Ideanomics Inc (NASDAQ: IDEX) is screaming for the top in the market this morning, but with no news out, it’s becoming a real head-scratcher for investors. Nonetheless, the gains seem to relate to excitement surrounding the electric vehicles market and the fact that the company is carving a niche. Here’s what you need to know:
What Is Ideanomics?
Ideanomics has two core business segments including:
- Electric Vehicles. The company is focused on electric vehicles, but not exactly the types of vehicles you would expect. It’s not interested in creating sedans and trucks. Instead, it’s interested in creating tractors under the Solectrac brand, as well as electric motorcycles. These are key niches in the electric vehicles industry that, until IDEX stepped in, were empty holes.
- Green Fintech. The company is also a strong player in the fintech market. However, keeping with the go-green movement the company has been centered around, it is working to bring scalability and environmental friendliness to the industry.
What’s So Exciting About Ideanomics?
For me, the most important value proposition brought to the table has to do with the company’s activities in the electric vehicle market. This is for multiple reasons, most notably:
- EV Market Growth. The electric vehicle market is growing rapidly, and IDEX seems to be in a compelling position to take advantage of that growth.
- Focus On Three Key EV Areas. Ultimately, Ideanomics isn’t just focused on the creation of electric vehicles within its niche. In fact, it’s tackling the three pillars of the electric vehicle industry, including vehicles, charging, and energy.
- A Niche. While most electric vehicle companies are focusing on the development of cars and trucks, Ideanomics has been working to carve a niche out in areas that haven’t quite been addressed. Tractors and motorcycles have the potential to run on battery power as well, and the company is filling that niche well.
It’s also worth mentioning that the company is working to consolidate a highly fragmented market, then use the synergies between its subsidiaries to achieve success. That’s an incredible plan and is evidenced by recent news.
For example, the company’s subsidiary in Malaysia, Treelectric, received a purchase order from an Indonesian bike distributor for 10,000 units. Ideanomics will fulfill the order directly, driving revenue in the company.
Not to mention, the company recently made an investment in electric motorcycles through its Energica subsidiary, ultimately introducing battery and charging technology to its portfolio on the EV side of the coin. There’s a strong chance that Treelectric will apply this technology within its products, ultimately driving revenues, which some suggest will take place as early as the second half of this year.
So essentially, not only is the IDEX carving out a niche in the electric vehicles space, it’s creating synergies within its own portfolio of subsidiaries to cater to that niche.
EV Popularity Will Continue To Rise
The fact of the matter is that electric vehicles aren’t going anywhere any time soon, and as talks about phasing out fossil fuels continue, it’s important that all areas where fossil fuels are used are being addressed.
With the political environment changing and a global focus on climate change, there’s a pressing need for electric tractors, motorcycles, and other vehicles that are not being addressed by other companies.
As with any emerging space, those that jump in and carve a niche early tend to be the leaders in the long run. With Ideanomics jumping in and doing just that, it has a high probability of becoming a clear leader in electric tractors and motorcycles.
The Bottom Line
While IDEX is a fintech play, I view the company’s activities in the electric vehicles space to be its most valuable proposition. At the end of the day, the electric cars and trucks market is becoming inundated with offerings, but there are many areas of the EV space that are, for the most part, being ignored.
By tapping into these areas, Ideanomics is flying under its competition’s radar while building a name for itself that will be hard to compete with down the line. All told, the stock is one to watch very closely as we continue to see a shift from fossil fuels to clean transportation.