The global transition towards %ElectricVehicles is well documented and regularly the subject of media headlines. A spate of financial incentives in combination with regulation mandates are part-and-parcel to a global playbook designed to steadily shift consumers and businesses away from fossil-fueled vehicles in favor of those using renewable, zero-emissions technologies, particularly rechargeable batteries. Investors should be taking note and aligning properly to capitalize.
Perhaps nothing exemplifies consumer uptake like the recent report from %Ford ($F) on November vehicle sales which showed a 7.8% decline in overall year-over-year sales, while sales of Ford electric models rose to 6,252, up 102.6% from November 2021.
In the U.S., about 5.1% (~525,000 out of 10.22 million) of all vehicles registered through the third quarter were all-electric models.
In Europe, 23.2% of new vehicles sold have a plug. During the first 10 months of 2022, BMW and Mercedes-Benz are the top sellers, followed by Volkswagen (OTC: VWAPY), Tesla (NASDAQ: TSLA), and Kia, which is 33.7% owned by Hyundai Motor Co. (OTC: HYMTF).
This speaks volumes to the idea that people are on board with the idea of swapping their gas guzzlers for tailpipe-free alternatives. Tesla remains the dominant brand in the U.S., but analysts see dozens of other nameplates cutting into their share with affordable models outfitted with comparable technologies. Tesla held nearly 80% of the market in 2020, a share that S&P Global Mobility foresees declining to under 20% by 2025.
That’s exactly the type of outlook that bodes well for %DSGGlobal ($DSGT), a company with a diversified portfolio that is differentiated from all other with EV assets. DSG Global built its flagship business in the golf industry and continues to expand its footprint in that space with premium carts, software-as-a-service/IT packages, and a new partnership with the vaunted Shelby Cobra brand, while it completes the requisite approval process to launch sales of the China-based Skywell Automotive Group’s lineup of EVs in the North American market under the Liteborne Motor Corp. brand. The Skywell agreement eliminates years and hundreds of millions of dollars in R&D and manufacturing costs for DSG and provides an immediate go-to-market opportunity with a proven brand that can leverage the expertise of both management teams, for which DSG just added several heavy hitters to lead its EV division.
Independent of each other, DSG Global’s golf and EV divisions are formidable opportunities, but combined, they represent a true anomaly in the microcap world. The golf business is disrupting the oligopoly of golf cart leaders, while the EV unit could see sales immediately erupt based upon the number of deposits already received.
2022 was a year of significant development for DSG, as it installed new key pieces of management, forged new partnerships, launched new products, increased sales, and created the Liteborne and Aurium SEV (sport electric vehicle) brands. 2023 is going to get off with a bang too, as the company shows off its newest golf carts, including the first ever single-rider model (SR1) that could take the golf market by storm, at the PGA Merchandise Show in Orlando as it prepares for the first deliveries of the new Liteborne Aurium SEV, expected in mid-2023.
Playing Through the Golf Incumbents
DSG Global’s golf division is comprised of Vantage Tag Systems and AC %GolfCarts brands. The company has deep roots in the business dating back 25+ years when management pioneered the first GPS and Wi-Fi enabled platform as GPS Industries, which was acquired by Ingersoll-Rand’s (NYSE: IR) Club Car division in 2017. Club Car had been buying the Visage fleet management system of GPS Industries and installing it on their golf carts since 2014 before deciding to just buy the company, which speaks to the opportunity for DSG and its Vantage brand.
DSG is in the right spot. According to Fortune Business, the global golf cart market is projected to grow from $1.69 billion in 2021 to $2.55 billion in 2028, driven by demand across multiple applications, including short-range travel in parks, industrial areas, and colleges.
Vantage is recognized throughout the industry as a specialist in fleet management with patented analytics, mobile touch screen engagement and electric golf carts. This cutting-edge technology provides golf course operators a bevy of features, such as real-time cart tracking (security, monitor pace of play, etc.), vehicle control (geo-fencing to stop cart before it goes out of bounds, for example), and diagnostics (battery life, tire air pressure, etc.), tools that DSG has parlayed into other key areas in golf course management. Vantage’s Tag Turf brand brings all the award-winning Tag fleet management capabilities to any piece of turf equipment or utility vehicle. The company has monitored 200,000+ hours of usage to validate the benefits related to productivity, efficiency, and security.
Vantage brings the complete package to course managers, including financing and lease options.
For golfers, the carts are equipped with GPS and large screens to give all the pertinent golf information, including overview and flyover of hole, distance to green, hazards, look ahead features and much more. Moreover, Vantage carts can be equipped so players can order food and drinks from the screen and have the goods delivered right to the cart on the course. Vantage has recently released a new 10” high-definition Infinity touchscreen that can be steering wheel- or roof-mounted in portrait or landscape mode, whichever the course prefers.
Vantage is clearly differentiated from the golf cart incumbents: Club Car, E-Z Go, and Yamaha. Vantage’s new Fleet Pro golf cart is the most powerful on the market today, equipped with a long-range 105ah lithium battery pack and 5kw AC maintenance free motor. They also have the Vantage Tag GPS fleet management system built-in, auto park brake system and MacPherson strut front suspension supported by the industry’s first ever most comprehensive 7-year bumper to bumper warranty.
Outfitted with the best mechanical and communications technology today, Vantage carts have sexier aesthetics than the bland carts of the incumbents too, including 12” tires with sporty rims, bigger steering wheels, and convenience factors, like charging ports for electronics. Understanding that margins are in the screens (i.e., programmatic advertising) and fleet management tech, Vantage prices its premium carts at prices comparable to (or lower than) its competitors.
Usage at the U.S.’s more than 15,000 golf courses is simply a matter of exposure for Vantage, which it will get plenty of at its massive booth at next month’s PGA Merchandise Show.
At the PGA GOLF SHOW, golfers will get their first look at Vantage’s most innovative product yet, a single-seat cart branded “SR1”. Management has been relatively tight-lipped about all the features, which has excitement mounting about its unveiling. The company has exhaustively developed the SR1 to meet market demand and set the gold standard for single-rider carts. It is well documented that single-rider carts expedite play by allowing golfers to go their separate ways. The economics speak loudly to why golf courses will embrace the SR1: revenue share program, quicker play means more rounds and, thus, more revenue and profits.
When it comes to retail consumers, cart prestige is a tenet of golf cart communities and DSG has the granddaddy of them all with a relationship with the venerable Carroll Shelby brand. Shelby’s name will forever be synonymous with Ford high performance vehicles. The company sells Shelby brand golf carts exclusively through its AC Golf Carts division in 2, 4, and 6 seat configurations, and Shelby e-bikes each designed to reflect an emphasis on premium quality and build worthy of the Shelby name.
The company will have its E-Bikes, Shelby GT500 and Shelby Cobra models on display at the PGA Merchandise Show.
The go-forward plan is for DSG to appoint approximately 150 dealers in North America to sell and service the full array of Vantage Tag and AC Golf Carts products, including the upcoming SR1 and new Fleet carts expected to light up the market. These dealers will be complemented by DSG’s own assembly and sales offices, and by online sales.
Millions in Sales Already
The newly launched products are fresh revenue streams for DSGT. During the third quarter ended September 30, 2022, the company reported revenue of $1.43 million, up 186% from $498,380 in Q3 2021. Sales for the first nine months of 2022 totaled $3.34 million, compared to $1.38 million for the comparable period in 2021, an improvement of 142%.
DSG Global said it could have realized more revenue ($4.2 million in contracts were signed in the first nine months of 2022), but delays in supply chain activity that have been a bane in the side of the world since the pandemic pushed some revenue back.
Here Comes Liteborne
For most retail investors, getting an early position amidst a global paradigm shift proves quite elusive. Companies like %Rivian ($RIVN) and %Nikola ($NKLA) had huge valuations at the time of coming public and mostly have disappointed anyone buying post-IPO. However, that is not the case with DSGT, as the downside is arguably limited given its $8 million valuation and 5 cents per share price.
Plus, it isn’t going to take Liteborne billions of dollars and a decade of development to bring an EV to consumers.
During the third quarter, DSG Global launched its Liteborne Motor Company brand and Aurium SEV (sport electric vehicle), which is being lauded as “the best value luxury electric car on the market.” Liteborne has the exclusive rights to distribute the innovative Skywell Automotive Group lineup of EVs in the North American market. Skywell is one of the premier EV manufacturers in China, with a full range of advanced passenger vehicles, large and medium-sized buses, light buses, logistics vehicles, and special purpose automobiles.
This relationship cannot be understated as a demonstration of the business acumen of DSGT management. Once the homologation process is complete – expected in Q2 2023 – Liteborne is instantly a market participant. Effectively, they will unload vehicles manufactured using all the Skywell resources and put them in dealerships in North America under the Liteborne brand. That means Liteborne leapfrogs the hundreds of manufacturers sporting large valuations that are still years away from delivering a vehicle to the market.
To that point, it is not surprising that DSG Global is exploring a potential spinout of Liteborne and a possible IPO or merger to a listing on the Nasdaq exchange. Regardless of the path chosen, DSGT shareholders will have ownership in one of the newest EV companies making sales in a market that, as mentioned, pundits expect to be very receptive to quality new brands.
By all early signs, the sales are going to be robust. Liteborne has received 1,500 refundable deposits for its SEV, which translates to approximately $62 million in bookable revenue once delivered.
Key Adds as Plan Takes Shape
As it finalizes the homologation process (nomenclature for regulatory approval of the sale of a car, boat, or engine in a particular market), Liteborne has recruited seasoned vets for its C-suite.
Notably, Alan Wagner has been appointed Chief Executive Officer of Liteborne Motor Corp. Wagner has extensive expertise and reach across the automotive industry with a C.V. that includes serving as executive director of Hyundai Transys and vice president of product development for Mercedes Benz Tech. Before that, he held multiple executive positions with Lear Corporation. He was the vice president of engineering at Saleen Automotive/SMS Supercars and executive vice president of Saleen Electric. Wagner was also vice president of Entech. Through the years, he has worked with General Motors, Ford, Shelby, Petty Enterprises, Toyota, Chrysler, and BMW among other iconic automotive brands.
What is particularly interesting here is how Robert Silzer, CEO of DSG Global, and Wagner became acquainted. Wagner is good friends with auto industry icon Sandy Munro, who wanted to show Wagner a Skywell EV that he was reviewing for one of his broadcasts. Wagner was incredibly impressed with the car and when he was presented the opportunity to lead Liteborne and work closely with Skywell, he leapt at the chance. “I’m here to maximize the company’s potential along with a great team…Liteborne is on the move,” commented Wagner.
Two other significant additions to the team include Jonathan D’Agostino as Chief Financial Officer and Daniel Lock, who is serving as executive director of operations and homologation.
During 30+ years in finance and consulting, D’Agostino was a former investment and merchant banker with Lehman Brothers where, among his many accomplishments, he partnered with Nobel Prize winner, Professor Luc Montagnie, in commercializing the professor’s preventative healthcare business. After co-founding Beachside Capital, he became 25% owner of XL Airways which operated out of France and Germany. Upon sale of the airline, he left Beachside to pursue entrepreneurial interests. Among many accomplishments, he helped design a product which creates green hydrogen on demand for automobiles. He then became CEO of Emit-Less, formed to begin testing and commercializing a product known as HydroBoost.
Lock is a 20-year veteran of automotive development and engineering management. He recently held the position of senior manager of program management at Hyundai Transys. Prior to that, he served as program planning manager at Gentherm and was a product design engineer at Visteon.
The new executive team is planning a trip to China to finalize a marketing plan with Skywell leadership. New carts, new cars, and new team. 2023 should be interesting for DSGT.
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