EuroSports Global, once a purveyor of luxury automobiles like Lamborghini and Alfa Romeo, is pivoting sharply in response to the burgeoning electric vehicle (EV) market. The company has ventured into its own line of EVs, capitalising on the growing demand for sustainable transportation solutions.
In November 2020, it raised US$6.3 million to form Scorpio Electric (Scorpio). Without disclosing the investors’ identities, the funds were used to develop the brand’s software and hardware for its first electric motorcycle. It was slated to launch in 2021 but the pandemic hit, and Scorpio faced production delays.
In January 2023, Scorpio raised another US$6.75 million ($9 million) to develop and test its first electric motorcycle, the Scorpio Electric X1. These funds will be used to manufacture the first batch of X1 pre-production prototypes, while mass production and global deliveries have commenced since 1H2023.
Some funds will also be allocated to expand the brand’s portfolio and develop new premium electric motorcycle models.
“The pandemic presented our business with plenty of hurdles. It was a contributing factor to our new production timeline,” says Scorpio Electric CEO Joshua Goh in an interview with The Edge Singapore.
Joshua — who is the son of Melvin Goh, founder, CEO and executive chairman of EuroSports — says Scorpio was born from Melvin’s vision to create a world-class motorcycle brand. Melvin founded EuroSports in 1998 when it started distributing Lotus automobiles in Singapore. It eventually started distributing Lamborghini and Alpha Romeo vehicles as well.
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In a 2021 interview with The Edge Singapore, Melvin said: “Time is ticking, and if the world is going to switch to EVs, then we better catch the opportunity to create our own brand and to create Singapore’s first brand.”
While Melvin founded Scorpio, which was named after his horoscope, he has since passed the reins to Joshua. Melvin still holds an advisory role in the company and works closely with Joshua, who acknowledges that both his parents played an important role in his move into this position as CEO.
Electric dreams
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Joshua shares similar goals to Melvin’s. He says: “Electrification is here today because, internationally, everyone has come to a consensus that we must battle climate change.”
While four-wheelers have led the way towards the shift to EVs, Joshua sees the two-wheeler market as the perfect platform to accept the change towards electrification because of its small form.
Scorpio is looking to break into this market. It has already raised over US$13 million to fund its business, and Joshua observes that much more investment is being made into the overall EV industry.
Although Scorpio did not disclose the identity of its investors, it has announced that Chinese EV giant BYD is a key technology partner of the group. BYD has been contracted to assemble the X1 in its manufacturing facility in Shenzhen. BYD’s agreement to the partnership was a surprise, as Joshua admits this is a relatively small project for a giant like BYD to consider.
“Apart from offering supply chain management expertise, BYD, as our partner, has also supported us in sharing their experience as a market leader. They have assisted us in reviewing our designs and provided engineering advice,” says Joshua.
Scorpio signed a non-binding memorandum of understanding (MOU) in April 2021 with Strides, an SMRT unit, to develop and distribute smart electric motorcycles to commercial and corporate clients in Singapore and the rest of Asia Pacific.
The MOU has since lapsed due to delays in the production line and the product’s overall launch. Joshua explains that Scorpio “does not believe” in removable and swappable batteries and instead favours fast-charging EVs that can cater to higher performance.
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“As we explored this exercise with Strides, we realised that EV adoption is still low today. We are unable to create a product that is catered to businesses and corporations that want something fast, good, and cheap,” he says.
“Also, due to the nascent battery technology, the performance of a low-cost electric motorbike will be below that of an ICE [internal combustion engine] equivalent. So, we decided not to pursue this venture with Strides,” he adds.
Hitting the road
The X1 was launched at the Esposizione Internazionale Ciclo Motociclo e Accessori exhibition — a leading motorcycle show — in Milan, Italy, in November last year. Joshua says the X1 will first be launched in Europe, with deliveries expected in the summer of 2024. Alongside the X1 launch, Scorpio has released two concept models: Xi and Alpha.
On Apr 2, Scorpio announced that it has appointed distributors in selected global markets as part of its ongoing global expansion strategy. It has appointed distributors in Japan, the Philippines, Portugal and Spain.
“We have meticulously chosen these markets based on various factors, including the presence of passionate enthusiasts, a burgeoning two-wheeler consumer market, and a growing inclination towards electric mobility solutions,” says Johsua. He adds that the company is also looking to enter other territories in Southeast Asia and Europe, regions Scorpio has identified as having strong market penetration and growth potential.
Throughout the distributor selection process, Scorpio has prioritised criteria such as local market network, expertise, established facilities and infrastructure, regulatory compliance and a symbiotic relationship with the brand’s core values. The company remains steadfast in its commitment to delivering the X1, with production and shipments expected to commence in 4Q2024.
Revving up costs
Scorpio may be considered a start-up company, but it is also a subsidiary of EuroSports, which holds a 73.69% stake.
In EuroSports’ latest 1HFY2023 ended September 2023, revenue decreased by 70.4% y-o-y to $8.63 million, mainly due to the lower volume of cars distributed. With lower revenue, EuroSports recorded a loss of $6.2 million, widening from a loss of $2.3 million in the same period a year ago.
Scorpio Electric, meanwhile, is incurring costs under EuroSports’ balance sheet and has yet to contribute meaningfully. “The group anticipates top-line growth as we commence deliveries [of the X1] in summer 2024,” said EuroSports in its 1HFY2023 results announcement.
As at April 16, shares in EuroSports are down nearly 18% over the year to 16 cents, giving it a market capitalisation of some $40.3 million.
Throughout 2023, the group performed several share buybacks. Joshua comments: “Our share buyback activities signal to the market that we, EuroSports, see its share price as being undervalued.”
Joshua, too, is a company shareholder, with a 1.94% stake in EuroSports. He adds: “As an investor, the buybacks are a sign that the group thinks it is undervalued. As a shareholder, I am equally invested in making sure that we succeed.”
Joshua’s focus is on building Scorpio, and he has no plans of making further investments. Over the next few months, Scorpio will intensify its efforts to strengthen partnerships and explore new avenues for growth in the selected markets. It plans to grow its distributor and dealer network to over 10 to 15 cities in Asia Pacific and Europe.
