Kandi Technologies Group Inc (NASDAQ:KNDI) has finally broken out of its perpetual $4 to $6 range of 2018. The stock is flying after its Model EX3 and Model K22 were approved by the NHTSA to be imported and registered in the U.S. The company said the NHTSA approval is an assurance that its two EV models conform to NHTSA standards and are registered in the U.S. Kandi’s joint venture will immediately begin the process of launching the Model EX 3 and Model K22 for the American market.
Shares of KNDI made a big jump on the news, hitting $8.85 on Wednesday’s session. While recent bulls are excited, the stock is still down from over $20 back in 2015.
First up, a little background info for those that are not familiar with KNDI. Kandi Technologies Group, Inc., headquartered in Jinhua Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”), SC Autosports, LLC, the wholly-owned subsidiary of Kandi Vehicles, and Kandi Electric Vehicles Group Co., Ltd. Kandi Vehicles has established itself as one of China’s leading manufacturers of pure electric vehicle parts and off-road vehicles.
In 2013, Kandi Vehicles and Geely Group, China’s leading automaker, jointly invested in the establishment of the JV Company in order to develop, manufacture and sell pure electric vehicle (“EV”) products. As of 2018, each party has invested RMB 1.045 billion in the JV Company, for a total investment of RMB 2.09 billion with each party holding a 50% stake in the JV Company. The JV Company has established itself as one of the driving forces in the development and the manufacturing of pure EV products in China.
KNDI Executing Its Business Plan
Getting U.S. approval is a big step for Kandi and shows that the company is executing its business plan. Mr. Hu Xiaoming, Chairman and Chief Executive Officer Mr. Hu Xiaoming said:
“We are thrilled Kandi Model EX3 and Model K22 received approval from the NHTSA. The approval has demonstrated our EV models meet all the necessary requirements and standards of the U.S. government. With this, we are confident in introducing our reliable vehicles to the American public. We believe both the EX3 and K22 are competitive in price and quality with advanced tech features that are in demand by American consumers. We are confident that SC Autosports, our U.S. subsidiary, will have a successful launch and grow the EV market in addition to its Powersports business.”
TSLA’s problems Are KNDI’s Opportunity
Now we aren’t going to get into too much of the problems at Tesla, but every day there is something new happening or going wrong. For an up-to-the-minute play-by-play, we recommend following $TSLAQ on Twitter. There’s no doubt Elon Musk is a genius, but even geniuses succumb to burnout. In Musk’s case, the burnout revolves all those that work near and for him. The cycle and drama playing out at Tesla has never occurred at well-run companies like Microsoft, Google, Amazon, Oracle, and many, many others. For a company to be successful, it needs to have a team working towards one singular vision. Right now, the only vision is Musk’s and what if something happens to him? There’s no one to pick up the pace. Add in the fact that Porsche and BMW are coming with their own line of first-class EVs makes holding TSLA a risky proposition in our opinion at $300 a share.
For an investor looking to bank on the EV craze, KNDI looks to be the best bet. It’s priced right and can easily become a multi-bagger if management keeps executing. KNDI should certainly be on the radar screen.
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Disclosure: We have no position in KNDI or TSLA and have not been compensated for this article.
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