Ideanomics is Empowering the Electric Vehicle-Driven Economy

Ideanomics (NASDAQ:IDEX) reported Q2 revenue of $4.7 million and expects quarter-over-quarter growth in Q3 and Q4 2020

SmallCapPower | September 17, 2020: Tesla’s soaring stock price illustrates investors’ belief that the future of transportation is electric. But for those who think Elon Musk’s company is overvalued, or they missed the boat for the appreciation in the stock price over the past few years, then there are other options for investors who want to capitalize on the burgeoning EV industry. One company that looks interesting is Ideanomics (NASDAQ:IDEX).

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Ideanomics is not an electric vehicles manufacturer per se, although it does own a controlling interest in Malaysia-based Treeletrik. It is involved in commercial electric vehicle enablement – helping commercial fleet customers understand how to transition their vehicles, to get through the procurement process, the rebates process, the lease financing process, etc. Commercial vehicles include heavy- duty trucks, logistic vehicles, buses, taxis, etc.

The Company started in China because the county is regulatory driven, which provides confidence in deriving revenue because of regulatory deadlines, such as the electrification of all city buses by 2022.

China currently has an estimated 11 million heavy- duty trucks and off-road vehicles, 14 million delivery vehicles, 1.6 million city and tourist buses, 1.2 million taxis/ride-sharing vehicles, and more than 100,000 gas stations to be converted to charging stations.

Ideanomics hopes these commercial fleet customers continue to do business with them, so that IDEX can market these clients wholesale, pre-paid electricity or discounted access to Ideanomics’ preferred partner charging stations, which should provide a rewarding recurring revenue stream for the Company.

During a recent media interview, Ideanomics CEO Alf Poor describes ways in which IDEX makes money. This includes on the spreads between buying and selling of electric vehicles, in which the Company receives volume discounts; receiving a commission/finder’s fee on lease financing deals it places with leading lending institutions and, most importantly; a recurring revenue stream from the percentage of electricity sales to keep these vehicles running.

All that being said, having an influential local business partner is key to operating successfully in China and Ideanomics has one in Chinese-American entrepreneur Dr. Bruno Wu, who is also Chairman of Ideanomics and owns a 19% equity stake in the Company.  Dr. Bruno Wu’s wife, Yang Lan, is a high-profile Chinese media personality who is often referred to as the Oprah Winfrey of China.

Ideanomics recently reported Q2 revenue of $4.7 million, up from $378,000 in Q1, as China’s economy continues to recover from the COVID-19 lockdown.  The Company ended the quarter with US$36.4 million in cash, which it says could be used for acquisitions later this year.  IDEX called the second quarter its best mobile energy results since moving into electric vehicle sales. And Ideanomics expects quarter-over-quarter growth in Q3 and Q4 2020.

“We are very pleased with the pace of our sales growth in the new energy vehicle industry,” Ideanomics CEO Alf Poor said in a statement. “As the rate of global electric vehicle (EV) adoption continues to rise and technology advancements make EVs more accessible, our Sales to Financing to Charging (S2F2C) business model is positioned to add value for commercial fleet operators in all areas of their business.”

Finally, an important component of IDEX’s future growth should come from its majority ownership of Treeletrik, an approved electric vehicles manufacturer and distributor for Malaysia. Treeletrik expands the Company’s product line to electric vehicle mopeds, bikes cars, and light rail, serving the 650 million people in the ASEAN region which includes Malaysia, Cambodia, Vietnam, Philippines, Indonesia, Laos, Singapore, and Brunei. Treeletrik is expected to drive ASEAN commercial electric vehicle sales leveraging Chinese manufacturing advantages.

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