VMAR: Unique Play in EV Drivetrain and Boat Tech

Roth MKM -June, 9, 2023 - Equity research

Initiating coverage of Vision Marine Technologies Inc.

Vision is working to bring the benefits of drivetrain electrification to the performance and environmentally-minded boating world. Management introduced the E-Motion outboard electric motor in December 2022, and we expect this product to materialize as the primary driver of future growth. Demonstrations have been impressive with the Vision team setting a record speed of 109 mph for an electric boat in the summer of 2022.

The E-Motion 180E 180-horsepower outboard motor is slated to start commercial produciton in late 2023, and offers an easy package for third-party boat OEMs to integrate the technology.

Vision is also introducing a rotomolded polyethelyne boat, the Phantom, with a cost-effective and ruggedized hull, ideal for the rentals market, and we will monitor market uptake closely at the time of initial deliveries, which are slated to take place in 1HF24.

We expect the E-Motion and Phantom to drive impressive growth supplementing momentum in existing operations, including the four low-speed electric boat models offered and the EV boat rentals business. We recommend VMAR as a unique tech play with high-growth potential in an emerging market.

E-Motion 180 Electric Outboard Motor

Vision Marine’s patented electric outboard motor, the E-Motion180E, was introduced in December 2020, and is designed to replace traditional low-power internal combustion engine motors. The purpose-built E-Motion 180E Series electric marine outboard system delivers 180 horsepower with 350 newton-meters (NM) of torque. The system integrates a 110 kW, 650V continuous power lithium-ion battery pack, inverter, and high-efficiency motor system with up to 94% efficiency between charges, and has been tested at high speeds of more than 60 miles per hour. The outboard motor weighs 413 pounds (188 kg) and its shaft assembly is customizable with small, large and extra-large length options for a variety of freshwater and deepsea boat formats ranging from 18 to 28 feet in length.

The company is working on a liquid-cooled 300 horsepower version by the first half of 2024, and the team is in the research and development phase for other potential power sizes. The E-Motion product line is expected to enter commercial produciton in late 2023, where the units will be assembled under a long-term manufacturing and supply agreement with supplier McLaren Engineering, a subsidiary of Linamar. The complete electric system carries an ASP of over C$75,000, where the motor represents around 35% of the total cost.