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Year of writing: 2021
Author: Tony

Taiwan's leading electric locomotive manufacturer Gogoro is about to go public in the U.S.

Gogoro is expected to become the international power exchange system specification setter

Taiwan's electric locomotive leader, Gogoro, will soon be listed in the United States through SPAC (Special Purpose Acquisition Company). Gogoro is not only a brand of electric locomotives, but also a supplier of battery exchange stations, trying to build a battery exchange network and build a green energy smart transportation city. Therefore, Gogoro's battery exchange network has cooperated with many manufacturers, aiming to provide sustainable mobile solutions.


1. Business model


Gogoro's diversified business model is different from most Taiwanese companies selling hardware thinking. Gogoro is more like selling "solution". Its business projects are divided into B2B and B2C. Network), B2B includes: 1. Sales of key components of electric vehicle systems, smart batteries and battery exchange stations 2. Battery exchange network management system; B2C includes: 1. Sales of private-brand vehicles 2. Battery exchange subscription service 3. GoShare electric car sharing service. B2C creates better and stable long-term revenue through subscription services, and shared services can collect a larger amount of user data, and through the big data analysis of the Gogoro IoT software platform, achieve all-round improvement, and create an iQ System locomotive operating system to allow locomotives It is no longer just a means of transportation, but also a part of the user experience.


Gogoro business model (picture source: Gogoro official website)

2. Concept stocks of key components

The biggest difference between electric locomotives and traditional locomotives is the lithium battery and motor system. Lithium batteries are also the most expensive part of the entire electric locomotive. Gogoro uses self-made batteries. The key components in the battery use Panasonic; Gogoro's special water-cooled motors include driver IC factory Maoda and motor key components factory Quanta; changing the locomotive from a transportation tool to an electronic product will also improve Automotive PCBs (printed circuit boards), PCBs are produced by Taiwan Watch Division. In addition to the car body itself, the electric locomotive also needs to be equipped with a replacement station. The supplier of the replacement station is Kangshu, a major power supply manufacturer under Jin Renbao. As Gogoro expands and expands its electric vehicle business to more regions, major electronic assembly manufacturers among the suppliers will also have the opportunity to obtain electric vehicle assembly orders in the near and future.



Gogoro motor (picture source: Gogoro official website)



Gogoro key components (picture source: Gogoro official website)

3. PBGN expansion strategy

In Taiwan, Gogoro produces and sells its own-brand locomotives. At the same time, it cooperates with many manufacturers to create an ecosystem. Each manufacturer can sell its own designed Gogoro system electric locomotives, including Hong Jia Teng, Yamaha Yamaha, PGO Motor Power, Taiwan Ling eReady and Chinese eMOVING. China Motors first advocated to build its own system, not optimistic about the form of battery replacement, but in the end it still lost the Gogoro complete ecosystem and joined the PBGN; according to the U-Car website market share statistics, the market share of electric vehicles using the PBGN system exceeded 90% , Gogoro can be said to be the overlord of Taiwan's electric locomotives.

After the battery swap model was successfully tested in Taiwan, Gogoro pointed to two major locomotive markets: China and India. In these two major markets, Gogoro chose to cooperate with local giants to build an ecosystem and not produce its own brand electric locomotives.



Gogoro's global market layout (picture source: Gogoro official website)

1. China

China is the world's largest electric locomotive market, and electric locomotives account for up to 70%, which is a rare high penetration rate in the world. However, in the past, electric locomotives could not escape the impression of slow speed and poor battery life; Gogoro would effectively reverse these disadvantages by selling hardware and software to PBGN. In China, Gogoro chose to cooperate with China's largest diesel locomotive Dachangjiang and the world's largest two-wheel electric vehicle manufacturer Yadi Technology, and chose Hangzhou as the first stop to launch a "replacement" battery exchange station, in which Gogoro supplies the key components of electric locomotives. , Batteries, energy systems, and battery exchange stations, in addition to planning a battery exchange subscription plan to share revenue, forming a diversified income composition. In addition, the overseas deployment of Gogoro electric vehicles coincides with China's aggressive carbon reduction policies, which will further promote the market expansion of high-quality electric vehicles.

2. India

India: India is a fast-growing country with locomotives, about 20 million locomotives are sold every year; Indians are more inclined to use locomotives due to the overall traffic chaos and inconvenience; however, contrary to China, the proportion of electric locomotives in India is extremely low, and the overall proportion is less than 1%. However, under the global environmental protection wave, the proportion of electric locomotives will gradually increase in the future, especially the 150cc locomotives that the Indian government requires to be sold after 2025. The locomotives below will be required to be electric locomotives. In India, Gogoro cooperates with Hero MotoCorp. Hero MotoCorp is the largest motorcycle manufacturer in India. It will join PBGN and jointly build a battery swap network with Gogoro. Initially, it will lock the capital city of New Delhi and Bangalore for battery swap stations.



Although Gogoro does not launch its own-brand locomotives in China and India, they are cooperating with local giants. This strategy will facilitate the implementation of PBGN, thereby forming a strong ecosystem that makes all manufacturers inseparable from Gogoro. In addition, the business of these partners is often not limited to their own countries. If Gogoro expands to more countries in the future, these companies will further help expand the Gogoro ecosystem.



PBGN system uses an electric locomotive manufacturer (Source: Gogoro official website)

Fourth, rivals at home and abroad


In Taiwan, the biggest competitor of Gogoro electric vehicles is Gwangyang Motors. Gwangyang focuses on the strategy of charging at home and replacing electricity when going out. The original transformation was relatively slow, but due to subsequent market expansion, it also accelerated the launch of new products. However, the group fight strategy gives Gogoro more advantages and faster expansion in the market; however, in the future, Guangyang will master the complete industrial chain from hardware, software, brand, and subscription system, and establish its own ecosystem in the era of rapid growth of electric vehicles. More critical.


Overseas, Ola Electric, an electric car brand established by Indian car-hailing platform Ola Cabs, is expected to build a rechargeable electric car industry in India and deploy a complete charging network; whether Ola Electric can compete with the Gogoro system, the key aspects are car manufacturing technology and power System, for pure software companies to transform hardware manufacturing, there will be a considerable degree of technical barriers. In addition, if the two face off in the future, it depends on consumers' preference for battery replacement or charging.


Japan’s four major motorcycle manufacturers, Honda Motor, Kawasaki Heavy Industries, Suzuki Motor, and Yamaha Motor have jointly adopted standardized power exchange systems in Japan, although the current power exchange specifications are in various countries. There is no uniformity. If these manufacturers implement battery swapping standards to more regions in the future, it will hinder Gogoro's global implementation of PBGN. Just as there were nearly ten early smartphone operating systems (Android, Microsoft, IOS, Symbian... etc.), they have converged into two camps, IOS and Android after the competition. I believe that Gogoro founder Lu Xuesen, who has served on HTC, knows well The operation of this will help Gogoro become the setter of the battery swap system specifications.

5. Shareholders and Finance

Gogoro shareholders have many backgrounds, such as Yin Yanliang, chairman of Runtai Group, Temasek, a global investment institution in Singapore, Generation Investment Management established by former US Vice President Gore, which focuses on investment in sustainable development, National Development Fund, and Sumitomo of Japan. Commercial affairs, as well as the latest investment in Hon Hai Group and Indonesia GoTo Group, show that everyone has high expectations for the future of Gogoro.


In terms of finances, Gogoro got rid of the thought of selling hardware for many years in Taiwan. The subscription service will improve financial sustainability and increase gross profit margin. There will be more and more electric locomotive users accumulated over the years, and subscription revenue will continue to grow. ; In addition, it still retains one-time income from key components. In 2019 and 2020, Gogoro's gross profit margin will remain above 20%. Although EBITDA is still losing money, the estimated loss will decrease year by year.



Gogoro's long-term financial model (Image source: Gogoro official website)

Reference: Gogoro official website , Digitimes

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