AUSTIN, Texas, Aug. 25, 2022 (GLOBE NEWSWIRE) — Volcon Inc. (NASDAQ: VLCN) (“Volcon” or the “Company”), the premier all-electric off-road powersports company, today announced a program and manufacturing transition to improve profitability and cash flow.
To improve short-term and near-term cash flow and profitability, Volcon will close its manufacturing operations in Round Rock, Texas, merging its logistics and warehousing operations into one location, reducing warehousing and storage costs. ‘execution. In order to improve product margins, the Company entered into a contract manufacturing agreement with GLV Ventures (GLV), a well-established automotive supplier and manufacturer. GLV Ventures and its partner companies have been providing strong automotive solutions, superior product development and advanced manufacturing in a timely and cost-effective manner for over 25 years. GLV will produce the Volcon Grunt in current and future models, as well as the Volcon Stag, the first electric UTV launched by Volcon in July 2022.
The Company expects these actions to improve the overall gross margin at the product-by-product level by reducing material, labor and overhead costs, reducing operating expenses due to the lower headcount and facility costs, all of which should improve cash retention. The Company is also looking to reduce its reliance on parts and components from China and will seek to consolidate its supply chain to countries friendly to US manufacturers, particularly those located in North America.
“The manufacturing, supply chain and logistics environment in which emerging small businesses participate is changing at a rapid pace. The socio-economic and geopolitical landscapes are very different today than they were two or three years ago,” said Jordan Davis, CEO of Volcon. “Over the past few quarters, our leadership team has been re-evaluating our costs across the organization to ensure we are properly structured to achieve profitability to set us up for long-term success. Although we have successfully managed supply chain and logistical issues to date, we believe the best course of action for our profitability and cash retention is to leverage the scale of third-party manufacturers. that eliminating our reliance on Chinese components where possible will improve our payment terms and cash outlays for parts and components that can be purchased closer to home.While we understand that this transition will take time to execute and some products will require sourcing from Southeast Asia at the moment, we believe this cost reduction plan constitutes the best course of action to achieve profitability as quickly as possible for our company and for our shareholders. As part of this program, we made the difficult decision to downsize the Volcon team. It was a very difficult decision because we recognize that we are losing quality teammates. We thank them for their dedication to building a great product because we couldn’t have brought the Grunt to market without them.
To improve competitiveness and profitability in the immediate and near term, Volcon plans to examine other opportunities to utilize third-party manufacturers that have robust infrastructure, established supply bases that enable a lower costs, high overhead utilization and greater purchasing power. The Company believes that these types of relationships will allow it to launch products at an accelerated pace which the Company believes will improve near-term profitability.
About Volcon Inc.
Volcon Inc. is the first all-electric powersports company to produce high-quality off-road vehicles. Based in Round Rock, Texas, Volcon joins many large electric vehicle companies located near Austin, Texas, an area that is fast becoming the electric vehicle capital of the world.
Volcon was founded with a mission to enhance the outdoor experience while reducing the industry’s environmental footprint so that adventurers and workers can enjoy the outdoors and preserve it for generations to come. Volcon produces all-electric all-terrain vehicles designed to elevate the adventure experience and help people get things done at work and at home.
Volcon’s first product, the innovative Grunt, combines big-tire physique with high-torque electric power and a near-silent drivetrain that began shipping in September 2021. Future two-wheeled models could include the Runt, which is a youth sized bike. version of the revolutionary Grunt, and an eBike, the Brat. The stag and Project X are expected to be Volcon’s venture into the rapidly expanding world of UTVs and are expected in the years to come as the company continues to grow.
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For more information on Volcon or to learn more about its full line of motorcycles and side-by-sides, visit: www.volcon.com
Some of the statements contained in this press release are forward-looking statements, which involve risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date they are made, the expectations may turn out to be materially different from the results expressed or implied by these forward-looking statements. The Company has attempted to identify forward-looking statements by terminology including “believes”, “estimates”, “anticipates”, “”intends” ”potential” ”may” ”could” ”could” ”will” ”should” ”approximately” or other words that convey uncertainty of future events or results to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. All forward-looking statements contained in this press release speak only as of its date. The Company undertakes no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after the date thereof or to reflect the occurrence of unforeseen events. More detailed information about the risks and uncertainties affecting the Company can be found under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the SEC, which are available on the SEC’s website, www.sec.gov.