* The content of this post is opinion only. It is not advice, it may be incorrect and the comments made are not directed to anyone in particular. It is not a comprehensive analysis etcetera*I find the whole share-price-manipulation-bigbuyer-treeshaking-charting-nonsense as dull and boring as it is obvious. So here is some food for thought.When I speak of underperformance, I am referring to the operating performance. I leave the commentary on the share price performance to the charlatans (Or was it chartists?)Some here have been commenting on the under performance of EV bikes sales compared to the ICE bikes market in general, and the lack of EV bikes adoption (market share growth) in particular. This is true, hence the greater volatility in VMT performance.But, comparing VMT (the EV bikes) to the general bikes market is not entirely correct and it doesn't offer any useful insight as to why the underperformance has occurred.The wars and inflation only explain, partially, why the demand for bikes in general has not been great, but it doesn't tell us why VMT and other EV companies have been hit much harder.It also doesn't provide any explanation as to why VMT is still so reliant on B2B (which is also a major reason of the VMT underperformance) and why VMT has been able to grow mainly (only?) It's B2B segment, while it's B2C segment hasn't been able to gain much traction, so far.Could it be because VMT bikes are not very desirable by the B2C market? Yes it could be, but I think it has more to do with the overall range offering, by VMT and the EV manufacturers, than the actual appeal of the models being currently offered.The bikes industry can be broken down in two ways. By power (cc equivalent):50,125, 250-350, 500-600, 1000+ccAnd by type:Scooters, maxiscooters, small city bikes, dirt bikes, naked bikes, sports bikes, enduro, touring and grand touring bikes, choppers (e.g. Harleys), three wheelers, race bikes.Whichever way you pick it is obvious that VMT is only competing in a couple of these, which also happen to be the most competitive and perhaps the least profitable. Certainly the ones with the lowest price tag, which means least revenue per unit etcetera.It is important to understand that a factory with a capacity of 150k units selling scooters can only generate so much revenue. However the same factory selling medium size bikes (500-600cc), whilst somewhat reducing capacity, can generate much more revenue (3x?). A Scooter is sold at max $5k, a bike of that category sells for $15k+. Same factory, pretty much same fixed costs and staff, but 3x revenue. It's not news, car manufacturers push you to GO BIG because selling you a Ford ranger you don't need at 80 grand is better factory utilisation than selling you a i30 at 25 grand.So, back to our point, VMT performance should be compared to the performance of the industry in the categories VMT services. Has VMT being gaining market share in the 50 and 125cc categories? Or in the scooters and teenager's bike category?By looking at things this way, it is easy to understand why VMT has not gained meaningful market share, compared to the general bikes market. It is competing with a handicap compared to the ICE manufactures.As it's been said before, apart from teenagers (in Europe 14 years old can drive 50cc and 125cc from 16 years old) and most do, not very many adults are interested in those two categories, certainly not the majority, hence the reliance on B2B.So, to judge the company's management properly, we should be looking at what is it doing to address this handicap.The Power constraints are obvious, battery technology is not something VMT can do much about, they do not manufacture batteries. We are told the technology should allow for EV bikes of power equivalent to 500cc capacity in cy25 cy26.So the EV industry is catching up. Good news.In an interview last year Milone talked about this very point in details, so the company is alive on this and the product offering expansion is clearly part of the strategy. This is why the company needs extra capacity. The product range expansion alone (be it by cc equivalent or type of bike, or both) will require extra space irrespective of general demand.So, growth levers to gaing market share are a few. Mainly though, it will be by expanding the type and power offering in order to target a wider, more profitable share of the total market. This will mean not only more units produced, which means higher efficiencies, it also means higher sales. This will mean that operating expenses will grow much less than sales, and if the cost of goods sold stays at similar level due to the bigger bikes being more complex with a few more components and mass, the bottom line should swell. More bang for your buck.This is of course business 101 nothing new, and that's exactly the point. Most of the times you need to cut through the bullshit and go back to basics. VMT is a business, not a share price. Charts are good to feed your ego, they tell you nothing about the business and what's actually doing, how it makes money, how it can improve etcetera. Follow the company and what it is doing and saying. Not the charlatans. Charles may be very knowledgeable about running factories, but he is no good CEO (he doesn't pretend to be), he knows his environment and it seem to be humble enough to admit his limitations. He is not the best person in the room when it comes to go out there selling the dream. He has hired Milone. That is testament to his determination. Whatever it takes.
P.S. Competing on price is stupid and the idea put forward that you should spend millions on fully automated lines to compete in a very low margin market is nonsensical. It is probably best to read the company's report in order to understand their plan of attack instead of fantasising on the wrong competitors.
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