LONDON and TAIPEI – Castrol, a subsidiary of the bp group, has made a strategic investment of $25 million in Gogoro Inc. (Nasdaq: GGR), a company specializing in battery-swapping technology for electric two-wheelers. This investment, which accounts for approximately 5.72% of Gogoro's outstanding ordinary shares, is part of a larger planned investment totaling up to $50 million.
The transaction aligns with Castrol's 'Onward, Upward, Forward' strategy, aimed at diversifying its portfolio beyond its traditional lubricants and fluids business. The second part of the investment, another $25 million in the form of a convertible note, is contingent on the completion of certain business collaborations between the two companies.
Michelle Jou, CEO of Castrol, emphasized the significance of electric two-wheelers in their global product portfolio and Castrol's role in supporting the ecosystem as their customers transition to electric mobility. Jou views the investment in Gogoro as a means to future-proof Castrol's 125-year-old brand and create additional shareholder value.
Gogoro's Founder and CEO, Horace Luke, pointed to the investment as validation of the company's successful model and an enabler for further expansion. Gogoro's battery-swapping platform has been recognized for its ability to transform urban mobility by providing smart, sustainable, and convenient power solutions.
The Gogoro Network, central to its business model, operates over 12,500 battery swapping stations that support more than 600,000 vehicles and 1.3 million smart batteries in circulation. It facilitates 450,000 daily battery swaps and has completed over 590 million swaps to date, serving 2.8 million ecosystem subscribers across 45 cities globally.
This investment marks Castrol's first significant step into the electric vehicle sector and reflects a broader trend of traditional energy companies investing in renewable and sustainable technologies.
The information for this report is based on a press release statement.
In other recent news, Gogoro, notable for its battery-swapping technology for two-wheel vehicles, secured a $50 million investment from Gold Sino Assets Limited. This investment is intended to bolster Gogoro's urban battery-swapping ecosystems and support its expansion into international markets. Gold Sino, Gogoro's largest shareholder, will purchase over 32 million ordinary shares, further solidifying their partnership.
On the financial front, Gogoro reported a year-over-year revenue decline of 12.1% to $69.7 million in its Q1 2024 earnings call. Despite this, the company maintains a positive outlook, projecting revenues between $385 million and $420 million for the year. Gogoro's growth strategy includes expanding its battery-swapping network and launching new vehicles powered by its technology in India and Southeast Asia.
In addition to these developments, Gogoro has entered into a memorandum of understanding with Sumitomo Corporation to support its growth in Asia. The company has also launched two new vehicles, JEGO and Pulse, and introduced a new battery-swapping subscription plan.
InvestingPro Insights
As Castrol ventures into the electric mobility space with its investment in Gogoro Inc., it's crucial to understand the financial health and market performance of the battery-swapping technology company. According to real-time data from InvestingPro, Gogoro operates with a market capitalization of $392.24 million and has experienced a revenue decline of -7.47% over the last twelve months as of Q1 2024. The company's P/E ratio stands at -6.93, reflecting investor sentiment about its earnings potential.
InvestingPro Tips indicate that Gogoro may have trouble making interest payments on its debt and is quickly burning through cash. This could be a concern for investors considering the company's significant debt burden. With the company not profitable over the last twelve months and analysts not anticipating profitability this year, Castrol's investment comes at a time when Gogoro is facing financial challenges. In addition, the stock has exhibited high price volatility, with a 45.14% drop in the 6-month price total return and a 55.8% decline over the last year.
For investors and stakeholders evaluating the potential of Gogoro's partnership with Castrol, these financial metrics and InvestingPro Tips provide a more nuanced view of the company's current standing. To explore additional insights and tips, which can further inform investment decisions, visit https://www.investing.com/pro/GGR. There are over 10 additional InvestingPro Tips available, offering a deeper dive into Gogoro's financials and market performance. For those interested in a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24 to get an additional 10% off.
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