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July 12, 2022 - SHORT GOGORO ($GGR)

Gogoro, Inc. (“Gogoro”, “GGR” or the “Company”) is a Taiwanese electric scooter manufacturer known for its battery-swapping business model. Since established in 2011, nearly all of Gogoro’s sales were from Taiwan, the majority from new Gogoro-branded electric powered two-wheeled scooters.

Gogoro’s 1Q’22 Earnings Call disclosed new vehicle registrations grew 57% in 1Q’22 year-over-year. With encouraging first quarter results (de-SPACed in April 2022), investor interest increased and GGR’s stock price rebounded by 50%+ from its recent lows.

To us, the optimism is unwarranted.

According to Taiwanese vehicle registration data, Gogoro’s 2Q’22 new vehicle registrations declined 20% year-over-year to 15,368, its worst second quarter unit sales volume since 2018.

While in 1Q’22 Gogoro new PTW registrations grew 57% year-over-year, 1H’22 Gogoro new PTW registrations declined 19% from 1H’20 and grew only 3% from 1H’21.

Increased competition from Kwang Yang Motor Co., Ltd. (“KYMCO”), the largest PTW manufacturer in Taiwan put pressure on Gogoro’s gross profit margins.

Gogoro’s 1Q’22 gross profit margin was 13.7%, significantly lower than the 20.9% forecasted to investors in its SEC filings as recently as March 2022.

Fewer new vehicle sales equate to fewer battery-swapping subscribers.

Increased competition equates to lower gross profit margins for a business that historically loses money.

Ultimately, we think Gogoro is a de-SPACed cash-burning over-valued stock promotion with declining user growth.

We are short GGR and think its stock is going lower…