LONDON - Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP), a British electric vehicle brand, announced today it has signed a contract with AIH Group for the construction of a manufacturing site in the Bangkok Free Trade Zone. The site is designed to demonstrate Zapp's Gen-2 sustainable assembly and flexible manufacturing capabilities, with completion slated for early 2025.
The new facility will serve as a model for future Zapp manufacturing sites globally, aimed at regions with high sales growth potential. Each site is expected to have an annual production capacity of up to 20,000 units. The company has begun sales of its i300 model in Thailand and anticipates the new site will bolster both domestic sales and exports.
Swin Chatsuwan, CEO of Zapp EV, emphasized the importance of the site for scaling operations and the benefits of the direct-to-customer model, which is expected to reduce delivery times. AIH Group's CEO, Corrie Kotze, expressed confidence in the collaboration, citing AIH's experience with major automotive OEMs and the quality of Zapp's i300 design.
Zapp's i300 is a high-performance urban electric two-wheeler that offers motorcycle-level performance. The company plans a direct-to-customer experience, delivering vehicles to customers’ homes and providing at-home services.
The press release also contains forward-looking statements regarding the company's future plans and goals. These statements are based on current expectations and are subject to risks and uncertainties that could affect actual future results.
This news is based on a press release statement from Zapp Electric Vehicles Group Limited.
In other recent news, Zapp Electric Vehicles Group Limited has made significant strides in its operations. The company's i300 urban motorcycle has successfully secured approval for sales in Thailand and for use on public roads in the United Kingdom. These approvals mark a critical step for Zapp EV, allowing the company to begin customer deliveries in these key markets.
The company's entry into the Southeast Asian and UK markets aligns with its broader strategy to tap into the significant two-wheeler market globally. Zapp EV has also announced a partnership with Bounce Electric 1 Private Limited for the manufacturing of the i300 in India, aiming for a minimum capacity of 5,000 units per year.
In addition, Zapp's shareholders have approved a reverse stock split at a ratio of 1-for-20, reducing the number of ordinary shares from 500 million to 25 million. This move is expected to increase the nominal value of shares.
These recent developments indicate Zapp's commitment to redefine the electric two-wheeler segment and expand its global footprint. As the company looks ahead, it anticipates further commercial launches in other Southeast Asian countries, including Indonesia and Vietnam. However, these projections are subject to risks and uncertainties.
InvestingPro Insights
As Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP) moves forward with its manufacturing plans in Thailand, investors should consider some key financial metrics and insights from InvestingPro.
The company's market capitalization stands at a modest $11.34 million, reflecting its early stage in the competitive electric vehicle market. This relatively small size aligns with Zapp's focus on scaling operations through the new manufacturing site in Bangkok.
InvestingPro Tips highlight some challenges facing the company. Zapp is "quickly burning through cash" and "may have trouble making interest payments on debt." These factors could potentially impact the company's ability to fully capitalize on its expansion plans and the anticipated production capacity of up to 20,000 units annually at the new facility.
The stock's performance has been concerning, with InvestingPro data showing a -71.23% total return over the past three months and a -77.48% return over the past year. This trend underscores the importance of the new manufacturing site in potentially turning around investor sentiment and company fortunes.
Despite these challenges, analysts seem optimistic about Zapp's potential. The fair value based on analyst targets is $20, significantly higher than the current trading price of $2.69. This discrepancy suggests that if Zapp can successfully execute its manufacturing and sales strategies, there could be substantial upside potential.
It's worth noting that InvestingPro offers 13 additional tips for ZAPP, providing a more comprehensive analysis for investors interested in delving deeper into the company's prospects.
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