Last week, we reported on the news of Gogoro's founder and CEO, Horace Luke, resigning over allegations of subsidy fraud by the company in its home market of Taiwan. We have now learned that the Taiwanese government has concluded that there is insufficient evidence to support fraud claims in an investigation related to a previous case of misidentified non-domestic components.
What was the story about? Electrek since then it was discovered that it was only one part of one model of electric scooters produced by Gogoro. What an insider described as a “supply chain error” meant that part of the company's VIVA model electric scooters used a single component that was produced abroad.
A similar case related to one of the parts used in the JEGO model electric scooter led to claims of subsidy fraud last week, because Gogoro had received large government subsidies intended for companies manufacturing products within Taiwan. However, as local media reported yesterday, the Ministry of Economic Affairs and Industrial Development announced its review results, stating that “there is not enough evidence” to conclude that the reported Gogoro VIVA model violated domestic production regulations.
Gogoro has spent years as a rising star, evolving into the de facto standard of battery replacement with over a million replacement batteries spread over hundreds of millions of battery replacements since its inception. Several hundred thousand batteries are replaced every day throughout its large network of users.
Its black and green battery packs are distributed at thousands of battery changing stations, each of which takes up less than one parking space but can service dozens of scooters almost simultaneously. Large substations can serve hundreds of electric vehicles.
Although Gogoro manufactures its own electric scooters, its battery design is open to other automakers, leading to major companies such as Yamaha and Aeon also producing electric scooters powered by Gogoro's battery standard.
Most of Gogoro's operations are in the domestic market of Taiwan, but the company has expanded to several other countries, including China, India, Indonesia, South Korea, the Philippines, Israel, Singapore, Chile, and Colombia.
Although the company's operations have grown significantly, its battery replacement model has proven expensive to expand. The company's net operating loss has grown over the past few quarters, and many have speculated that the resignation of founder and CEO Horace Luke had more to do with the company's financial performance than allegations of subsidy fraud.
The company is traded on the NASDAQ and has seen a steady decline in its share price over the past two years, with allegations of subsidy fraud last week causing another drop in price.
But hey, low stock price or not, my Gogoro scooter still works well as my daily driver. In fact, I just changed the batteries this afternoon.
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