As EV investors scrutinize the volatile market, the question "Will CENN stock go up?" frequently transpires. Current fluctuations in the Cenntro automotive stock price today reflect a market cautious about the company's ability to successfully sell electric vehicles (EVs).
Nasdaq-listed under the ticker NASDAQ:CENN, the company has shown both promise and pitfalls, making it a subject of varied price-prediction models. While some people believe that Cenntro Electric stock could rise due to its diverse EV portfolio and international patents, skeptics point out that it hasn't yet turned a profit.
What is Cenntro Electric Group?
Cenntro Electric Group Ltd (NASDAQ: CENN) is a commercial EV technology designer and manufacturer of electric light and medium-duty commercial vehicles.
Cenntro is dedicated to converting commercial fleets to zero-emission vehicles and creating a full range of zero-emission commercial vehicles using scalable, decentralized production and smart driving solutions powered by the Cenntro iChassis.
The company's electric commercial vehicles (ECVs) are designed to serve a variety of corporate and governmental organizations. Its business model allows the firm to design, manufacture, assemble, approve and sell to third parties for distribution and service to end-users and also distribute manufactured vehicle kits, which are then assembled, approved, sold and serviced by third parties in their respective markets.
Cenntro Electric Group Ltd. acts as a central hub, with a network of subsidiaries spanning from the United States to Europe and China. The firm operates through the following brands: Cenntro, Metro, Neibor, Logistar, and Terramak.
Cenntro Electric Group was founded on May 11, 2017, and is headquartered in Freehold, New Jersey. It was previously known as Cenntro Automotive Group. Cenntro Electric Group serves clients in the United States.
CENN Share Price Chart Analysis
If you wonder why the CENN share price chart looks like it dates back to 2012, it’s because the company went public in 2021 through a reverse merger with Naked Brand Group Ltd (NASDAQ: NAKD). Naked was an intimate apparel, and swimwear company boasting brands like Heidi Klum, Stella McCartney, and Frederick’s of Hollywood.
Before the Cenntro IPO, the share price chart refers to Naked Brand Group’s common stock, which was quoted on the OTCQB and NASDAQ as NAKD.
Naked Brands left investors with a bad taste after its meme stock status led to a plummeting share price, which led to the unlikely merger. (What is a meme stock?)
Cenntro Electric's Vehicle Portfolio
The company's EV range includes the Metro, Logistar 100 (LS 100), Logistar 200 (LS 200), Logistar 260 (LS 260), Logistar 300 (LS 300) and Logistar 400 (LS 400), plus the LM864H and TeeMak.
Cenntro Metro
Cenntro began trial production of its unique, street-legal Metro electric commercial vehicle in 2017. Designed for urban scenarios like intracity delivery, the company has produced over 3,300 Metros to date. The vehicle currently enjoys a market in Europe, the United States, Japan, Korea, Singapore, and Israel.
Logistar 100
The LS100 is a versatile, compact, light cargo van, purpose-built to serve diverse commercial applications, especially in urban areas with high population density.
Logistar 200
Logistar 200 serves as a versatile, light electric commercial vehicle ideal for urban goods transport. It boasts a one-ton payload and offers 247 cubic feet of cargo space when equipped with a cargo box. The vehicle accommodates three configurations: just the cab and Cenntro iChassis, or with an added cargo box or van. Each configuration utilizes the same Cenntro iChassis and front cab.
On August 10, 2023, the city of Novi Sad, Serbia, received a delivery of LS200 vehicles, with Serbian Mayor Milan Đurić and Zoran Đorđević, Acting Director of the Post of Serbia, in attendance. The Post of Serbia, the nation's largest logistics business, plans to deploy the LS200 fleet for city center deliveries by the end of August.
Logistar 260
The LS260 is a new addition to the Logistar series. This new vehicle will target various applications in the trades, couriers, express and parcel services, logistics solutions, and facility management segments.
The LS260 features an exterior of aluminum alloy frame and composite plastic panels to boost interior comfort and driving confidence. Its spacious cabin accommodates a mobile office to meet business requirements. Additionally, the vehicle offers ample cargo space and allows for the installation of racks and bins for secure, convenient storage of tools and equipment.
Cenntro Logistar 300
Cenntro's LS300 redefines the standards for electric commercial work trucks, offering 370 cubic feet of storage and a 3,307-pound payload to tackle various job-site demands, from parcel delivery to agriculture. With a 273-mile range and a top speed of 62 mph, the truck combines cutting-edge EV technology with a robust traditional chassis, delivering not only fuel savings but also reduced maintenance costs. The intention is that this results in fewer downtime days and a lower total cost of ownership.
Logistar 400
The LS400 is designed for urban delivery and services covering last-mile delivery and vocational fleets.
LM864H
With the LM864H Cenntro debuts its first hydrogen fuel cell-powered heavy-duty truck. Equipped with high-efficiency fuel cells, the truck transforms hydrogen into electric power, emitting only water as a byproduct.
The LM864H offers a range and refueling time similar to diesel trucks. This makes it ideal for long distances and high-energy tasks, especially in areas with limited battery charging options. The new truck expands Cenntro's zero-emission vehicle offerings, giving customers more sustainable choices.
TeeMak
TeeMak offers an all-electric, purpose-built off-road utility task vehicle (UTV) or side-by-side vehicle. Designed exclusively for off-road use, TeeMak meets the needs of farms, ranches, corporate campuses, warehouses, construction sites, as well as trailing and hunting activities.
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Centro Electric Performance To Date
Cenntro has delivered over 3,600 electric vehicles and traveled over 20 million miles. It has also been granted over 238 patents and certified in more than 32 countries. The company has shipped its vehicles to over 16 countries and has more than six assembly plants.
At the time of IPO, the company guided for at least 20,000 vehicle deliveries in 2022. That didn’t happen. It's delivered roughly 3,600 in total, ever. It's worth noting that this number sat at 3,300 at the end of 2021.
How Does Cenntro Electric Group Make Money?
Cenntro Electric Group makes money primarily by selling ECVs to its channel partners. Historically, these revenues were generated solely by the sale of the Metro®, but it recently began generating income from the sales of the Logistar™ 200 in Europe.
Net revenues have been generated from vehicle sales, sales of ECV spare parts related to its Metro® vehicles, and the sale of ECV batteries to certain customers, plus charges on services provided to channel partners for technical developments and assistance with vehicle homologation (approval) or certification.
However, Cenntro is not profitable, and its net loss of -$110.09m in 2022 has dramatically widened from a -$16.42m loss in 2021.
CENN Stock Performance
Since IPO, CENN stock is down by -95%, while the S&P 500 is down -7.5% over the same period.
Cenntro Electric Group does not offer a shareholder dividend (what is a dividend?).
On July 28, 2023, Cenntro Electric Group Limited announced that it regained compliance with a key Nasdaq rule. It did this by filing its 2022 annual report and its Q1 2023 report with the SEC. Nasdaq confirmed Cenntro now meets the rule's requirements.
Q2 2023 Financial and Operating Highlights
Net revenue of $4.2m (up 32% Y/Y)
Sales volume increased by 26% Y/Y and 82% sequentially Q/Q to 235 vehicles.
Average selling price increased 11% Y/Y to approximately $18,600.
Adjusted EBITDA for the quarter is a loss of -$12.5m compared to a loss of -$12.2m for Q2 2022.
Entered collaboration agreement with EAVX, a JB Poindexter & Co Inc. Business Unit, to develop innovative and industry-leading All-Electric last mile and vocational work truck solutions.
Achieved certification by the California Air Resources Board for the LS400 and the Metro®, allowing the vehicle to be considered for monetary incentives including the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project
Cenntro was recognized as a Clean Vehicle Manufacturer by the U.S. Internal Revenue Service which will allow Cenntro vehicles to be eligible for vehicle tax credits of up to $40,000 under Internal Revenue Code (IRC) 45W.
Announced a new assembly plant in Ontario, California, scheduled to be operational in the third quarter of 2023, to position the company for future sales on West Coast, the leading market for EV adoption.
Opened sales in the Central American and Caribbean markets with the Logistar® 100 and Logistar® 260.
In the second quarter of 2023, Cenntro saw increased sales momentum and expanded distribution. The company gained two key certifications: one from the U.S. Internal Revenue Service as a Commercial Clean Vehicle Manufacturer and another from the California Air Resources Board for its LS400 and Metro vehicles. These certifications make Cenntro eligible for various U.S. incentive programs, making its electric commercial vehicles (ECVs) more cost-effective.
Cenntro continues to grow, even amid economic uncertainty and supply chain challenges. The company formed a strategic partnership with EAVX to integrate commercial truck bodies with Cenntro's all-electric chassis. Additionally, a new assembly facility in California joins existing plants in Florida and New Jersey, positioning Cenntro for market expansion. The company aims to capture more market share with a diversified vehicle lineup and expanded distribution network.
As of June 2023, the company held about $60.4 million in cash and cash equivalents.
First Half 2022
Net Revenue: $5m (up 105% Y/Y)
Number of Vehicles Sold: 337 units (up 23% Y/Y)
Cash and Equivalents: $183m (up from $2m Y/Y)
Net Loss: -$23.05m (risen from -$4.5m Y/Y)
Peter Wang, CEO of Cenntro, said:
During the first half of 2022, we continued to execute on our strategic initiatives and grow our topline despite a challenging macroeconomic environment.
We sold 132 units of our newly launched Logistar 200 (the “LS 200”) model, which doubled our average selling price. This demonstrates our capabilities for executing our tiered product strategy while addressing various customer demands amidst global uncertainty,
Wang went on to list recent progress, including Cenntro's introduction of three new EV products, the Logistar 100 (LS 100), Logistar 260 (LS 260) for the European market and Logistar 400 (LS 400) for the North American market.
We have already begun receiving pre-orders for these new products. These new vehicles come with higher price points and will continue to improve our product mix.
To deal with rising battery costs and ongoing supply chain issues, Cenntro created Cennatic Power Inc. to make advanced lithium-ion batteries for their electric commercial vehicles (ECVs). They hope that having their own production and the manufacturing unit will help them ensure a steady supply of batteries and eventually allow them to speed up the development of ECVs, reduce their reliance on China for supplies, and lower the cost of battery cells.
The company has also started new vehicle assembly in the US and Europe and built its EV distribution and services infrastructure.
Cenntro Electric Group Growth Potential
The company hopes its recent initiatives will help accelerate its growth strategy. It believes this expanded product line-up and leading technology will position it well to capture tremendous growth opportunities in transforming the global commercial fleet industry to zero-emission vehicles.
Edmond Cheng, Chief Financial Officer, added,
Increased vehicle sales and improved product mix helped us achieve 105% year-over-year revenue growth for the first six months of 2022. These results reflect our continuous investment in product development and partnership with the right OEMs to enhance our product offerings to meet market demand.
We have also stepped up our investment in sales and marketing, infrastructure, and research & development to support our growth objectives. However, in light of the uncertain macroeconomic environment, we will remain cautious in managing our expenditures and working capital in order to preserve a strong balance sheet.
The company believes scaling will improve profit margins in the long term. The company expects its cost of materials and parts, including battery packs, to decrease as its vehicle production volume increases. This should reduce the average cost per vehicle with time.
CENN Stock Risks
In the short term, specific components and materials may increase in price due to shortages of battery packs, semiconductors and other input parts.
Supply chain shortages have hit Cenntro's production capabilities. Thus, its operating results in the first half of 2022 have been significantly impacted by the scarcity, and the company expects this will continue.
The price of battery packs has increased and may continue to grow in the near term due to the rising cost of lithium because of COVID-19 and other factors.
A prolonged economic downturn could reduce demand for last-mile delivery. This could have a knock-on effect in reducing the need for Cenntro's ECVs.
Competition is rife in the EV space, and only the strongest will survive.
The company plans to ramp up spending to meet its growth strategy.
CENN Buy or Sell?
The debate on whether CENN is a buy or sell continues to divide investors. Many are watching Cenntro Electric Group stock for signs of resilience amid supply chain issues, rising costs, and general economic gloom.
As for a Cenntro Electric Group price prediction, it's a mixed bag. Factors like the potential growth of the EV market, fluctuating costs of battery metals, Cenntro's own scalability, and the global economic climate all play a role. Therefore, whether to buy or sell Cenntro Electric Group stock remains a decision fraught with both opportunity and risk.
Is CENN Stock a Good Investment?
Cenntro stock is one of many EV companies operating in a tight space. It currently has a customer base, multiple patents, and as of August 2023, it has an $84m market cap, down from $368m in August 2022.
However, it is hard to take the company seriously when it went public via a lingerie company.
All-in-all, CENN stock is a highly speculative and risky investment. Therefore investors should be vigilant.
