors had better hope so. Otherwise, the company and the stock could fail miserably.
If you visit Arcimoto’s flashy landing page, you’ll be confronted with the company’s all-electric FUV or Fun Electric Vehicle model. It’s probably safe to assume that this is supposed to be an alternative to the traditional SUV.
Like the Solo vehicle, the FUV has three wheels. Unlike the Solo, however, the FUV can seat two people. That, in itself, is a fairly significant advantage. The FUV is skinny and the two passengers sit one behind the other, but that could make parking easier and perhaps even reduce the incidence of collisions.
Slim Cars with a Purpose
It’s also important to know that the FUV has a top speed of 75 miles per hour, can plug into any standard 110-volt or 220-volt wall outlet and, interestingly enough, has removable doors.
Production of the FUV commenced in September of last year. Pilot programs for the Deliverator (which, as you might have guessed, is designed for delivery) and the Rapid Responder (geared towards medical first responders) are under way, and the company hopes to start producing those two vehicles later this year.
Come to think of it, are Arcimoto’s vehicles really that weird? They’re slender, but it’s not difficult to imagine a future in which the public becomes accustomed to smaller, more efficient vehicles.
Businesses could use the Deliverator to make last-mile delivery more nimble and cost-effective. At the same time, the Rapid Responder could be a game changer in ultra-efficient critical care delivery.
The Bottom Line
Admittedly, it takes a leap of faith to envision a future of skinny three-wheeled electric vehicles. Yet, this could turn out to be more than just science fiction. With the risks in mind, then, bold investors can take a position in Arcimoto stock in anticipation of a more diverse, and perhaps funner, automotive market.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
