Short Gogoro (Nasdaq: GGR) – Bonitas Research
Gogoro's electric scooter sales plummet 20% in Q2 2022, market share erodes as KYMCO challenges battery-swapping dominance, with declining registrations, compressed margins, and poor app ratings threatening growth
Gogoro's electric scooter business faces a perfect storm as Q2 2022 vehicle registrations plummet 20% year-over-year to the lowest levels since 2018, while competitor KYMCO rapidly erodes its once-dominant market position with a rival battery-swapping system.
Stock info:
- Ticker: GGR (NASDAQ)
- Position: Bonitas Research and its associates hold short positions in Gogoro's stock
Why it matters:
- Sales Collapse: Q2 2022 new vehicle registrations dropped 20% year-over-year to 15,368 units, marking Gogoro's worst Q2 performance since 2018, despite a misleading 57% growth spike in Q1 2022
- Unrealistic Projections: To meet Citi's 86,000-unit 2022 forecast, Gogoro needs to sell 9,600+ units monthly in 2H 2022—a level achieved only once in the past 30 months
- Market Share Erosion: Gogoro's claimed 97% market dominance has steadily declined since Q3 2021 as traditional market leader KYMCO aggressively enters the electric scooter space with its competing "iONEX" battery-swapping system
- Margin Compression: Q1 2022 gross profit margins collapsed to 13.7%, far below the 20.9% previously communicated to investors
- User Experience Crisis: Gogoro's mobile apps (crucial for battery swapping) are plagued by poor ratings (2.0-2.6 stars) with predominantly 1-star reviews, threatening subscriber retention and growth
Zoom in:
- Gogoro's 1H 2022 registrations were only 3% higher than 1H 2021 and actually 19% lower than 1H 2020, revealing a concerning long-term decline masked by selective quarterly comparisons
- KYMCO leverages its dominant 30% share in Taiwan's traditional scooter market to rapidly gain electric scooter market share with a visually similar but incompatible battery-swapping system
- The combination of declining sales, shrinking margins, and poor app ratings creates a dangerous spiral for a business model dependent on both hardware sales and subscription revenue
- Recent stock rebounds appear driven by short-term investor optimism following the April 2022 de-SPAC process rather than sustainable business fundamentals
- Bonitas characterizes Gogoro as a "de-SPACed cash-burning over-valued stock promotion" facing fundamental operational challenges
FAQs:
What is Gogoro's core business model?
Gogoro is a Taiwanese electric scooter manufacturer known for its battery-swapping technology. Instead of charging scooters at home, users swap depleted batteries at Gogoro's network stations using a subscription model that generates recurring revenue.
What evidence supports Bonitas Research's bearish thesis on Gogoro?
The research cites official Taiwanese Ministry of Transportation data showing declining vehicle registrations, deteriorating market share, compressed profit margins (13.7% vs projected 20.9%), and poor app ratings that threaten subscriber engagement.
How significant is KYMCO's competitive threat to Gogoro?
KYMCO is Taiwan's dominant traditional scooter manufacturer with 30% market share. Its entry into the electric scooter market with a competing "iONEX" battery-swapping system has already reduced Gogoro's market share below its claimed 97% dominance since Q3 2021.
Why are Gogoro's app ratings important to its business model?
Gogoro's subscription-based battery-swapping network depends on functional apps for users to locate stations and manage their subscriptions. Poor ratings (2.0-2.6 stars) suggest user dissatisfaction that could lead to subscriber churn and revenue decline.
What sales targets would Gogoro need to hit to meet analyst projections?
According to Bonitas Research's analysis of Citi's projections, Gogoro would need to sell at least 9,600 units monthly in the second half of 2022 to reach 86,000 annual units—a level achieved only once in the past 30 months.
How has Gogoro's stock performed since going public?
After completing its de-SPAC process in April 2022, Gogoro's stock experienced a temporary rebound of over 50% from recent lows, but Bonitas Research suggests this was driven by short-term investor optimism rather than sustainable business fundamentals.
What are the main financial concerns highlighted in the report?
The report emphasizes Gogoro's cash-burning operations, declining gross profit margins (13.7% vs 20.9% projected), and the challenge of achieving profitability amid falling sales and increasing competition.
Disclaimer
This summary is based on a report by Bonitas Research. For the full, detailed analysis, please refer to the original source material: https://www.bonitasresearch.com/company/short-gogoro-nasdaq-ggr/
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