Exhibit 99.2

 

LEGAL_39482631.2 1

 

 

While we’re early in our journey to build and deliver our vehicles at scale, we remain confident that we have the right business - and the right product - to deliver ongoing, durable, long - term growth. We are also looking to improve every aspect of our operations, and that includes our connectivity with you, our shareholders. Q2 2022 Shareholder Letter 2 FELLOW SHAREHOLDERS The second quarter of 2022 was marked by ongoing transformation and progress for ElectraMeccanica, in terms of both our financial and operating performance, and our continued journey toward meeting ambitious, long - term goals. Despite an exceptionally challenging economic climate, we increased pro - duction, deliveries and revenues during the quarter - even as we continued working around the clock to onshore manufacturing capabilities to our new facility in Mesa, Arizona.

 

 

This investor letter represents an important part of a long - term plan to provide you with a clear set of insights into our financial performance, our opera - tional targets and strategic thinking so we may, in turn, earn your confidence as good stewards of shareholder capital . Q2 2022 Shareholder Letter 3 And, given this is our inaugural comprehensive shareholder letter, before we review our financial performance and goals, we’d like to provide you with the strategic thinking that underpins why, and how, we are making im - portant business and in - vestment decisions for our company . The most important idea we can convey is this : we see our market, and our customers, differently than other native EV companies and also relative to tradi - tional auto manufacturers . ElectraMeccanica is not competing with car manu - facturers . Rather, we are competing with the idea that a car is always necessary, and that a scooter or a motorcycle is the only alternative to a car . Right now, there are dozens of companies, both new and legacy manufacturers, that are competing for attention, capital and market share in the auto OEM space simply by applying a new source of power - electricity - to a legacy form factor (mean - ing, cars and trucks) . But a new source of power does not make a 4000 - pound vehicle easier to park, or drive on crowded streets . It does not make that massive machine less expensive to buy, cheaper to insure, more efficient in its use of energy, or more environmentally re - sponsible to build in the first place . Fuel, in other words, isn’t the only problem . The car itself is over - due for disruption - and the market that the car serves deserves more original thinking . At some point we will come to appreciate that we do not need to live in a world designed for cars, but not people . In turn, mobility solutions like ours, that have actually been designed for people, and that address their ac - tual transportation needs, will enjoy significant, and inevitable, adoption . In the SOLO, we offer peo - ple and businesses an ele - gant, inexpensive and extraordinarily efficient an - swer to the vast majority of their mobility problems . It’s the only vehicle custom - designed for the way people actually live, work and play now - and for the next century . There are a wide array of everyday activities, un - dertaken by millions of people, that cut across in - dustry sectors, ages, lifestyles and communities . …WE ARE COMPETING WITH THE IDEA THAT A CAR IS ALWAYS NECESSARY, AND THAT A SCOOTER OR A MOTORCYCLE IS THE ONLY ALTERNATIVE TO A CAR

 

 

The fact is that much of the time most people spend in their cars is time alone, on relatively short trips. Commutes, going to the gym, errands and, of course, last - mile delivery. You don’t need a 250 - horsepower, 15 - foot, two - ton, 150 - cubic foot - ca - Q2 2022 Shareholder Letter 4 pacity vehicle that can go 120 MPH for any of these everyday activities - whether or not it’s electric. The SOLO addresses this need - providing an attractively priced, easy way to do what you do, daily - all while protecting you from bad weather, opening up parking options and even freeing up garage space . And maybe most importantly, the SOLO is fun as heck to drive . This set of needs, activities and benefits isn’t just an arbitrary collection of observations . It’s a hori - zontal market . This is essential for our shareholders to understand . We don’t just have a great product . We have a prod - uct - market fit that’s unique in the auto and EV sectors . This fit does not necessarily compete with cars, or trucks, or SUVs . It also does not compete with scoot - ers, or bicycles, or other unenclosed, zero - cargo - capacity forms of transportation. It is a horizontal space that is being over - looked by the entire industry . But we see it, and we expect you do, too . Finally, we’re aware that it’s not enough to “see” a market to sustain a business, which is why we’re la - ser - focused on our transition from pre - production to making, selling and delivering our vehicles . THE SOLO IS FUN AS HECK TO DRIVE

 

 

$1.547 M Second quarter revenues were $1.547 million, up 5x from the previous year and a 48.9% sequential increase from the prior quarter. Q2 2022 Shareholder Letter 5 193 SOLOS We manufactured 193 SOLO vehicles, up nearly 8x from the previous year and a 13.5% sequential increase. 68 DELIVERIES We delivered 68 SOLO vehicles to 68 very excited customers, a 51% se - quential increase. 13.8% INCREASE Our Net Loss for the second quarter was $20.3 million, a 13.8% sequential increase. - 121.8% GM Our Gross Margin percentage was - 121.8%, which represents a 61.5 point sequential improvement from the prior quarter. 13.5% INCREASE Our Operating Expenses (which in - clude SG&A and R&D) increased 13.5% sequentially from the prior quarter to $18.385 million, reflecting slightly higher costs to support our expanding operations. $195M Our balance sheet remains healthy, with working capital of just over $195 million at quarter end. 104 109 170 193 0 300 200 100 Solo Production 3 Q 21 4 Q 21 1 Q 22 2 Q 22 0 61 45 68 0 50 100 Solo Deliveries 3 Q 21 4 Q 21 1 Q 22 2 Q 22 OUR RESULTS As indicated earlier, we are pleased to report that our results for the quarter showed both year - over - year and sequential improvements across multiple key performance indicators:

 

 

We are pleased with these results given the multiple crosswinds that face not only ourselves, but any company seeking to build, ship and sell in an eco - nomic environment that continues to be uncertain thanks to a combination of pandemic aftershocks, supply chain disruptions, inflationary pressures, and not least, geopolitical uncertainties . Q2 2022 Shareholder Letter 6 This combination of factors makes it clearer than ever that the decision to invest in our own production facili - ties in Mesa, Arizona, was right for our company and our customers . On May 12 , 2022 , we received our occupancy certificate and cele - brated the official groundbreaking of the assembly facility and engi - neering technical center . Our 235 , 000 square foot facility will be lo - cated adjacent to the Phoenix - Mesa Gateway airport, will include an as - sembly and manufacturing plant, a research center, 22 , 000 square feet of office space and 19 , 000 square feet of lab space . Once operational, we will have a production capacity of up to 20 , 000 vehicles per year, and employ up - wards of 200 to 500 people . While it will take some time to complete the buildout and be in a position to meaningfully ramp production of the SOLO, as of right now we remain on track to be able to build our first vehicles in this facility by the end of the year . Until that time, we will continue with our manufacturing arrange - ment with Zongshen and ship vehicles from China . With 68 vehicles delivered during the quarter, we are now at 113 deliveries total for the first half of 2022 and continue to gain momentum . We have significantly refocused our consumer sales efforts, concentrating on California and Arizona, with the longer - term goal to ex - pand into those markets that demonstrate high potential for us (e . g . high rates of EV adoption, ur - ban and suburban population den - sity, etc . ) . Our go - to - market strat - egy includes entirely refreshed branding, marketing and targeting efforts, and we expect to continue to grow orders and deliveries . While our operating expenses grew 13 . 5 % from last quarter, this primarily reflects increases in oper - ating expenses as we continue to invest in building out our team, making investment in research and development, and broadening our sales and marketing efforts as we scale . In conclusion, and on behalf of eve - ryone at ElectraMeccanica who is working hard to commercialize our mission and translate it into a suc - cess for our customers, and durable, long - term value for our shareholders, thank you. Together, we’re going to build vehicles for the way we actually work, live and play for many years to come . TOGETHER, WE’RE GOING TO BUILD VEHICLES FOR THE WAY WE ACTUALLY WORK, LIVE, AND PLAY FOR MANY YEARS TO COME

 

 

ASSETS Note June 30, 2022 December 31, 2021 Current assets Cash and cash equivalents $ 176,371,603 $ 221 , 928 , 008 Receivables 202 , 082 372 , 021 Prepaid expenses 3 18 , 317 , 249 14 , 428 , 117 Inventory 4 8 , 504 , 349 3 , 580 , 450 203 , 395 , 283 240 , 308 , 596 Non - current assets Restricted cash 520 , 550 291 , 676 Long - term deposit 5 3 , 521 , 790 1 , 161 , 000 Plant and equipment 6 15 , 787 , 974 8 , 386 , 478 Right - of - use assets 8 9 , 319 , 631 1 , 737 , 409 Goodwill and other intangible assets 963 , 575 965 , 539 TOTAL ASSETS $ 233,508,803 $ 252 , 850 , 698 LIABILITIES Current liabilities Trade payables and accrued liabilities 7 6 , 976 , 974 6 , 810 , 781 Customer deposits 461 , 536 489 , 040 Construction contract liability 59 , 510 161 , 879 Current portion of lease liabilities 8 757 , 924 392 , 279 8 , 255 , 944 7 , 853 , 979 Non - current liabilities Derivative liabilities 9 156 , 576 244 , 565 Lease liabilities 8 16 , 980 , 076 1 , 494 , 992 Deferred revenue 119 , 253 119 , 253 TOTAL LIABILITIES 25 , 511 , 849 9 , 712 , 789 EQUITY Share capital 10 372 , 912 , 137 372 , 278 , 512 Deficit ( 189 , 782 , 277 ) ( 151 , 653 , 994 ) Reserves 24 , 867 , 094 22 , 513 , 391 TOTAL EQUITY 207 , 996 , 954 243 , 137 , 909 TOTAL LIABILITIES AND EQUITY $ 233,508,803 $ 252 , 850 , 698 Q2 2022 Shareholder Letter 7 ElectraMeccanica Vehicles Corp. Interim Condensed Unaudited Consolidated Statements of Finanical Position (Expressed in United States Dollars)

 

 

Three Months Ended Q2 2022 Shareholder Letter 8 Six Months Ended Note June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Revenue $ 1,546,715 $ 298,796 $ 2,585,358 $ 482,385 Cost of revenue 3,430,603 253,704 6,372,739 469,310 Gross profit / (loss) (1,883,888) 45,092 (3,787,381) 13,075 Operating expenses General and administrative expenses 11 9,762,990 8,526,249 18,376,107 13,062,225 Research and development expenses 12 5,614,265 4,590,463 10,285,365 6,883,644 Sales and marketing expenses 13 3,007,920 2,250,129 5,924,258 4,323,316 18,385,175 15,366,841 34,585,730 24,269,185 Operating loss (20,269,063) (15,321,749) (38,373,111) (24,256,110) Other items Interest income (243,471) (122,292) (325,933) (234,214) Interest expense 264,053 33,921 309,034 64,101 Changes in fair value of derivative liabilities 9 (172,465) (3,584,770) (270,746) (12,257,385) Other (income)/expense 28,761 (80,870) (13,648) (92,370) Foreign exchange (gain)/loss 149,958 (121,203) 55,618 (109,043) Loss before taxes (20,295,899) (11,446,535) (38,127,436) (11,627,199) Current income tax expense 847 850 847 850 Net loss (20,296,746) (11,447,385) (38,128,283) (11,628,049) Other comprehensive income/(loss) 12,195 (6,474) 6,345 (14,333) Comprehensive Loss $ (20,284,551) $ (11,453,859) $ (38,121,938) $ (11,642,382) Loss per share – basic and fully diluted Weighted average number of shares out - standing – basic and fully diluted $ (0.17) $ (0.10) $ (0.32) $ (0.11) 118,612,731 112,962,128 118,532,693 108,301,375 ElectraMeccanica Vehicles Corp. Interim Condensed Unaudited Statements of Loss and Comprehensive Loss (Expressed in United States Dollars)

 

 

Share capital Amount net Share - based Foreign Currency Note Number of shares of share issue cost payment reserve Translation Reserve Deficit Total Balance at December 31, 2020 89,309,563 $ 212,058,836 $ 16,446,400 $ 4,501,213 $ (110,327,159) $ 122,679,290 Effect of change in functional currency (14,539,226) - - - (14,539,226) Balance at January 1, 2021 89,309,563 197,519,610 16,446,400 4,501,213 (110,327,159) 108,140,064 Shares issued for cash 20,365,495 142,493,563 - - - 142,493,563 Shares issued pursuant to exercise of warrants 2,195,640 16,802,299 (1,164) - - 16,801,135 Shares issued pursuant to exercise of options 1,058,724 727,253 (277,794) - - 449,459 Stock - based compensation - - 1,462,866 - - 1,462,866 Net loss for the period - - - - (180,664) (180,664) Foreign currency translation reserve - - - (7,859) - (7,859) Balance at March 31, 2021 112,929,422 $ 357,542,725 $ 17,630,308 $ 4,493,354 $ (110,507,823) $ 269,158,564 Share issuance costs - (2,887) - - - (2,887) Shares issued pursuant to exercise of warrants 88,774 404,354 - - - 404,354 Shares issued pursuant to exercise of options 21,825 104,301 (53,972) - - 50,329 Stock - based compensation - - 1,720,483 - - 1,720,483 Net loss for the period - - - - (11,447,385) (11,447,385) Foreign currency translation reserve - - - (6,474) - (6,474) Balance at June 30, 2021 113,040,021 $ 358,048,493 $ 19,296,819 $ 4,486,880 $ (121,955,208) $ 259,876,984 Balance at December 31, 2021 117,338,964 372,278,512 18,011,591 4,501,800 (151,653,994) 243,137,909 Shares issued pursuant to exercise of options 1,245,455 346,206 (50,690) - - 295,516 Shares issued pursuant to exercise of RSU 27,077 224,557 (245,343) - - (20,786) Stock - based compensation 11 - - 1,109,266 - - 1,109,266 Net loss for the period - - - - (17,831,537) (17,831,537) Foreign currency translation reserve - - - (5,850) - (5,850) Balance at March 31, 2022 118,611,496 $ 372,849,275 $ 18,824,824 $ 4,495,950 $ (169,485,531) $ 226,684,518 Shares issued pursuant to exercise of options 113,636 62,862 (14,312) - - 48,550 Stock - based compensation - - 1,548,437 - - 1,548,437 Net loss for the period - - - - (20,296,746) (20,296,746) Foreign currency translation reserve - - - 12,195 - 12,195 Balance at June 30, 2022 118,725,132 $ 372,912,137 $ 20,358,949 $ 4,508,145 $ (189,782,277) $ 207,996,954 Q2 2022 Shareholder Letter 9 ElectraMeccanica Vehicles Corp. Interim Condensed Unaudited Statements in Equity (Expressed in United States Dollars)

 

 

Three Months Ended Q2 2022 Shareholder Letter 10 Six Months Ended Operating activities June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Net loss for the period $ (20,296,746) $ (11,447,385) $ (38,128,283) $ (11,628,049) Adjustments for: Amortization 1,391,113 990,537 2,656,491 1,902,366 Stock - based compensation expense 1,658,057 1,720,483 2,840,460 3,183,349 Interest (income)/expense 18,054 (88,371) (19,427) (170,113) Inventory provision 1,361,160 - 2,812,496 - Changes in fair value of derivative liabilities (172,465) (3,584,770) (270,746) (12,257,385) Changes in non - cash working capital items: Receivables (44,481) (169,556) 169,940 (277,524) Prepaid expenses and deposit 1,113,576 717,976 (5,356,208) (7,323,794) Inventory (3,617,027) 24,903 (7,736,395) 30,764 Trade payables and accrued liabilities 1,699,520 2,447,617 (140,409) 2,144,121 Customer deposits and construction contract liability (147,104) (36,034) (129,873) 22,504 Net cash flows used in operating activities (17,036,343) (9,424,600) (43,301,954) (24,373,761) Investing activities Investments in restricted cash (228,092) (18,613) (228,874) (19,456) Expenditures on plant and equipment (1,102,668) (1,343,334) (2,171,060) (3,025,123) Net cash flows used in investing activities (1,330,760) (1,361,947) (2,399,934) (3,044,579) Financing activities Interest income received 243,950 332,352 330,195 400,728 Interest income received from net investment in sublease - 489 - 1,335 Interest paid on lease payments (72,391) (38,917) (121,155) (74,088) Repayment of leases (161,231) (187,794) (393,182) (350,843) Payment received for net investment in sublease - 14,511 - 28,665 Proceeds on issuance of common shares – net of issue costs Payment for RSU settlement Proceeds from issuance of common shares for options exer - cised Proceeds from issuance of common shares for warrants ex - - - (2,887) - - (20,786) 142,490,676 - 4 8 , 5 5 0 50,329 344,066 499,788 - 288,099 - 5,014,527 ercised Net cash flows from financing activities 58,878 456,182 139,138 148,010,788 Increase/(decrease) in cash and cash equivalents (18,308,225) (10,330,365) (45,562,750) 120,592,448 Effect of exchange rate changes on cash 12,195 (6,474) 6,345 (14,333) Cash and cash equivalents, beginning 194,667,633 260,365,630 221,928,008 129,450,676 Cash and cash equivalents, ending $ 176,371,603 $ 250,028,791 $ 176,371,603 $ 250,028,791 ElectraMeccanica Vehicles Corp. Interim Condensed Unaudited Statements of Cash Flows (Expressed in United States Dollars)

 

 

FAIR HARBOR STATEMENT Except for the statements of historical fact contained herein, the information presented in this letter constitutes “forward - looking state - ments” as such term is used in applicable United States and Canadian securities laws. These statements relate to analyses and other infor - mation that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will”, or their negatives or other comparable words) are not statements of histori - cal fact and should be viewed as “forward - looking statements”. Such forward looking statements involve known and unknown risks, uncer - tainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Such risks and other factors include, among others, the prices of other electric vehicles, costs associated with manufacturing vehicles, the availability of capital to fund business plans and the resulting dilution caused by the raising of capital through the sale of shares, changes in the electric vehicle market, changes in government regulation, developments in alternative technologies, inexperience in servicing electric vehicles, labor disputes and other risks of the electric vehicle industry including, without limitation, those associated with the delays in obtaining governmental approv - als and/or certifications. Although the Company has attempted to identify important factors that could cause actual actions, events or re - sults to differ materially from those described in forward - looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward - looking statements contained in this letter and in any document referred to in this letter. Forward - looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and the Company undertakes no obligation to update forward looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Such forward - looking statements reflect our current views with respect to future events and are subject to certain risks, un - certainties and assumptions, including, the risks and uncertainties outlined in our most recent financial statements and reports and registra - tion statement filed with the United States Securities and Exchange Commission (the “SEC”) (available at www.sec.gov) and with Canadian securities administrators (available at www.sedar.com). Although the Company believes that the beliefs, plans, expectations and intentions contained in this letter are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consider all of the information set forth herein and should also refer to the risk factors disclosed in the Company’s periodic reports filed from time - to - time with the SEC. This letter shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Q2 2022 Shareholder Letter 11