Electric snowmobiles and personal watercraft | Taiga needs money to grow

Growth has come at a price for Quebec’s fledgling Taiga Motor Corporation, which continues to draw on its reserves and seek additional financing to have the funds to build more electric snowmobiles and personal watercraft.

Posted at 2:06 p.m
Updated at 4:02 p.m

Julian Arsenal

Julian Arsenal
The press

Without disclosing the desired amount, the company on Monday confirmed its efforts and presented its results for the second quarter ended June 30, in which it was in the red despite growing sales.

“It is certain that not receiving the funding may have consequences, but for now I am pleased with the progress we have made so far,” zu explained The press Eric Bussières, Taiga’s Chief Financial Officer, with President and CEO Samuel Bruneau during a phone interview.

Following the update and quarterly results, the company’s stock fell 5.4%, or $0.28, on the Toronto Stock Exchange to close at $4.88.


Since it is not in debt, the manufacturer of electric recreational vehicles favors the option of a line of credit. Could there be a share offering that would have a dilutive effect on shareholders? A chief financial officer “never answers no to these types of questions,” Mr. Bussières said when questioned.

crucial year

It’s been a busy year for Taiga, which was founded in 2015 and assembles its products at its facility in the LaSalle neighborhood of Montreal. The company shipped its first snowmobiles last March and did the same for personal watercraft last month. It anticipates a major manufacturing facility project worth 125 million on the Shawinigan side.

Taiga burns between 15 and 20 million per quarter and had 52 million in the bank at the end of the second quarter. It will be able to receive 50 million in loans from Investissement Québec (30 million), the federal government (10 million), and Shawinigan (10 million) for its new complex.


PHOTO BY FÉLIX RIOUX PROVIDED BY TAIGA MOTORS

In addition to private watercraft, Taiga builds electric snowmobiles.

“Your current financial resources will not be sufficient to meet your spending over the next 12 months,” National Bank Financial’s Cameron Doerksen said in a statement. The company is looking for a line of credit, but there is a risk that more capital will be needed. »

Nevertheless, the analyst expects Taiga to be able to raise the necessary sums.

Late Deliveries

As with almost all manufacturing companies, disruptions in the supply chain are a headache for Taiga. With “a little” delay in watercraft deliveries due to “essential components” not being delivered as expected, production is being pushed back through the fourth quarter, which begins in October. The first units were delivered last July.

“The challenges are more with plastic components and other parts,” said Mr. Bruneau. We are seeing longer delays from our suppliers. We had already made significant efforts to secure everything that revolved around electronic modules and chips. »

As of June 30, Taiga had registered 3,054 pre-orders, a 30% increase from December 31. It shipped 21 snowmobiles in the second quarter for a total of 28 units since the beginning of the year.

In the second quarter, Taiga lost 11.1 million, or 35 cents a share, compared to 4.5 million, or $2.99 ​​a share, in the corresponding period last year. His sales were around $400,000. A year ago, Taiga had had no income. Mr. Doerksen expected the company to post sales of $368,000.

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  • 3500
    Taiga expects to make between 2,500 and 3,500 deliveries over the next year by ramping up its production.

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