Phase Two of the $700B electric vehicle boom—the electric boat rush—is becoming just as crowded as its four-wheeled predecessor, with so many start-ups dotting this landscape it’s dizzying.
Loads of debt, problems getting into production, far-off delivery dates that make revenues a thing of the distant future—if at all—and failures-to-deliver all make this a minefield for investors.
Vision Marine Technologies (VMAR)(NASDAQ:VMAR) has a first-mover advantage here, the best electric boat motor system on the market and a solid manufacturing and distribution strategy that recognizes the decentralized nature of this emerging market.
Not only has Vision Marine partnered with the top boat manufacturers and distributors in the industry, but it has also just delivered their first proprietary E-Motion Electric powertrains to Groupe Beneteau Four Winns.
While a litany of electric boat startups trying to storm this scene without any real production or distribution strategy, VMAR is many steps ahead as the world strives to bring the electric revolution to the waterways.
… And it’s won the trust of a giant, iconic boat-builder.
Finally, Concrete Action on the Electric Boat Motor Scene
Vision Marine’s partnership with Groupe Beneteau is game-changing for a small company in this fast-emerging space.
Groupe Beneteau has been building boats and transforming the boating experience since the late 1800s. It has built a billion-dollar global boat brand house. In 2022, the company reported revenues of 1.5 billion euros.
Employing 8,000 people in France, the U.S., Poland, Italy, and Portugal, Groupe Beneteau is a global market leader with nine brands in its boat divisions and more than 150 recreational boat models, from sailboats and motorboats to monohulls and catamarans. It’s also a powerhouse in boat rentals. Since the 1800s, it’s even gone way beyond boats and much deeper into the leisure segment, serving as a major European player for leisure homes and lodges.
Four Winns is one of Groupe Beneteau’s iconic boat brands, along with Beneteau, Jeanneau, Lagoon, Delphia, Excess, Wellcraft, Scarab and Glastron.
That’s a huge lineup and suggests an incredible amount of potential for Vision Marine’s partnership in the future.
On October 4th, Vision Marine announced that it had delivered, as promised, its first E-Motion™ Electric Powertrain Technology to Groupe Beneteau, Four Winns at their production facility in Michigan. VMAR’s (NASDAQ:VMAR) Power Trains will be the inaugural electrical motors integrated on the Four Winns H2e Bowrider.
Thanks to Vision Marine, Four Winns’ H2e Bowrider is the world’s most powerful outboard electric powertrain, with a 180E electric outboard engine delivering high peak power with rapid acceleration and top speed of approximately 35 knots (40mph). It’s also the first, all-electric, series production bowrider on the market.
“Just imagine jumping aboard your H2e, fully-charged and ready to go, from your trailer or private dock. No noise, no exhaust, no refueling, no hassle … just a rewarding day on the water,” Nick Harvey, Four Winns Brand Director said in a statement posted on the company’s website.
This delivery is a major milestone not only for Vision Marine, but for the entire global electric boat industry, and the delivery itself is being undertaken with a fair amount of pomp and circumstance.
The H2e Bowriders, newly equipped with Vision Marine E-Motion motors, will embark on a voyage to Europe where they will first be showcased at the Dusseldorf boat show in late January, where their presentation is set to “underscore the dawn of a new era in eco-friendly marine transport”.
Dusseldorf is a hotspot for unveiling breakthroughs in the boating world, and the showcasing of the H2e Bowrider is intended to advertise the new boat itself—a first in the electric world—and Vision’s Marine’s innovative technology. From there, the boats will make their way to their ultimate owners.
These will be the first electric boats to come off Four Winn’s’ production line for consumer ownership.
How VMAR’s E-Motion Is Defining This Space
The E-Motion™ powertrain technology is the fastest electric speedboat in its class on the market. Not only is it the first fully electric, production-ready recreational boat in its class on the market, but it’s also a high-performance machine with 180 horsepower. It’s turn-key, disruptive and powered by Vision Marine’s proprietary E Motion™ battery and software.
Capable of fully charging overnight on 120v-20A or 240v 50A shore power, no supercharger needed , the E- Motion™ battery also has another clear advantage: It’s cheaper than its competitors.
Actually producing and getting products to market in the EV space has been the biggest problem facing startups both on the road and in the water.
Vision Marine(NASDAQ:VMAR) has an entirely different strategy that focuses on one key fact: Boatbuilding is a decentralized affair. A builder typically buys the outboard motor from one supplier, the throttle from another, and the gauges and console systems from a third.
VMAR isn’t trying to be everything to everyone.
Having established back-to-back world speed records in electric boating, VMAR’s E-Motion™ Electric Powertrain should top the list for any builders looking for a best-in-class electric motor.
This is what other startups in the space lack. They may be raising significant amounts of cash right now, but it’s based on hopes of future production. VMAR is already producing. It’s already delivering, and it’s secured a game-changing partnership with a major global boat-maker.
The Small-Cap Market Opportunity Amid Historical Disconnect
The electric boats and ship market size is expected to witness rapid growth over the next six years, with revenues set to hit nearly $11 billion, driven by environmental concerns and technological advancements, according to Fairfield Market Research.
At the same time, the markets have been disproportionately unkind to micro- and small-caps this year relative to large-caps. In fact, there hasn’t been a greater disconnect between small and micro-cap and large-cap stocks in nearly in two decades:
Because this disconnect is at a historic level, it creates a great opportunity for bargain hunting in the small-cap and micro-cap world.
In a weak venture capital market, and despite the disconnect between small- and large-cap stocks this year, electric boat start-ups have raised a lot of capital over the past six months, suggesting growing interest in the market:
- Sweden’s Candela electric boat-maker raised some $20 million this spring
- Sweden’s X Shore raised around $28.5 million in the same period
- Florida-based Blue Innovations Group, an electric boat start-up founded by former Tesla manufacturing chief John Vo, started accepting reservations in March
- Rhode Island-based Flux Marine electric outboard motor manufacturer raised $15.5 million in 2022
- Middle East-based Crow Electric Ships and Boats latest investment valued it at $55 million in July; and
- In September, LA-based EV boat start-up ARC raised $70 million Series B.
But finding the opportunity amid this disconnect is even better when it’s a small or micro-cap that is defining a specific industry niche, such as the electric boat startup segment. And in this particular segment, Vision Marine is a clear leader, with Fairfield Market Research highlighting VMAR as one of the key players in the $11-billion revenue push.
This could be why Roth Capital recently initiated coverage of Vision Marine, with a C$6 share price.
“We believe Vision is working with multiple other boat OEMs and expect additional purchase orders and supplier agreements to lift visibility,” Roth said in June. “Further news around this area should serve as a positive valuation catalyst.”
Roth expects Vision Marine’s E-Motion to “drive impressive growth supplementing momentum in existing operations”, including its electric boat rental segment, whose flagship Newport operation took in $4 million in revenue in 2022 at 35% margin, with more locations on the way, plus a major franchise scale-up.
Roth also expects the news flow around the launch of the E-Motion and new customer visibility to serve as primary valuation catalysts. But that was back in June. That news flow push gained major momentum in early October with the production and delivery of VMAR’s first E-Motion units to the giant Groupe Beneteau.
While investors may be experiencing fatigue from the EV industry’s cash burn and frequent failure to produce and deliver, Vision Marine is already producing, with a unique strategy that capitalizes on the decentralization of the boat-building industry.
With just a $20M market cap in a sea of pre-revenue startups garnering 9-figure valuations, Vision Marine separates itself as the Company offering the fastest and most innovative electric motors to the world’s largest boat manufacturers. Securing Groupe Beneteau is just the beginning…
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