Vmoto Navigates 33% Sales Drop with Strategic JVs and Cash Flow Strength

Sales Performance and Market Challenges

Vmoto Limited (ASX: VMT), a global player in electric two-wheel vehicles, disclosed a challenging FY24 with total unit sales falling 33% to 17,038 units compared to FY23. The fourth quarter alone saw 3,801 units sold, down 18% year-on-year, with international sales declining 12% amid ongoing macroeconomic volatility, particularly in Europe.

Despite these headwinds, Vmoto demonstrated resilience by remaining operationally cash flow positive in 4Q24. The company attributes this to effective cost management and increased customer deposits, which helped sustain a robust cash position of A$41.5 million at year-end.

Strategic Joint Ventures and Investments

In a bid to diversify and strengthen its market presence, Vmoto entered into two significant joint ventures during the quarter. The first, GoRide Co, Ltd, is a partnership with Thailand’s Skipper Run Co, Ltd, where Vmoto holds a 30% stake. This venture targets the delivery, transportation, and logistics sectors with electric motorcycles and e-mobility solutions tailored for the Thai market.

Simultaneously, Vmoto forged a joint venture in Mexico with OMO Mobility S.A. de C.V., forming OMO Watts S.A. de C.V. Here, Vmoto holds a 20% interest, focusing on similar B2B electric mobility solutions for Latin America’s growing delivery and logistics sectors. Both ventures are in the pilot launch phase, signaling Vmoto’s strategic pivot towards B2B markets amid consumer sales softness.

Additionally, Vmoto invested SGD 1 million (~A$1.15 million) for a 12.5% stake in Singapore’s Evotion Labs Pte Ltd, an operator developing an EV bike ecosystem with battery swapping and charging infrastructure across Southeast Asia. This investment aligns with Vmoto’s vision to integrate its products into broader electric mobility ecosystems.

Product Innovation and Industry Recognition

Innovation remains a cornerstone of Vmoto’s strategy. The company’s APD model, an electric maxi scooter designed by Pininfarina, earned the Good Design Award 2024, underscoring Vmoto’s commitment to combining aerodynamic efficiency with ecological design. This accolade enhances Vmoto’s brand prestige in competitive international markets.

Vmoto also showcased its Electric Mobility Solution (EMS) at EICMA 2024 in Milan, a premier global motorcycle exhibition. The EMS integrates electric vehicles, battery swapping, fast charging stations, and smart software, positioning Vmoto as a comprehensive provider of B2B electric mobility solutions.

Financial Position and Outlook

Vmoto’s financial footing remains solid, supported by a drawn bank operating facility of approximately A$5.5 million to fund expanded production capacity in China. The company’s balance sheet strength and positive cash flow provide a buffer as it navigates a challenging sales environment.

Looking ahead, Vmoto is optimistic about the long-term prospects of electric motorcycles and scooters, particularly in B2B segments across Europe, the Middle East, and South America. The easing of interest rates by the Federal Reserve has improved distributor and consumer sentiment, offering some recovery signs. However, economic uncertainties persist, especially in consumer markets.

Vmoto’s strategic focus on joint ventures, product innovation, and expanding its electric mobility ecosystem aims to create competitive barriers and unlock new revenue streams. The company’s recent announcement to delist from the ASX, pending shareholder approval, reflects a shift towards reducing compliance costs and focusing management efforts on operational growth rather than public listing obligations.