By Stephen Nakrosis
Electric-vehicle maker Volcon Inc. said Thursday it was planning to consolidate its supply chain to “countries friendly to U.S. manufacturers, especially those located in North America.”
Volcon said it was seeking to reduce its reliance on parts and components sourced from China. Jordan Davis, the company’s chief executive, said, “The manufacturing, supply chain and logistics environment in which small and emerging companies are participating is changing at a rapid pace. Socio-economic and geo-political landscapes are much different now than they were two to three years ago.” He also said, “we believe that eliminating our reliance on Chinese components to the greatest extent possible will improve our payment terms and cash outlay for parts and components that can be sourced closer to home.”
Mr. Davis said “while we understand this transition will take time to execute, and that some products will require sourcing from southeast Asia for the time being, we believe that this cost-reduction plan stands as the best course of action to reach profitability as quickly as possible for our business and for our shareholders.”
Also on Thursday, the company said it entered a contract manufacturing agreement that will see GLV Ventures produce the Volcon Grunt and the Volcon Stag.
Volcon said, as part of a program to improve cash flow and profitability over the immediate and near term, it will close its manufacturing operations in Round Rock, Texas, and merge its logistics and storage operations into a single location.
The maker of off-road electric vehicles said it “plans to look at additional opportunities to utilize third-party manufacturers that have robust infrastructure, established supply bases that enable a lower cost structure, high utilization of overhead and greater purchasing power.”
Volcon will also reduce headcount, the company added.
The company’s shares closed Thursday’s regular session with a 15.98% gain, following news that Ted Turner Reserves agreed to buy eight Volcon Stags and will assess the possible expansion of their entire fleet.
Write to Stephen Nakrosis at [email protected]
