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Taiga Motors Corporation (TAIG-T) will temporarily halt production of its electric off-road vehicles and lay off 70 workers, as the Montreal-based company turns toward efficiency measures after a period of rapid growth.
Announced in its 2023 financial results, the maker of electric snowmobiles and jet skis said it is hitting the brakes on manufacturing to support sustainable growth. The company said it is responding to difficult economic circumstances and “an unusually mild winter that negatively impacted the snowmobile business.”
“. . . Taiga is in the process of taking several steps to adjust its operations to better align seasonal production timing with dealer inventory levels,” the company said in a release.
Taiga reported a $72.5 million net loss in 2023 compared to $59.5 million in 2022, though its revenue increased to $16.1 million in 2023 from the sale of 592 vehicles - compared to $3.2 million in 2022.
It will look to reduce operational costs in 2024 while growing sales, Taiga added.
Taiga shares fell by 53 per cent from market open to $0.30 in early afternoon trading on the announcement.
Accelerating activities in 2023
Taiga ramped-up business in 2023, increasing its cost of sales to $43 million compared to $29.2 million in 2022, and spending $15.4 million on research and development, up from $9.4 million the prior year. It raised sales and marketing spending by $0.8 million to $5.1 million in 2023.
Its inventory rose to $33.2 million as of the end of 2023, over $10 million more from $20.8 million in 2022.
The company’s cash coffers fell to $5.3 million by Dec 31, 2023, compared to $22.8 million the year prior.
In Q4 2023, Taiga made $6.1 million in revenue from selling 242 vehicles, rising over four times year-over-year from $1.4 million. Sales were close to evenly split between its Orca PWC watercraft and Nomad snowmobiles.
Despite a bigger annual net loss in 2023 compared to 2022, Taiga decreased its Q4 2023 net loss to $22.2 million from $23.8 million in Q4 2022.
Taiga did not disclose its guidance or outlook because of its change in strategy.
More pre-orders, dealer sales
By the end of 2023, Taiga’s pre-orders numbered 2,442. Its priority will be “maintaining a pre-order level and sales pipeline in line with its production plan.”
To boost sales and support customers, Taiga indicated it intends to sell its electric vehicles through local dealers. Taiga said it built inroads in South America and the United Arab Emirates to expand distribution channels in Q4 2023, as well as in Sweden for snowmobile deliveries.
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