Volcon reports Q2 ’23 results
Volcon Inc. has reported its operational highlights and financial results for the second quarter of 2023.
As of June 30, 2023, Volcon has 142 dealers, and it has taken delivery of eight Stag validation units in 2023 that include custom suspension and GM propulsion components.
The company expects to launch the Stag to dealers in Q4 of this year. And it has taken preorders of more than $115 million of expected revenue for the Stag (if all orders are fulfilled). On the two-wheel front, the Grunt EVO is expected to launch in Q3 and the Runt LT is expected in Q4.
Volcon says it has made significant progress on the development of the Stag and has put thousands of miles of testing on the validation units received thus far. CEO Jordan Davis notes, “Over the past quarter, we have conducted rigorous testing of the Stag and have learned a lot from the results. We have gone through dozens of testing iterations, having identified the weak points so common in off-road vehicle design, and have improved the safety, reliability, and durability of our parts and sub-assemblies. So much so that, to a great extent, many of our components and assemblies are automotive grade, as the power and torque the Stag produces via its electric drivetrain have been too much for standard UTV parts. While testing has delayed the expected third quarter launch of the Stag, we remain confident that deliveries of the Stag will begin in the fourth quarter of 2023.”
Pre-orders and interest for the Stag from dealers and consumers continue to be strong, and Volcon continued to take waitlist orders from interested dealers and end users alike during the second quarter of 2023.
Volcon’s third-party manufacturer has shifted factories for the assembly of the Grunt EVO, Runt LT, and Stag. The company will now build them in its Puebla, Mexico facility rather than at Electrameccanica Motor Vehicles’ facility in Mesa, Arizona.
Davis comments, “Although having final assembly of our products in Mexico is a significant change from our third-party’s original plans, this does not result in a significant increase in the cost of these vehicles to our customers. We support the decision our partner made to move production to Mexico, as this provides for additional control of vertically integrated processes, additional manufacturing stability, as well as accretive margin in that we will not be paying another party to use their facility or labor. This also provides distribution efficiency for our Latin American and South American partners.”
Production of the Grunt EVO has already begun as of this press release, according to Volcon. And the company expects delivery of the vehicle to customers in August. Due to supply chain shortages of certain parts, Volcon expects the Runt LT to launch in Q4.
Volcon’s revenue in Q2 was $0.5 million, a decrease of $0.7 million over the first quarter of 2023. The decrease over the first quarter of 2023 was partially due to a decrease in Grunts sold in the second quarter of 2023 (none) compared to the first quarter of 2023, as the Grunt EVO launch was delayed due to part shortages and a decrease in Brats sold in the second quarter of 2023 compared to the first quarter of 2023, primarily due to US dealers and LATAM distributor initial orders being fulfilled in the first quarter of 2023 and reorders did not occur in the second quarter of 2023.
A net loss of $23 million was reported for the Q2 compared to a net loss of $7.3 million for the first quarter of 2023 and $7.8 million for the fourth quarter of 2022. The Q2 net loss includes a loss on extinguishment convertible notes of $22.3 million for the convertible notes issued in August 2022 for notes issued in May 2023. An exchange of convertible notes for the August 2022 notes was partially offset by a gain on derivative liabilities of $5.8 million. These are more fully described in the company’s interim financial statements for the three and six-month period ended June 30, 2023.
