Sono Group Stock Forecast: How High Can SEV Go by 2025?

Mohit Oberoi, CFA - Author

Nov. 18 2021, Published 8:12 a.m. ET

Germany-based EV (electric vehicle) startup company Sono Group, which is the parent company of Sono Motors, has gone public and trades under the ticker symbol “SEV.” The stock soared on listing day and many people want to know the stock's 2025 forecast. How high can SEV stock go?

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There has been a renewed optimism towards EV stocks. Rivian had a bumper listing and its market cap is still above $120 billion despite the correction. Lucid Motors’ market cap is also around $85 billion. Startup EV companies commanding a market cap of $100 billion have raised fears of a bubble in the EV industry.

Did Sono Motors’ underwriters make a mistake?

There was a chance that Sono Motors could end up pricing the IPO above the $14–$16 range that the company had originally provided. However, the company priced the IPO at $15, which was at the midpoint of the range. Berenberg was the global coordinator for the IPO, while Craig-Hallum was the co-manager.

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The underwriters seem to have underpriced the IPO and the stock soared above 150 percent on the very first day. While the listing day surge is a welcome thing since some of the IPOs in 2021 failed to give listing gains, the massive gains also mean that Sono Motors could have priced the shares much higher given the current euphoria towards EV companies.

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Sono Motors stock 2025 forecast

The long-term forecast for EV stocks, including Sono Motors, looks positive. The company is a niche play in the EV industry. Sono Motors is working on electric cars with integrated solar panels that can add 69.5 miles on average to the weekly range. The range can be as high as 152 miles per week, which is sufficient for short-distance travel.

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EV critics say that the cars aren't exactly zero-emission and simply shift the emission from the car to the power plant. Now, an electric vehicle in a country is only as environmentally friendly as the electricity mix. Coal still accounts for a big chunk of global electricity production. While countries have committed to bringing down the use of coal, it isn't going away in a hurry.

With solar integrated into its Sion model, for which Sono Motors has over 16,000 reservations according to the most recent update, Sono Motors can help address the issue. The car can generate some of the range through integrated solar panels, which would make it cost-effective but also more environmentally friendly than the usual electric cars.

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How high can SEV stock go?

In the short term, there's good momentum in SEV stock and it was trading higher in pre markets on Nov. 18 as well. The stock could see more gains in the short term since its valuations are lower than the other startup EV companies.

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However, over the long term, the company would need to execute well on production and deliveries. Some of the startup EV companies like Lordstown Motors have faltered on execution, which has made investors apprehensive about startup EV companies.

Currently, the solar range that Sono Motors has in its Sion model is higher than what some of the other similar models from Hyundai and Toyota Motors provide. If the company can boost the range more, it would help increase the adoption of its cars and take the stock much higher in the long term.


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