Roth Capital Downgrades This Electric Bus Manufacturer

Roth Capital analyst Craig Irwin downgraded GreenPower Motor Company Inc GP to Neutral from Buy with a price target of $13, down from $32, implying a 7% downside.
The analyst expects continued margin pressure, mainly due to the recent drop in CA-HVIP subsidy rates, such as for the EVStars where the cut was from $80,000 to $60,000.
Irwin added that CA-HVIP voucher sizes are expected to be cut again in early 2023, so headwinds likely pose a longer-term challenge.
The analyst said he would look for management to make material progress lowering vehicle costs before potentially becoming constructive on the stock.
On Friday, GreenPower reported second-quarter results, with sales improving 57% to $4.44 million. The gross margin contracted 860 basis points to 21.5%
Inventory increased to $22.8 million compared to $12.5 million at March 31, 2021, and $5.7 million at September 30, 2020.
Price Action: GP shares are trading lower by 3.86% at $14.05 on the last check Monday.

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