In September 2019, Shareholders were excited when EXRO publicly disclosed the first partnership under new CEO Sue Ozdemir, signing a licensing agreement with Motorino Electric. Motorino was described as a “pioneer in the Canadian electric transportation industry” with an extensive product line of electric bicycles, scooters, and motorcycles. The agreement centered around EXRO’s Coil switching technology, which was expected to enhance the performance of Motorino’s CTi electric bicycle.
At the time, EXRO framed this collaboration as a major milestone, marking the first commercial application of its technology. CEO Sue Ozdemir expressed enthusiasm about Motorino’s “nimble production capabilities” and the potential for expanding the technology beyond the CTi model.
Early Success and Promising Results
By December 2019, EXRO delivered a proof of concept to Motorino, boasting a 25% improvement in speed and torque. Throughout 2020, Motorino conducted field tests on EXRO’s Coil switching technology, with results showing more than a 20% performance boost and up to a 50% increase in climbing conditions. Motorino’s CEO, Steve Miloshev, publicly praised the performance improvements, reinforcing the belief that EXRO’s technology could revolutionize small electric vehicles.
By October 2020, EXRO publicly stated that “Motorino, one of the early partners, tested EXRO’s technology through 2020 against a standard electric bike in the field… EXRO will now start negotiations on a commercial product for 2021” Everything seemed to be progressing towards commercialization.
The Quiet End of the Partnership
However, by early 2021, EXRO’s messaging shifted. In the 2021-04-06 Annual MD&A report for 2020, EXRO subtly disclosed that it “will not be further commercializing its technology with Motorino at this time”. This statement was buried at the end of a paragraph discussing EXRO’s sales pipeline, making it easy to overlook.
Even more curious, the same document continued to highlight the successful field testing results from the Motorino partnership, without making it clear that the collaboration had already ended. Despite EXRO’s prior claims about negotiating a commercial product for 2021, there was no press release announcing the termination of the partnership. Instead, it was quietly swept into a footnote of EXRO’s ongoing developments.
A Pattern of Obfuscation?
This lack of transparency contributed to growing skepticism about EXRO’s claims and partnerships. Critics, including the Mariner short report, had already accused EXRO of a “pattern of obfuscation and exaggeration” when it came to its partnerships. The report pointed out that EXRO often overstated the commercial viability of its collaborations and provided misleading impressions of ongoing relationships.
In the case of Motorino, EXRO had aggressively promoted the partnership as proof of the Coil Driver’s effectiveness, only to quietly disengage without an official announcement. This raises questions about EXRO’s communication strategy and how it presents the status of its partnerships to investors and the public. Notably, this was not the *first and would not be the last time EXRO quietly ended a partnership without public acknowledgment.
* similar issues with transparency were noted in the Mariner report in relation to the one and done announcement of integration into a drone for a fortune 50 company and the quiet disappearance of the work with NWUAV
Lessons from the Motorino Partnership
While EXRO’s technology may have demonstrated real performance benefits, the way it handled the end of the Motorino partnership set a precedent for skepticism. The contrast between the heavily promoted early results and the discreet termination of the collaboration suggests a lack of full transparency.
For investors, this case serves as a reminder to critically assess EXRO’s partnership claims. As the company continues its push toward commercialization, it will be important to track not just the initial announcements but also the follow-through—or lack thereof—on its promises.
For our detailed history of the partnership, visit this page.
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