Shares of Spi Energy Co Ltd (NASDAQ:SPI), which saw astronomical gains in late September before regaining some semblance of normalcy, are headed higher again Thursday.
What Happened: The Santa Clara, California-based renewable energy company said its EdisonFuture, a wholly-owned subsidiary, has entered into a strategic cooperation framework agreement with Shaanxi Tongjia Automobile, a manufacturer of all-electric logistics vehicles in China.
The terms of the agreement call for both companies cooperating in the customized design, development, production and sales of new-gen smart electric pickup trucks and electric logistics vehicles, SPI Energy said.
While Tongjia will supply parts and support to EdisonFuture's assembly facility in Fresno, California, EdisonFutre will assemble the vehicles, including the addition of software and other parts produced locally.
EdisonFuture will also serve as the exclusive North American distributor of all-electric last-mile delivery box trucks and pickup trucks, currently produced by Tongjia.
Why It's Important: The last-mile delivery market in North America is valued at multi-billion dollars, and is continuing to see rapid growth, SPI Energy said. This necessitates EV solutions for logistic operators, which are looking to lower costs and in turn boost profitability.
"Through our partnership with Tongjia we believe we can meet this growing demand," said Xiaofeng Peng, CEO of SPI Energy.
The Stock Action: SPI Energy, which started the year around $2 a share, gave back much of the gains and was wallowing in penny stock territory amid the COVID-induced sell-off. Steadying around $1 since late June, jumped more than 1,200% to $14 on Sept. 23 when it announced the setting up of an electric vehicle subsidiary. The stock skyrocketed to as much as $46.67 before pulling back.
Retreating after the stratospheric gains, the stock consolidated in the $7-$8 area since early October.
Thursday's announcement has sent the stock higher by 35% to $9.70 at publication time.