Gogoro Inc was once a rising star and a would-be unicorn in the years prior to its debut on the NASDAQ in 2022, as its environmentally friendly technology and stylish design attracted local young people. The electric scooter and battery swapping services provider is bracing for a major personnel shakeup following the abrupt resignation on Friday of founding chairman Horace Luke (陸學森) as chief executive officer.
Luke’s departure indicates that Gogoro is sinking into the trough of unicorn disillusionment, with the company grappling with poor financial performance amid a slowdown in demand at home and setbacks in overseas expansions. About 95 percent of the company’s revenue this year would come from Taiwan, Gogoro told investors last month.
Gogoro’s stock price tumbled 5.42 percent to close at US$0.995 on Monday, down about 93 percent from US$14.2 when it debuted in April 2022 as investors’ patience wears thin. That brought the company’s market value down to about US$294 million, another step away from the US$1 billion threshold to be a unicorn.
Gogoro did not disclose why Luke resigned, but poor financial performance is widely believed to be the main factor behind the decision. The 13-year-old company’s losses widened to US$20.1 million in the second quarter of this year from US$5.6 million in the same period last year and it has accumulated US$276.38 million in losses since 2021, based on information on the company’s Web site.
In Taiwan, high prices for the scooters and battery leasing, and fears about the range of its machines, as well as the benefits of electric scooters in general versus gasoline-powered models, are posing headwinds for the company. The percentage of electric scooters among purchases of new scooters in Taiwan has stagnated at about 10 percent over the past few years from the peak of 20 percent in 2019. Overall, electric scooters only account for about 5 percent of the scooters on Taiwan’s roads, meaning that 1.66 million electric scooters would have to be sold by 2030 to reach the government’s goal of 15 percent by that year. The goal is part of the government’s efforts to reduce carbon emissions.
To address those issues, Gogoro in the first quarter launched an affordable model, called JEGO, with a starting price of NT$57,980 and an option for a NT$199 monthly battery charging subscription. The new model has had initial success, as Gogoro has been unable to fully satisfy demand. As of June 30, it has 5,600 back orders for JEGOs, with the machines popular among price-sensitive groups such as students and housewives.
Even though Gogoro has a dominant 70 percent share of the electric scooter market in Taiwan, it has not generated enough revenue here to improve its bottom line. Overseas expansions became crucial, but breakthroughs were difficult amid strong competition from local brands and delays in the Indian government’s subsidy policy, the company’s most important market.
Luke’s successor, Tamon Tseng (曾夢達), is the general counsel of Ruentex Group, the biggest stakeholder of Gogoro. However, he is not an expert in design or brand development. Gogoro Taiwan general manager Henry Chiang (姜家煒), 31, is to serve as acting CEO during the interim period, the company said in a statement on Friday. The personnel shakeup could sap the company’s strength, as Luke played an instrumental role in shaping Gogoro’s brand image.
As the electric scooter market matures, it is becoming more difficult to differentiate from the designs of other firms. Tseng and Chiang face a challenge to regain Gogoro’s past glory and turn the company around financially. Moreover, the government would need to rethink its plans to reduce carbon emissions if it fails to meet its goal of a 15 percent penetration rate for electric scooters by 2030.
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