Aemetis Inc (NASDAQ: AMTX) is headed up in the market this morning, trading on compelling gains after the company announced that it entered into an electric car partnership. This, as the eCar market goes wild following Apple’s announcement that it will be launching its own eCar.
Here’s what’s going on:
Skip to What You Want to Read
- Aemetis Enters the Electric Vehicle Market
- Management Commentary
- Why Investors Are So Excited
- What Analysts Think About AMTX Stock
- Risks to Consider Before Buying AMTX Stock
Aemetis Enters the Electric Vehicle Market
In the press release, Aemetis announced that it has acquired about 20% ownership of Nevo Motors as part of a Strategic Electric Vehicle Production Facilities Agreement. Under the agreement, Nevo will use manufacturing facilities and fueling stations owned by AMTX, as well as the renewable natural gas and renewable electricity produced by the company.
Nevo, a company whose name stands for “New Electric Vehicle Optimization,” is a stealth mode company with products planned for launch in the first quarter of 2021.
AMTX went on to explain that Nevo Motors designs High Capacity Electric Vehicles for heavy cargo and long range. This is done using on-board range extender generators powered by renewable natural gas.
Moreover, the company’s electric truck models are designed to use patented hydrogen and ethanol range extenders. Ultimately, the goal is to reduce operating and maintenance costs wh
extenders. The goal is to achieve major reductions in operating and maintenance costs while also eliminating carbon and pollution emissions in highway cargo transport vehicles.
AMTX said that the first truck in the Nevo product line is scheduled for production in 2021. While we await the launch of the vehicle, Aemetis continues to expand its ability to produce renewable natural gas.
In a statement, Eric McAfee, Chairman and CEO at AMTX, had the following to offer:
Aemetis is excited to become a significant shareholder of Nevo Motors just prior to the launch of the Nevo truck product lines planned in 2021. This strategic agreement utilizes the production buildings, onsite railroad, renewable electricity substation and other facilities at the 140-acre, 710,000 square foot Aemetis Riverbank, California manufacturing facility, as well as other Aemetis infrastructure, renewable energy products, and expertise in renewable fuel credits and markets.
By far, the highest and best use of renewable natural gas is to displace diesel in transportation, which means that Aemetis RNG can be used to power long haul and delivery trucks to maximize the financial results of our RNG projects. RNG can directly fuel natural gas vehicles or convert RNG to electricity which can charge the batteries in electric trucks. Aemetis currently produces renewable ethanol which can be utilized by hybrid ZEV’s, creating additional value for Aemetis by selling ethanol directly to truck fleets and truck stops without blending into gasoline.
The above statement was followed up by Michael Peterson, CEO at Nevo Motors. Here’s what he had to say:
Nevo Motors plans to replace diesel engines in the $90 billion per year trucking industry with hybrid electric systems that combine electric drivetrains, batteries and patented range extender generators. Long haul and other diesel trucks can be powered by low carbon, lower cost, domestically produced renewable natural gas and biofuels that expand local investment and jobs instead of continuing to export investment capital to other countries to purchase imported petroleum.
Why Investors Are So Excited
The news out of AMTX this morning proved to be overwhelmingly positive. Investors were already excited about the company’s technology and its ability to produce renewable natural gas. Now, after today’s news, the investment takes a major step forward.
Aemetis isn’t just a renewable, green energy play anymore. Instead, with today’s announcement, the stock becomes an electric vehicle play.
At the moment, electric vehicles are the next hot thing. All major tech companies are getting involved. In fact, Apple put a major spotlight on the industry yesterday after announcing that it was planning on producing an eCar of its own.
Many suggest that these will be the vehicles of the future, and the future in green energy is much closer than you may think thanks to Joe Biden’s recent win of the United States Presidential Election.
Now, Aemetis is entering into this market.
That’s major news for the company and its investors.
What Analysts Think About AMTX Stock
According to TipRanks, there’s only one analyst currently covering AMTX stock. While coverage is light, the one analyst covering the stock has an overwhelmingly positive opinion.
In fact, the analyst rates the stock a Buy with a price target of $10. That price target represents the potential for dramatic growth ahead.
Due to potential conflicts of interest, it’s never a good idea to blindly follow the opinions of analysts. Nonetheless, it is a good idea to use analyst opinions as a source of validation for your own as you make investment decisions.
Considering that, if you were thinking about buying AMTX stock, the analyst that covers it is behind you!
Risks to Consider Before Buying AMTX Stock
If you’re going to invest, you’re going to accept risk, it’s just part of the process. An investment in Aemetis stock is no different. Before risking your hard earned cash, you should consider the following:
- Penny Stock Risks. AMTX is a penny stock, and as a penny stock, comes with important risks to consider. As with most in the category, the company has a relatively unproven business model, which hasn’t taken off in the overall market. Moreover, the stock is known for heavy volatility, making it hard to time entrances and exits.
- The Company Isn’t Making Money. Aemetis does generate revenue through the sale of its products, but it spends far more money than it makes. This leads to capital risks. If the company can’t afford to stay afloat until it reaches profitability, it may sell newly issued shares to raise funds, diluting the value of shares held by existing shareholders.
- Speculative. This early in the game, an investment in AMTX is a very speculative play. Sure, clean energy and clean transportation are exciting, but as mentioned above, the company hasn’t yet proven its ability to turn a profit in these areas.
While there are significant risks to consider before investing in a stock at the stage of Aemetis, there are also significant potential gains ahead. If everything continues to go in the right direction for the company, it will become one of the cornerstones in the evolution away from fossil fuels and toward clean energy.
Moreover, with the announcement today, ownership in AMTX stock means that you also have exposure to the wildly popular electric vehicles market, which many believe will be the transportation of the future. All in all, the stock is one that’s hard to ignore.