Ideanomics (NASDAQ: IDEX) (“Ideanomics” or the “Company”) is pleased to announce that auto dealers operating in its subsidiary, Mobile Energy Global’s (MEG) expo center in Qingdao, have sold 2,139 vehicles for a total value of RMB 235 Million or USD 33 Million. As a reminder, the MEG Center in Qingdao began operations on May 1. Based on the level of sales activity in the first week of June, this month’s sales are expected to exceed May levels. In China, the high season for car buying is from October to January. In its first five weeks of being operational, the dealers at the MEG Center have received high levels of interest, and management is optimistic that it can achieve its previously stated RMB 1 Billion sales target in 2020.
China, much like the rest of the world, has been negatively impacted by the shutdowns resulting from COVID-19. As the country has only begun to relax restrictions last month, many businesses are struggling to recover. The local government provided the facility rent-free to Ideanomics. Management felt that, during these unprecedented times, MEG should support local businesses and passed on savings from the government’s generosity by not charging commissions or rent to its dealers for the month of May. As MEG’s partners strengthen their financial positions, management will gradually implement its fee model starting in mid-June. Note that the May and early June sales were primarily used vehicles, and that MEG will be charging commissions for electric vehicles (EVs) with the manufacturers’ direct sale model. MEG’s total financing solutions will be available starting in July, and with its high-profit margins, should make a meaningful contribution to the Center’s profitability.
“The region loosened restrictions on business activities in early May, so we are very pleased with the Center’s high levels of activity at this early stage. The Center’s solid customer foot traffic indicates that the country’s economy is on a steady path to recovery and there is a strong appetite for passenger and commercial vehicle sales which bodes well for MEG,” said Ideanomics Chairman Dr. Bruno Wu. “The initial activity combined with the projected growth for the remainder of 2020 reinforces our belief that the MEG Center will be a material source of revenue for Ideanomics.”