10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended: March 31, 2023 OR
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ______ to _______.

Commission file number: 001-38612

ELECTRAMECCANICA VEHICLES CORP.

(Exact name of registrant as specified in its charter)

British Columbia, Canada	98-1485035
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

8057 North Fraser Way

Burnaby, British Columbia, Canada, V5J 5M8

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code (604) 428-7656

Securities registered under Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Shares, without par value Warrants, each to purchase one Common Share	SOLO SOLOW	The Nasdaq Stock Market LLC The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

The registrant had 119,287,917 common shares outstanding as of May 9, 2023.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	Page
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
	Condensed Consolidated Statement of Operations and Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Balance Sheets (Unaudited)	6
	Condensed Consolidated Statement of Cash Flows (Unaudited)	7
	Condensed Consolidated Statements of Equity (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 4.	Mine Safety Disclosures	26
Item 6.	Exhibits	27
Signature		28

2

Forward-Looking Statements

This Quarterly Report  of ElectraMeccanica Vehicles Corp. (“we,” “us,” “our,” “ElectraMeccanica” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and delivery of products in the future, including the E4 (as defined in this Quarterly Report); projected costs; expected production capacity; expectations regarding demand and acceptance of our products; estimated costs of machinery to equip a new production facility; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; trends relating to our industry; plans relating to our recall of SOLO electric vehicles (“EVs”); the impact and resolution of legal matters, including those relating to the termination of the Manufacturing Agreement (as defined in this Quarterly Report) with Chongqing Zongshen Automobile Industry Co., Ltd. (“Zongshen”); and plans and intentions to regain compliance with the listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), including, among other things, through a reverse stock split.

We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional Factors that could contribute to such differences include, but are not limited to:

● general economic and business conditions, including changes in interest rates;

● prices of other EVs, costs associated with manufacturing EVs and other economic conditions;

● the effect of an outbreak of disease or similar public health threat, such as the COVID-19 pandemic, on the Company’s business (natural phenomena, including the current COVID-19 pandemic);

● the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise;

● the ability of our information technology systems or information security systems to operate effectively;

● actions by government authorities, including changes in government regulation;

● uncertainties associated with legal proceedings;

● changes in the size of the EV market;

● future decisions by management in response to changing conditions;

● the Company’s ability to execute prospective business plans;

● misjudgments in the course of preparing forward-looking statements;

● the Company’s ability to raise sufficient funds to carry out its proposed business plan;

● the Company’s ability to successfully execute a buy-back program for retailed SOLO vehicles subject to recall;

3

● the Company’s plan to develop, manufacture, market and profitably sell a new four-wheeled SOLO alternative (the “Project E4” or “E4”);

● the Company’s ability to successfully and profitably assemble contracted third-party native-EV designs using the Company’s Mesa, Arizona, facility;

● developments in alternative technologies or improvements in the internal combustion engine;

● inability to keep up with advances in EV and battery technology;

● inability to design, develop, market and sell new EVs and services that address additional market opportunities to generate revenue and positive cash flows;

● dependency on certain key personnel and any inability to retain and attract qualified personnel;

● inexperience in mass-producing EVs;

● inability to succeed in establishing, maintaining and strengthening the ElectraMeccanica brand;

● disruption of supply or shortage of raw materials;

● the unavailability, reduction or elimination of government and economic incentives;

● failure to manage future growth effectively; and

● the other risks and uncertainties detailed from time to time in our filings with the Security and Exchange Commission (“SEC”), including but not limited to those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on April 17, 2023 (the “2022 Form 10-K”).

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to our Company or persons acting on our Company’s behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.

4

PART I

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ELECTRAMECCANICA VEHICLES CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Revenue	$	504,427	$	1,038,643
Cost of revenue		407,650		2,942,136
Gross profit (loss)		96,777		(1,903,493)
Operating expenses
General and administrative expenses		8,878,971		8,733,578
Research and development expenses		2,583,703		4,671,100
Sales and marketing expenses		2,339,300		3,002,855
		13,801,974		16,407,533
Operating loss		(13,705,197)		(18,311,026)
Other non-operating income (expense)
Interest income		1,438,838		86,245
Changes in fair value of derivative liabilities		—		122,425
Other income (expense), net		(24,410)		42,409
Foreign exchange gain (loss)		(20,865)		94,340
Loss before taxes		(12,311,634)		(17,965,607)
Current income tax expense		—		—
Net loss	$	(12,311,634)	$	(17,965,607)
Other comprehensive income (loss)
Foreign currency translation adjustments		37,307		(5,850)
Comprehensive loss	$	(12,274,327)	$	(17,971,457)
Loss per share – basic and diluted	$	(0.10)	$	(0.15)
Weighted average number of shares outstanding – basic and diluted		119,287,917		118,451,752

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

ELECTRAMECCANICA VEHICLES CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	111,209,820	$	134,255,538
Receivables, net		275,682		273,958
Prepaid expenses and other current assets		15,184,153		11,390,850
Inventory, net		4,286,597		4,233,055
Total current assets		130,956,252		150,153,401
Restricted cash		1,715,711		515,449
Plant and equipment, net		16,393,277		16,452,477
Operating lease right-of-use assets		8,559,312		9,031,277
Other assets		4,611,172		5,093,825
Total assets	$	162,235,724	$	181,246,429
Current liabilities
Trade payables and accrued liabilities		11,681,338		19,346,470
Customer deposits		240,008		339,744
Current portion of lease liabilities		1,288,398		810,677
Contract termination liability		15,700,000		15,700,000
Total current liabilities		28,909,744		36,196,891
Share-based compensation liability		58,248		76,476
Lease liabilities		17,220,314		17,528,282
Deferred revenue		119,253		119,253
Total liabilities		46,307,559		53,920,902
Commitments and contingencies
Shareholders’ equity
Share capital - without par value, unlimited shares authorized; 119,287,917 shares issued and outstanding as of March 31, 2023 and December 31, 2022		396,441,435		395,564,470
Accumulated other comprehensive income		4,603,532		4,566,225
Accumulated deficit		(285,116,802)		(272,805,168)
Total shareholders’ equity		115,928,165		127,325,527
Total liabilities and shareholders’ equity	$	162,235,724	$	181,246,429

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

ELECTRAMECCANICA VEHICLES CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(12,311,634)	$	(17,965,607)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		926,564		1,171,335
Stock-based compensation expense		874,879		1,206,547
Inventory provision		—		1,451,336
Change in fair value of derivative liabilities		—		(122,425)
Unrealized currency translation gain		(787)		—
Changes in operating assets and liabilities:
Receivables		(1,724)		214,421
Prepaid expenses and other assets		(3,705,734)		(6,469,784)
Inventory		(53,542)		(4,119,368)
Trade payables and accrued liabilities		(7,466,304)		(1,839,931)
Operating lease liabilities		639,268		(3,837)
Customer deposits		(99,955)		17,231
Net cash used in operating activities		(21,198,969)		(26,460,082)
Cash flows from investing activities
Expenditures on plant and equipment		(670,876)		(1,068,392)
Net cash used in investing activities		(670,876)		(1,068,392)
Cash flows from financing activities
Proceeds from / (payment for) issuance of common shares for RSU settlement		—		(20,786)
Payment for DSU settlement		(16,143)		—
Proceeds from issuance of common shares for options exercised		—		295,516
Net cash provided by (used in) financing activities		(16,143)		274,730
Decrease in cash and cash equivalents and restricted cash		(21,885,988)		(27,253,744)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		40,532		(5,850)
Cash and cash equivalents and restricted cash, beginning		134,770,987		222,219,684
Cash and cash equivalents and restricted cash, ending	$	112,925,531	$	194,960,090

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

ELECTRAMECCANICA VEHICLES CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

				Accumulated
				Other
	Share capital			Comprehensive		Accumulated
	Number of shares	Amount		Income		Deficit		Total Equity
Balance at December 31, 2022	119,287,917	$	395,564,470	$	4,566,225	$	(272,805,168)	$	127,325,527
Stock-based compensation	—		876,965		—		—		876,965
Net loss	—		—		—		(12,311,634)		(12,311,634)
Foreign currency translation	—		—		37,307		—		37,307
Balance at March 31, 2023	119,287,917	$	396,441,435	$	4,603,532	$	(285,116,802)	$	115,928,165

				Accumulated
				Other
	Share capital			Comprehensive		Accumulated
	Number of shares	Amount		Income		Deficit		Total Equity
Balance at December 31, 2021	117,338,964	$	390,290,103	$	4,501,800	$	(149,106,655)	$	245,685,248
Shares issued pursuant to exercise of options	1,245,455		295,516		—		—		295,516
Shares issued pursuant to settlement of RSU	27,077		(20,786)		—		—		(20,786)
Stock-based compensation	—		1,109,266		—		—		1,109,266
Net loss	—		—		—		(17,965,607)		(17,965,607)
Foreign currency translation	—		—		(5,850)		—		(5,850)
Balance at March 31, 2022	118,611,496	$	391,674,099	$	4,495,950	$	(167,072,262)	$	229,097,787

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Nature and continuance of operations

ElectraMeccanica Vehicles Corp. was incorporated on February 16, 2015, under the laws of the province of British Columbia, Canada, and its principal activity is the development and manufacturing of EVs.

The head office and principal address of the Company are located at 8057 North Fraser Way, British Columbia, Canada, V5J 5M8.

These unaudited condensed consolidated financial statements have been prepared on the assumption that the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.  The Company’s continuation is dependent upon the successful results from its EV assembly activities and ability to launch a new 4-wheel electric passenger vehicle, “Project E4”, and generate profitable operations therefrom.

Beginning in August 2020, the Company has designed, assembled, and sold a unique, three-wheeled, single-seat commuter electric vehicle, the SOLO. On February 17, 2023, the Company announced a voluntary recall of the SOLO due to an unidentified technical issue that resulted in loss of propulsion while driving in certain vehicles at certain times. On April 14, 2023, the Company decided to repurchase all 429 previously retailed SOLO vehicles to ensure the safety of our customers.

The Company has been in discussions with Zongshen to end the Manufacturing Agreement for the SOLO, and on May 8, 2023, entered into a settlement agreement with Zongshen relating to the Manufacturing Agreement (see Note 20 for additional information).

In December 2022, the Company decided to assemble other companies’ EVs to further leverage the resources and capabilities of its recently commissioned and state-of-the-art 235,000 square foot facility located in Mesa, Arizona.  The Company aims to manufacture it’s E4’s in the Mesa facility.

Management intends to finance its operations over the next 12 months principally using existing cash on hand and may supplement by additional funding through private placements and/or public offerings of equity capital or debt, provided that such funding can be obtained on terms that are commercially competitive and on terms acceptable to the company.

2.Basis of presentation and summary of significant accounting policies

Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of ElectraMeccanica Vehicles Corp. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual audited financial statements. All inter-company balances and transactions have been eliminated.

The unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 should be read in conjunction with the consolidated financial statements and accompanying notes included in the 2022 Form 10-K. The unaudited condensed consolidated balance sheet as of December 31, 2022, was derived from audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The operating results for the quarter ended March 31, 2022 reflect the retrospective adoption of U.S. GAAP which was reflected in the 2022 Form 10-K. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included in the 2022 Form 10-K.

9

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Use of estimates

The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, estimating the write down of inventory to net realizable value, estimating the recall provision, and estimating the contingent liabilities for contract termination. Management estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates.

Segment reporting

The Company continually monitors and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact its reportable operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. The chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. Up until the fourth quarter of 2022, the Company managed, reported and evaluated its business in the following two reportable operating segments: (i) Electric Vehicles and (ii) Custom Built Vehicles. During the fourth quarter of 2022, the CODM changed how she makes operating decisions, assesses the performance of the business and allocates resources in a manner that caused the Company’s operating segments to change as a result of the Company having stopped receiving orders for custom built vehicles. In consideration of Financial Accounting Standards Board’s Accounting Standards Codification 280, Segment Reporting, the CODM determined that the Company is not organized around specific products and services, geographic regions or regulatory environments. Accordingly, beginning with the fourth quarter of 2022, the Company realigned its reporting structure, resulting in a single reportable segment, Electric Vehicles, in the United States.

3.Cash and cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

	March 31, 2023		December 31,2022
Cash and cash equivalents	$	111,209,820	$	134,255,538
Restricted cash		1,715,711		515,449
Total cash, cash equivalents and restricted cash	$	112,925,531	$	134,770,987

The Company’s restricted cash as of March 31, 2023 and December 31, 2022 consists of certificates of deposits related to the Company's corporate credit card program and bank issued letter of credit.

4.Prepaid expenses and other current assets

	March 31, 2023		December 31,2022
SOLO vehicle deposit (at supplier)	$	7,133,451	$	7,133,451
Battery cell deposit		247,036		300,000
Prepaid insurance		1,531,542		1,095,152
Prepaid rent and security deposit		480,330		495,112
Cloud computing assets		1,373,030		1,234,039
Other prepaid expenses		4,418,764		1,133,096
	$	15,184,153	$	11,390,850

10

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

5.Inventory, net

The Company’s inventory, net consisted of the following:

	March 31, 2023		December 31, 2022
Parts and batteries	$	1,531,597	$	1,242,055
Vehicles		2,755,000		18,022,771
Inventory provision		—		(15,031,771)
	$	4,286,597	$	4,233,055

For the three months ended March 31, 2023, amounts of $nil was recognized as inventory write-downs (March 31, 2022 – $1,451,336). These charges are reflected in cost of revenue.

6.Plant and equipment

	March 31, 2023		December 31, 2022
Furniture and equipment	$	3,692,816	$	2,117,901
Computer hardware and software		1,307,981		1,381,786
Vehicles		689,739		1,046,817
Leasehold improvements		12,956,694		12,862,333
Production tooling and molds		904,332		1,956,743
Total plant and equipment		19,551,562		19,365,580
Less: accumulated depreciation		(3,158,285)		(2,913,103)
Plant and equipment, net	$	16,393,277	$	16,452,477

During the three months ended March 31, 2023 and 2022, depreciation expense of $582,903 and $1,036,283, respectively, was recorded within general and administrative expenses.

During the three months ended March 31, 2023, $949,554 of production tooling was transferred to furniture and equipment upon completion of certain assets. The Company also disposed of assets which primarily consisted of demonstration vehicles and computer equipment. These items were scrapped due to the Company’s planned relocation of its Burnaby, BC, Canada headquarters which is anticipated to take place in the second quarter of 2023. The loss on this disposal was $93,367 and is recorded within other income (expense), net in the condensed consolidated statement of operations and comprehensive loss.

7.Other assets

	March 31, 2023		December 31, 2022
Security deposit	$	1,161,000	$	1,161,000
Cloud computing assets		3,438,216		3,920,869
Intangible assets		11,956		11,956
	$	4,611,172	$	5,093,825

During the three months ended March 31, 2023 and 2022, amortization of $343,661 and $134,071, respectively, was recorded for capitalized cloud computing assets within general and administrative expenses within the condensed consolidated statement of operations and comprehensive loss.

11

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

8.Trade payables and accrued liabilities

	March 31, 2023		December 31, 2022
Trade payables	$	374,982	$	3,795,772
Recall provision		8,915,044		8,915,044
Accrued liabilities		2,391,312		6,635,654
	$	11,681,338	$	19,346,470

On February 17, 2023, the Company announced a voluntary recall of the SOLO. On April 14, 2023, the Company issued a stop-drive and stop-sell notice and has notified customers of a vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021. The basis of the recall was due to the vehicle potentially experiencing a loss of propulsion while driving. As of March 31, 2023 and December 31, 2022, a recall provision of $8,915,044 was recorded as an estimate of the cost to buy-back all retailed vehicles, which was included in trade payables and accrued liabilities within the Company’s condensed consolidated balance sheet.

9.Leases

The Company has operating leases for its engineering center, corporate offices, manufacturing warehouse facility, and kiosk locations. These leases span a period of one to eleven years.

The components of lease expense, included within general and administrative expenses and sales and marketing expenses are as follows within the Company’s condensed consolidated statements of operations and comprehensive loss:

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Operating lease expense
Operating lease expense	$	848,620	$	286,878
Short-term lease expense		338,875		388,920
	$	1,187,495	$	675,798

	March 31, 2023		December 31, 2022
Weighted average remaining operating lease term (in years)	8.88		9.41
Weighted average operating lease discount rate	10.29	%	10.28	%

As of March 31, 2023, the maturities of the Company’s operating lease liabilities (excluding short-term leases) are as follows:

2023 (remaining nine months)	$	2,363,196
2024		3,004,150
2025		2,933,878
2026		2,996,552
2027		2,748,958
Thereafter		15,706,015
Total minimum lease payments		29,752,749
Less: interest		11,244,037
Present value of lease obligations		18,508,712
Less: Current portion		1,288,398
Long-term portion of lease obligations	$	17,220,314

12

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

10.Contract termination liability

On September 29, 2017, the Company entered into a manufacturing agreement with Zongshen, which was amended on June 23, 2021 (as amended, the “Manufacturing Agreement”).  Pursuant to the Manufacturing Agreement, Zongshen agreed to manufacture the Company’s SOLO vehicles, and the Company agreed to certain target purchase volumes for the period from June 1, 2021, to November 30, 2023.

On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles. As a result, Zongshen claimed $22.8 million in relation to the termination of the Manufacturing Agreement.  The Company was working together with legal counsel on achieving an agreement for the termination of the Manufacturing Agreement. The Company estimated a $15.7 million termination provision, representing the Company’s best assessment of the settlement amount, which is presented as a contract termination liability within the Company’s condensed consolidated balance sheets. On February 16, 2023, the Company gave notice to Zongshen of potential claims against it for supplying defective products, which Zongshen has denied.  On May 8, 2023, the Company entered into a settlement agreement with Zongshen relating to the Manufacturing Agreement (see Note 20 for additional information).

11.Share capital and other components of equity

Share capital

The Company is authorized to issue an unlimited number of common shares without par value.

The Company is authorized to issue an unlimited number of preferred shares without par value.

As of both March 31, 2023 and December 31, 2022, the Company had 119,287,917 issued and outstanding common shares and nil preferred shares.

Share options exercised

During the three months ended March 31, 2023, the Company issued no common shares for options exercised by option holders (March 31, 2022 – 1,245,455 shares for proceeds of $295,516).

RSUs settled

During the three months ended March 31, 2023, no restricted share units (“RSUs) vested. During the three months ended March 31, 2022, the Company issued 27,077 common shares in connection with the vesting of RSUs and decreased share capital by $20,786.

Warrants

On exercise, each warrant allows the holder to purchase one common share of the Company, including on a cashless basis, based on the formula as set forth in the applicable warrant agreement

13

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Warrants of the Company classified as equity are composed of the following as at March 31, 2023:

	Number of warrants	Number of warrants
Date of issuance	outstanding	exercisable	Exercise price		Expiry date
October 31, 2017	125,000	125,000	$	15	October 31, 2024
August 8, 2018	4,513,253	4,513,253	$	4.27	August 8, 2023
November 9, 2018	7,440	7,440	$	3.2	November 9, 2023
November 9, 2018	749,788	749,788	$	2.56	May 9, 2024
	5,395,481	5,395,481

12.Stock-based compensation

Under the Company’s share-based payment arrangements, a total stock-based compensation of $874,879 and $1,206,547 was recognized in the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022, respectively.

	Three months ended		Three months ended
Share-based compensation expense recorded in	March 31, 2023		March 31, 2022
General and administrative expenses	$	771,940	$	1,073,717
Research and development expenses		64,275		161,480
Sales and marketing expenses		38,664		(28,650)
	$	874,879	$	1,206,547

Stock options

The Company adopted its 2020 Stock Incentive Plan (the “Stock Incentive Plan”) on July 9, 2020, which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company certain stock-based compensation awards including non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 30,000,000. Such stock options may be exercisable for a period of up to 10 years from the date of grant. Stock options may be exercised no later than 90 days following cessation of the optionee’s position with the Company unless any exercise extension has been approved in advance by the administrator of the Stock Incentive Plan.

Stock options granted may vest based on the terms and conditions set out in the applicable stock option agreement. On exercise, each stock option allows the holder to purchase one common share of the Company, including on a cashless basis, based on the formula as set forth in the applicable stock option agreement.

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ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Details of stock options outstanding as at March 31, 2023 were as follows:

	Weighted average	Number of options	Number of options
Exercise price	contractual life	outstanding	exercisable
$2.00 CAD	1.18	65,000	65,000
$0.535 USD	6.98	500,000	—
$0.99	6.81	215,367	62,812
$1.08	6.56	297,050	105,198
$1.11	6.69	3,750,000	—
$1.50	6.34	674,815	340,382
$1.91	2.80	2,955,000	2,802,225
$1.94	6.05	154,338	73,948
$2.13	5.85	48,407	25,205
$2.45	3.35	1,250,000	1,250,000
$2.53	3.36	50,000	50,000
$2.62	0.48	700,000	700,000
$3.01	1.68	750,000	750,000
$3.40	2.12	1,035,000	1,035,000
$3.41	4.31	549,922	505,343
$3.55	5.30	5,000	2,835
$3.56	5.62	150,861	88,742
$3.77	1.68	50,000	50,000
$4.15	1.68	750,000	750,000
$5.00	0.67	193,629	193,629
$7.75	4.89	30,000	23,125
$9.60	1.77	50,000	50,000
		14,224,389	8,923,444

The fair value of options granted has been estimated using the Black-Scholes option pricing model and based on the weighted average of certain assumptions. See Note 6 in the consolidated financial statements and accompanying notes included in the 2022 Form 10-K for additional information regarding such assumptions.

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $661,652 and $905,522, respectively, relating to stock options granted.

DSUs

Deferred Stock Units (“DSUs”) are stock-based awards that may be granted by the Company to certain eligible participants pursuant to the Stock Incentive Plan. The Company allows the holders of the DSUs to settle the DSUs in cash or common shares. During the three months ended March 31, 2023 and 2022, the Company issued nil DSUs.

The number and weighted average share prices of DSUs was as follows at March 31, 2023 and December 31, 2022:

	March 31, 2023			December 31, 2022
	Number of		Weighted average	Number of		Weighted average
	DSUs	share price		DSUs	share price
DSUs outstanding	111,231	$	3.16	127,460	$	3.02
DSUs exercisable	111,231	$	3.16	127,460	$	3.02

The fair value of the DSUs liabilities was estimated using the stock price as of March 31, 2023 and December 31, 2022.

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ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation of $nil and $97,280, respectively, relating to DSUs granted.

RSUs

RSUs are stock-based awards that may be granted by the Company to certain eligible participants pursuant to the Stock Incentive Plan. RSUs are accounted for as equity-settled share-based payment transactions as the obligations under an RSU will be settled through the issuance of common shares.

Details of RSUs outstanding as at March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023			December 31, 2022
	Number of	Weighted average		Number of
	RSUs	share price		RSUs	Deemed value
RSUs outstanding	1,875,000	$	1.02	1,875,000	$	1.02
RSUs exercisable	—	$	—	—	$	—

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $213,227 and $203,745, respectively, relating to RSUs granted.

13.Revenue

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Revenue	$	504,427	$	1,038,643

The Company generates revenue primarily through the sale of EVs as well as parts sales, services, repairs, and support services. The Company recognizes revenue related to the vehicle when the customer obtains control of the vehicle which occurs at a point in time either upon completion of delivery to the agreed upon delivery location or upon pick up of the vehicle by the customer.

14.Interest income

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Interest income	$	1,438,838	$	86,245

Interest income relates to interest earned on cash deposited in the Company’s bank accounts.

15.Current income tax expense

As of March 31, 2023 and December 31, 2022, the Company’s deferred tax liability was zero. Cumulative deferred tax assets are fully reserved as there is not sufficient evidence to conclude it is more likely than not the deferred tax assets are realizable. No current liability for federal state income taxes has been included in these condensed consolidated financial statements due to the loss for the periods.

16

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

16.Basic and Diluted loss per share

The calculation of basic and diluted loss per share for the three months ended March 31, 2023 and 2022 was based on the net loss attributable to common shareholders of $12,311,634 and $17,965,607, respectively, and the weighted average number of common shares outstanding of 119,287,917 and 118,451,752, respectively. For the three months ended March 31, 2023, diluted loss per share did not include the effect of 14,224,389 stock options, 5,395,481 warrants, 111,231 DSUs and 1,875,000 RSUs, as the effect would have been anti-dilutive. For the three months ended March 31, 2022, diluted loss per share did not include the effect of 11,151,488 stock options, 7,158,021 warrants, 93,956 DSUs and 522,385 RSUs, as the effect would have been anti-dilutive.

	Three months ended March 31, 2023		Three months ended March 31, 2022
Net loss	$	(12,311,634)	$	(17,965,607)
Weighted average number of shares outstanding – basic and diluted		119,287,917		118,451,752
Loss per share – basic and diluted	$	(0.10)	$	(0.15)

17.Segment information

During the three months ended March 31, 2023, the Company operated in one reportable business segment, Electric Vehicles, in Canada and the United States. The Company no longer includes custom built vehicles as a reportable business segment because it ceased production of such vehicles in December 2022. Supplemental geographic data has been provided below:

	Three months ended March 31, 2023				Three months ended March 31, 2022
			Custom Built				Custom Built
	Electric Vehicles		Vehicles		Electric Vehicles		Vehicles
Revenue	$	504,427	$	—	$	871,945	$	166,698
Gross profit		(96,777)		—		(1,897,180)		(6,313)
Depreciation and amortization		(926,564)		—		(1,159,739)		(11,596)
Operating expenses		(12,875,410)		—		(15,179,365)		(56,833)
Other items		1,393,563		—		317,598		27,821
Current income tax recovery		—		—		—		—
Deferred income tax recovery		—		—		—		—
Net (loss)/income		(12,311,634)		—		(17,918,686)		(46,921)
FX translation		37,307		—		471		(6,321)
Comprehensive (loss)/income	$	(12,274,327)	$	—	$	(17,918,215)	$	(53,242)

	March 31, 2023				December 31, 2022
	Electric		Custom Built		Electric		Custom Built
	Vehicles		Vehicles		Vehicles		Vehicles
Inventory	$	4,286,597	$	—	$	4,233,055	$	—
Plant and equipment, net		16,393,277		—		16,452,477		—
Operating lease right-of-use assets		8,559,312		—		9,031,277		—
Other assets		4,611,173		—		5,093,825		—
Total assets	$	162,235,725	$	—	$	181,186,106	$	60,323

17

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Sales to unaffiliated customers:

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
United States	$	504,427	$	940,134
Canada		—		98,509
Total	$	504,427	$	1,038,643

Plant and equipment and right-of-use assets:

	March 31, 2023		December 31, 2022
United States	$	22,743,701	$	23,113,904
Canada		2,206,059		2,366,861
Other foreign countries		2,829		2,989
Total	$	24,952,589	$	25,483,754

18.Fair value

The following table presents the hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of March 31, 2023:

	Level 1		Level 2		Level 3		Total
Liabilities:
Share-based compensation liability	$	—	$	58,248	$	—	$	58,248

The following table presents the hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of December 31, 2022:

	Level 1		Level 2		Level 3		Total
Liabilities:
Share-based compensation liability	$	—	$	76,476	$	—	$	76,476

Financial liabilities measured at fair value as of March 31, 2023 consisted of the non-transferrable warrants denominated in Canadian dollars (“CAD”) and DSUs. The fair values of DSUs and the non-transferrable warrants are both classified as Level 2 in the fair value hierarchy.

The fair value of the DSUs was measured using the quoted market price for common shares of the Company on the Nasdaq exchange.

The fair value of the non-transferrable warrants denominated in CAD were calculated using the Black-Scholes option pricing model using the historical volatility of comparable companies as an estimate of future volatility. As of March 31, 2023 and December 31, 2022, if the volatility used was increased by 10%, the impact would be a $nil increase to derivative liabilities.

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ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

19.Commitments and contingencies

Commitments

On February 17, 2023, the Company announced a voluntary recall of the SOLO. On April 14, 2023, the Company issued a stop-drive and stop-sell notice and has notified customers of a vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021. The basis of the recall was due to the vehicle potentially experiencing a loss of propulsion while driving.  As of March 31, 2023 and December 31, 2022, a recall provision of $8,915,044 was recorded as an estimate of the cost to buy-back all retailed vehicles, which was included in trade payables and accrued liabilities within the Company’s condensed consolidated balance sheet.

On March 3, 2023, the Company entered into a Design and Supply Agreement (the “Design Agreement”) with GLV, LLC (“GLV”), pursuant to which GLV will provide design, development, and manufacturing services for the planned E4, the Company’s anticipated 4-wheel electric passenger vehicle. The estimated cost as set out in the Design Agreement is $13,692,000, where 80% will be paid during 2023 with the remaining costs to be paid in 2024. The Company may terminate the Design Agreement upon 30 days written notice to GLV under special circumstances or due to breach of contract. The Company will be responsible for the costs of any finished and conforming products delivered to the Company as well as the costs of the required materials on hand at GLV’s purchase price. As of March 31, 2023 and December 31, 2022, the Company had $9,584,400 and $nil commitments, respectively, under the Design Agreement.

Contingencies

In the ordinary course of business, the Company may from time to time become subject to legal proceedings and claims arising in connection with ongoing business activities. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially affect the Company’s results of operations, financial condition, or cash flows. In addition, regardless of the outcome, litigation could have an adverse impact on the Company as a result of legal fees, the diversion of management’s time and attention and other factors.

On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles. As a result, Zongshen claimed $22.8 million in relation to the termination of the Manufacturing Agreement and Extension Agreement. The Company was working together with legal counsel on achieving an agreement for the termination of the Manufacturing Agreement. The Company estimated a $15.7 million termination provision, representing the Company’s best assessment of the settlement amount, which is presented as a contract termination liability within the Company’s consolidated balance sheets. On February 16, 2023, the Company gave notice to Zongshen of potential claims against it for supplying defective products, which Zongshen has denied. On May 8, 2023, the Company entered into a settlement agreement with Zongshen relating to the Manufacturing Agreement (see Note 20 for additional information).

20.Subsequent events

On April 14, 2023, the Company issued a stop-drive and stop-sell notice and has notified customers of a vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021. The basis of the recall was due to the vehicle potentially experiencing a loss of propulsion while driving. As of March 31, 2023 and December 31, 2022, a recall provision of $8,915,044 was recorded as an estimate of the cost to buy-back all retailed vehicles, which was included in trade payables and accrued liabilities within the Company’s condensed consolidated balance sheet.

On May 8, 2023, the Company entered into a settlement deed (the “Settlement Agreement”) with Zongshen, effective as of May 4, 2023. The Settlement Agreement resolves all outstanding claims relating to the Manufacturing Agreement and the related cancellation notice and defective notice provided by the Company to Zongshen (collectively, the “Agreement and Notices”). Pursuant to the Manufacturing Agreement, Zongshen had agreed to manufacture the Company’s SOLO vehicles, and the Company agreed to certain target purchase volumes for the period from June 1, 2021 to November 30, 2023.

19

ELECTRAMECCANICA VEHICLES CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Pursuant to the Settlement Agreement, the Company has agreed, among other things, to (i) pay Zongshen $8.0 million in cash, (ii) forfeit $7.1 million in previously paid deposits to Zongshen, which are currently included in prepaid expenses and other current assets on the consolidated balance sheet as of March 31, 2023 (see Note 4), and (iii) provide Zongshen $1.0 million in the form of claims to certain agreed upon vendor owned vehicle parts, in full and final settlement, satisfaction, discharge and release of all claims that were or could have been brought relating to the Agreement and Notices. The Company will receive an additional129 G3 SOLO vehicles. The Company is required to pay the cash portion of the settlement amount within 10 business days of the effective date of the Settlement Agreement. The parties have also agreed to provide mutual releases of all claims relating to the Agreement and Notices. Additionally, the parties have agreed to certain winding down obligations, including with respect to completed SOLO vehicles and SOLO parts in Zongshen’s possession, and to certain undertakings regarding non-disparagement. The Company will record this transaction in Q2 2023.

20

ELECTRAMECCANICA VEHICLES CORP.

MANAGEMENT DISCUSSION AND ANALYSIS

(Unaudited)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introductory Note

Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to the “Company,” “ElectraMeccanica,” “we,” “us” or “our” are references to the combined business of ElectraMeccanica Vehicles Corporation. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.

All amounts in the MD&A have been rounded to the nearest thousand unless otherwise indicated.

Overview

ElectraMeccanica designs and manufactures smaller, simpler and purposeful EVs that we believe are a better fit for everyday use in an increasingly crowded, complex world. To date, we have primarily targeted the U.S. as our commercial market.

We have historically sold these vehicles directly to consumers and small businesses. Our initial product was the three-wheel, single-seat, SOLO.

In December 2022, we decided to assemble other companies’ EVs to further leverage the resources and capabilities of our recently commissioned and state-of-the-art 235,000 square foot facility located in Mesa, Arizona. We believe this combination of developing our own vehicles and helping to build those of others places the Company in the best position to benefit from the secular growth of the EV category overall.

The Company is headquartered in Burnaby, British Columbia, Canada. In December 2022, we announced the Company would focus its operations in its Mesa, Arizona, facility.

Recent Events

On February 17, 2023, the Company announced a voluntary recall of the SOLO. The Company paused deliveries and sales of the SOLO while investigating the issue. The recall was made due to the vehicle potentially experiencing a loss of propulsion while driving, which was a condition that existed as of December 31, 2022. The Company was required to remedy the issue within a specific timeframe from the date of the recall announcement. After a thorough investigation, the Company was not able to determine the root cause and fix of the said issue and, therefore, issued a buy-back program on April 14, 2023, for all 429 SOLO EVs sold since its release in 2021. The Company has recorded a recall provision of $8,915,044 as an estimate of the cost to buy-back all retailed vehicles. This amount is included within trade payables and accrued liabilities within the Company’s condensed consolidated balance sheets.

On March 1, 2023, the Company entered into a Contract Assembly Agreement (the “Assembly Agreement”) with GLV to assemble the Volcon Grunt EVO and Runt off-road electric motorcycles. In accordance with the Assembly Agreement, the Company will perform contract assembly services to GLV for 150 days in the Company’s Mesa facility and GLV will ship materials and parts to the plant. The Company will charge GLV a fixed service fee per product plus additional fees for support services. Both the Company and GLV have the option to terminate after the first 90 days of the Assembly Agreement upon giving the requisite 30-day notice. Upon termination, GLV will pay the Company all committed, non-cancellable costs and expenses and the Company will return in-process products as well as all GLV materials and parts.

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ELECTRAMECCANICA VEHICLES CORP.

MANAGEMENT DISCUSSION AND ANALYSIS - CONTINUED

(Unaudited)

On March 3, 2023, the Company entered into a Design and Supply Agreement (the “Design Agreement”) with GLV, pursuant to which GLV will provide design, development, and manufacturing services for the planned E4, the Company’s anticipated 4-wheel electric passenger vehicle. The estimated cost as set out in the Design Agreement is $13,692,000, where 80% will be paid during 2023 with the remaining costs to be paid in 2024. The Company may terminate the Design Agreement upon 30 days written notice to GLV under special circumstances or due to breach of contract. The Company will be responsible for the costs of any finished and conforming products delivered to the Company as well as the costs of the required materials on hand at GLV’s purchase price.

On March 27, 2023, the Company received a deficiency letter from Nasdaq’s Listing Qualifications Department notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market. In accordance with Nasdaq rules, the Company has been provided an initial period of 180 calendar days, or until September 25, 2023, to regain compliance with the Minimum Bid Price Requirement. If, at any time before this date, the closing bid price for the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days, the Staff will provide the Company written confirmation of compliance with the Minimum Bid Price Requirement. The Company may be eligible for an additional 180 calendar day compliance period. If the Company’s share price does not meet the minimum listing requirements in the initial or extended periods, it may seek shareholder approval to execute a reverse stock split.

On March 29, 2023, the Company entered into a Contract Assembly Agreement (the “Assembly Agreement”) with GLV to assemble the Volcon Stag electric Utility Terrain Vehicle (UTV). In accordance with the Assembly Agreement, the Company will perform contract assembly services to GLV for one year in the Company’s Mesa facility and GLV will ship materials and parts to the plant. The Company will charge GLV a fixed service fee per product plus additional fees for support services. Both the Company and GLV have the option to terminate after the first 180 days of the Assembly Agreement upon giving the requisite 90-day notice. Upon termination, GLV will pay the Company all committed, non-cancellable costs and expenses and the Company will return in-process products as well as all GLV materials and parts.

Results of Operations

The following financial information is for the three months ended March 31, 2023 and 2022.

	Three Months Ended
	March 31, 2023		March 31, 2022
Revenue	$	504,427	$	1,038,643
Cost of revenue		407,650		2,942,136
Gross profit / (loss)		96,777		(1,903,493)
Operating expenses:
General and administrative expenses		8,878,971		8,733,578
Research and development expenses		2,583,703		4,671,100
Sales and marketing expenses		2,339,300		3,002,855
Total operating expenses		13,801,974		16,407,533
Operating loss		(13,705,197)		(18,311,026)
Other non-operating income		1,393,563		345,419
Net loss before taxes	$	(12,311,634)	$	(17,965,607)

Revenue

The revenue of the Company principally represents sales of the SOLO. Revenue for the SOLO is recognized when the Company has transferred control to the customer which generally occurs upon delivery.

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ELECTRAMECCANICA VEHICLES CORP.

MANAGEMENT DISCUSSION AND ANALYSIS - CONTINUED

(Unaudited)

Revenue for the three months ended March 31, 2023, was $504,427 compared to $1,038,643 for the same period in 2022, primarily reflecting a decrease in SOLO unit deliveries in 2023 to 29 compared with 45 unit deliveries in the prior year period. The reduction in SOLO unit deliveries was primarily caused by the Company’s voluntary vehicle stop-sale issued on February 21, 2023.

Cost of Revenue and Gross Profit (Loss)

Cost of revenue was $407,650 and $2,942,136 for the three months ended March 31, 2023 and 2022, respectively, resulting in a gross profit of $96,777 for the three months ended March 31, 2023 and a gross loss of $1,903,493 for the three months ended March 31, 2022. The decreased cost of revenue was primarily attributable to the decrease of inventory provision to $nil for the three months ended March 31, 2023 compared to an increase in the inventory provision balance of $1,451,336 in the prior year period.

General and administrative expenses

For the three months ended March 31, 2023, general and administrative expenses were $8,878,971, compared to $8,733,578 for the three months ended March 31, 2022. The increase of $145,393 was principally a result of the following:

● rent expenses increased by approximately $787,000 primarily related to the Mesa, Arizona facility;

● consulting expenses increased by approximately $102,000; offset by

● amortization expense decreased by approximately $245,000;

● stock-based compensation expense decreased by approximately $308,000;

● office and administrative expense decreased by approximately $73,000; and

● other expenses decreased by approximately $116,000.

Research and development expenses

Research and development expenses were $2,583,703 for the three months ended March 31, 2023, compared to $4,671,100 for the three months ended March 31, 2022. The decrease in research and development expenses was primarily attributable to a reduction a headcount and internal engineering project costs.

Sales and marketing expenses

Sales and marketing expenses were $2,339,300 for the three months ended March 31, 2023, compared to $3,002,855 for the three months ended March 31, 2022. The decrease in sales and marketing expenses was primarily attributable to the reduction in headcount and decreased sales and marketing activities due to the decision to stop sale of the SOLO as a result of the February 2023 voluntary recall and the subsequent decision to buy-back all retailed vehicles.

Net Loss

During the three months ended March 31, 2023, the Company incurred a net loss of $12,3111,634, compared to a net loss of $17,965,607 for the three months ended March 31, 2022. The decrease in net loss was primarily attributable to the decrease in gross loss due to the decrease of sales volume and the decrease in operating expenses associated with the Company’s decision to stop sale of the SOLO as result of the February 2023 voluntary recall and the subsequent decision to buy-back all retailed vehicles.

23

ELECTRAMECCANICA VEHICLES CORP.

MANAGEMENT DISCUSSION AND ANALYSIS - CONTINUED

(Unaudited)

Liquidity and Capital Resources

As of March 31, 2023, the Company had cash and cash equivalents and restricted cash of $112.9 million, including $1.7 million of restricted cash, and working capital of $102.0 million. Since inception, we have funded our operations from proceeds from equity sales.

Summary of Cash Flows

	Three Months Ended
	March 31, 2023		March 31, 2022
Cash Flows:
Cash flows used in operating activities	$	(21,198,969)	$	(26,460,082)
Cash flows used in investing activities		(670,876)		(1,068,392)
Cash flows (used in) / provided by financing activities		(16,143)		274,730
Decrease in cash and cash equivalents and restricted cash	$	(21,885,988)	$	(27,253,744)

Cash Flows from Operating Activities

During the three months ended March 31, 2023, cash used in operating activities was $21,198,969, compared with $26,460,082 for the three months ended March 31, 2022. Cash used in operating activities during the three months ended March 31, 2023 decreased principally as a result of an improvement in net loss, driven primarily by a reduction in headcount, consulting spend, and other enterprise operational costs, partially offset by increased outflows in trade payables and accrued liabilities, compared to the three months ended March 31, 2022.

Cash Flows from Investing Activities

During the three months ended March 31, 2023, cash used in investing activities was $670,876, compared with $1,068,392 for the three months ended March 31, 2022. Cash in investing activities decreased primarily driven by a reduction in capital improvements made to our Mesa, Arizona facility.

Cash Flows from Financing Activities

During the three months ended March 31, 2023, we used $16,143 of cash in financing activities for the settlement of DSUs, as compared to having $274,730 of cash provided by financing activities during the three months ended March 31, 2022 from proceeds received upon the exercise of stock options.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Policies and Significant Judgments and Estimates

Detailed information about our critical accounting policies and significant judgements and estimates is set forth in Item 7 on the 2022 Form 10-K. There have been no significant changes to these policies during the three months ended March 31, 2023.

24

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Roles 12a-15(e) or 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023, as required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act. Based on this evaluation, management concluded that the Company's disclosure controls and procedures was not effective as of March 31, 2023, due to material weaknesses in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) that have been previously identified but continue to exist. See Part II, Item 9A of the 2022 Form 10-K for additional information.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the first quarter of fiscal 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Remediation

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31,2022, we began implementing a remediation plan to address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

25

PART II

ITEM 1. LEGAL PROCEEDINGS

We are from time to time subject to various claims and legal actions in the ordinary course of our business. We believe that there are currently no claims or legal actions that would reasonably be expected to have a material adverse effect on our results of operation or financial condition.

ITEM 1A. RISK FACTORS

You should carefully consider the risks discussed in the section entitled “Risk Factors” in the 2022 Form 10-K, which could materially affect our business, financial condition, or future results. The risks described in the 2022 Form 10-K are not the only risks facing the company. Additional risks and uncertainties not currently known to us or that we do not currently deem material, may also materially adversely affect our business, results of operations, cash flows, and financial position.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

26

ITEM 6. Exhibits

EXHIBIT INDEX

Exhibit No.	Description of Exhibit	Method of Filing
3.1	Notice of Articles	Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form F-1 filed with the SEC on October 12, 2016
3.2	Articles	Incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form F-1 filed with the SEC on October 12, 2016
10.1(+)	Contract Assembly Agreement between ElectraMeccanica USA, LLC and GLV, LLC, dated March 1, 2023	Incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2023
10.2(+)	Design and Supply Agreement between ElectraMeccanica USA, LLC and GLV, LLC, dated March 3, 2023	Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 29, 2023
10.3(+)	Executive Employment Agreement between the Company and Michael Bridge, dated February 9, 2023	Incorporated by reference to Exhibit 10.17 of the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2023
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)	Filed herewith
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350	Furnished herewith
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)	Filed herewith

(+)Portions of this exhibit have been omitted.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ELECTRAMECCANICA VEHICLES CORP.

Dated: May 15, 2023.

/s/ Susan E. Docherty

Susan E. Docherty

Chief Executive Officer (Principal Executive Officer), Chief Operating Officer and a Director

/s/ Mark Orsmond

Mark Orsmond

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

28

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Susan E. Docherty, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Electrameccanica Vehicles Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2023	By:	/s/ Susan E. Docherty
		Susan E. Docherty
		Chief Executive Officer and Chief Operating Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Mark Orsmond, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Electrameccanica Vehicles Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2023	By:	/s/ Mark Orsmond
		Mark Orsmond
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Electrameccanica Vehicles Corp. (the “Company”) for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), the undersigned, Susan E. Docherty, Chief Executive Officer and Chief Operating Officer of the Company, and Mark Orsmond, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to her or his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2023	By:	/s/ Susan E. Docherty
		Susan E. Docherty
		Chief Executive Officer and Chief Operating Officer
		(Principal Executive Officer)

Date: May 15, 2023	By:	/s/ Mark Orsmond
		Mark Orsmond
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 09, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Entity File Number	001-38612
Entity Registrant Name	ELECTRAMECCANICA VEHICLES CORP.
Entity Incorporation, State or Country Code	A1
Entity Tax Identification Number	98-1485035
Entity Address State Or Province	BC
Entity Address, Address Line One	8057 North Fraser Way
Entity Address, City or Town	Burnaby
Entity Address, Country	CA
Entity Address, Postal Zip Code	V5J 5M8
City Area Code	604
Local Phone Number	428-7656
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		119,287,917
Entity Central Index Key	0001637736
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Shares, without par value
Document and Entity Information
Title of 12(b) Security	Common Shares, without par value
Trading Symbol	SOLO
Security Exchange Name	NASDAQ
Warrants, each to purchase one Common Share
Document and Entity Information
Title of 12(b) Security	Warrants, each to purchase one Common Share
Trading Symbol	SOLOW
Security Exchange Name	NASDAQ

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Revenue	$ 504,427	$ 1,038,643
Cost of revenue	407,650	2,942,136
Gross profit (loss)	96,777	(1,903,493)
Operating expenses
General and administrative expenses	8,878,971	8,733,578
Research and development expenses	2,583,703	4,671,100
Sales and marketing expenses	2,339,300	3,002,855
Total operating expenses	13,801,974	16,407,533
Operating loss	(13,705,197)	(18,311,026)
Other non-operating income (expense)
Interest income	1,438,838	86,245
Changes in fair value of derivative liabilities		122,425
Other income (expense), net	(24,410)	42,409
Foreign exchange gain (loss)	(20,865)	94,340
Loss before taxes	(12,311,634)	(17,965,607)
Net loss	(12,311,634)	(17,965,607)
Other comprehensive income (loss)
Foreign currency translation adjustments	37,307	(5,850)
Comprehensive loss	$ (12,274,327)	$ (17,971,457)
Loss per share - basic	$ (0.10)	$ (0.15)
Loss per share - diluted	$ (0.10)	$ (0.15)
Weighted average number of shares outstanding - basic	119,287,917	118,451,752
Weighted average number of shares outstanding - diluted	119,287,917	118,451,752

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 111,209,820	$ 134,255,538
Receivables, net	275,682	273,958
Prepaid expenses and other current assets	15,184,153	11,390,850
Inventory, net	4,286,597	4,233,055
Total current assets	130,956,252	150,153,401
Restricted cash	1,715,711	515,449
Plant and equipment, net	16,393,277	16,452,477
Operating lease right-of-use assets	8,559,312	9,031,277
Other assets	4,611,172	5,093,825
Total assets	162,235,724	181,246,429
Current liabilities
Trade payables and accrued liabilities	11,681,338	19,346,470
Customer deposits	240,008	339,744
Current portion of lease liabilities	1,288,398	810,677
Contract termination liability	15,700,000	15,700,000
Total current liabilities	28,909,744	36,196,891
Share-based compensation liability	58,248	76,476
Lease liabilities	17,220,314	17,528,282
Deferred revenue	119,253	119,253
Total liabilities	46,307,559	53,920,902
Commitments and contingencies
Shareholders' equity
Share capital - without par value, unlimited shares authorized; 119,287,917 shares issued and outstanding as of March 31, 2023 and December 31, 2022	396,441,435	395,564,470
Accumulated other comprehensive income	4,603,532	4,566,225
Accumulated deficit	(285,116,802)	(272,805,168)
Total shareholders' equity	115,928,165	127,325,527
Total liabilities and shareholders' equity	$ 162,235,724	$ 181,246,429

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Share capital - without par value	$ 0	$ 0
Share capital - shares authorized	Unlimited	Unlimited
Share capital - shares issued	119,287,917	119,287,917
Share capital - shares outstanding	119,287,917	119,287,917

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (12,311,634)	$ (17,965,607)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	926,564	1,171,335
Stock-based compensation expense	874,879	1,206,547
Inventory provision		1,451,336
Change in fair value of derivative liabilities		(122,425)
Unrealized currency translation gain	(787)
Changes in operating assets and liabilities:
Receivables	(1,724)	214,421
Prepaid expenses and other assets	(3,705,734)	(6,469,784)
Inventory	(53,542)	(4,119,368)
Trade payables and accrued liabilities	(7,466,304)	(1,839,931)
Operating lease liabilities	639,268	(3,837)
Customer deposits	(99,955)	17,231
Net cash used in operating activities	(21,198,969)	(26,460,082)
Cash flows from investing activities
Expenditures on plant and equipment	(670,876)	(1,068,392)
Net cash used in investing activities	(670,876)	(1,068,392)
Cash flows from financing activities
Proceeds from / (payment for) issuance of common shares for RSU settlement		(20,786)
Payment for DSU settlement	(16,143)
Proceeds from issuance of common shares for options exercised		295,516
Net cash provided by (used in) financing activities	(16,143)	274,730
Decrease in cash and cash equivalents and restricted cash	(21,885,988)	(27,253,744)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	40,532	(5,850)
Cash and cash equivalents and restricted cash, beginning	134,770,987	222,219,684
Cash and cash equivalents and restricted cash, ending	$ 112,925,531	$ 194,960,090

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Share capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning Balance (in shares) at Dec. 31, 2021	117,338,964
Beginning Balance at Dec. 31, 2021	$ 390,290,103	$ 4,501,800	$ (149,106,655)	$ 245,685,248
Consolidated Statements of Changes in Stockholders' Equity
Shares issued pursuant to exercise of options (in shares)	1,245,455
Shares issued pursuant to exercise of options	$ 295,516			$ 295,516
Shares issued pursuant to settlement of RSU (in shares)	27,077			(27,077)
Shares issued pursuant to settlement of RSU	$ (20,786)			$ (20,786)
Stock-based compensation	$ 1,109,266			1,109,266
Net loss			(17,965,607)	(17,965,607)
Foreign currency translation		(5,850)		(5,850)
Ending Balance (in shares) at Mar. 31, 2022	118,611,496
Ending Balance at Mar. 31, 2022	$ 391,674,099	4,495,950	(167,072,262)	229,097,787
Beginning Balance (in shares) at Dec. 31, 2022	119,287,917
Beginning Balance at Dec. 31, 2022	$ 395,564,470	4,566,225	(272,805,168)	$ 127,325,527
Consolidated Statements of Changes in Stockholders' Equity
Shares issued pursuant to settlement of RSU (in shares)				0
Stock-based compensation	$ 876,965			$ 876,965
Net loss			(12,311,634)	(12,311,634)
Foreign currency translation		37,307		37,307
Ending Balance (in shares) at Mar. 31, 2023	119,287,917
Ending Balance at Mar. 31, 2023	$ 396,441,435	$ 4,603,532	$ (285,116,802)	$ 115,928,165

XML

Nature and continuance of operations

3 Months Ended

Mar. 31, 2023

Nature and continuance of operations

Nature and continuance of operations

1.Nature and continuance of operations

ElectraMeccanica Vehicles Corp. was incorporated on February 16, 2015, under the laws of the province of British Columbia, Canada, and its principal activity is the development and manufacturing of EVs.

The head office and principal address of the Company are located at 8057 North Fraser Way, British Columbia, Canada, V5J 5M8.

These unaudited condensed consolidated financial statements have been prepared on the assumption that the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.  The Company’s continuation is dependent upon the successful results from its EV assembly activities and ability to launch a new 4-wheel electric passenger vehicle, “Project E4”, and generate profitable operations therefrom.

Beginning in August 2020, the Company has designed, assembled, and sold a unique, three-wheeled, single-seat commuter electric vehicle, the SOLO. On February 17, 2023, the Company announced a voluntary recall of the SOLO due to an unidentified technical issue that resulted in loss of propulsion while driving in certain vehicles at certain times. On April 14, 2023, the Company decided to repurchase all 429 previously retailed SOLO vehicles to ensure the safety of our customers.

The Company has been in discussions with Zongshen to end the Manufacturing Agreement for the SOLO, and on May 8, 2023, entered into a settlement agreement with Zongshen relating to the Manufacturing Agreement (see Note 20 for additional information).

In December 2022, the Company decided to assemble other companies’ EVs to further leverage the resources and capabilities of its recently commissioned and state-of-the-art 235,000 square foot facility located in Mesa, Arizona.  The Company aims to manufacture it’s E4’s in the Mesa facility.

Management intends to finance its operations over the next 12 months principally using existing cash on hand and may supplement by additional funding through private placements and/or public offerings of equity capital or debt, provided that such funding can be obtained on terms that are commercially competitive and on terms acceptable to the company.

XML

Basis of presentation and summary of significant accounting policies

3 Months Ended

Mar. 31, 2023

Basis of presentation and summary of significant accounting policies

Basis of presentation and summary of significant accounting policies

2.Basis of presentation and summary of significant accounting policies

Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of ElectraMeccanica Vehicles Corp. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual audited financial statements. All inter-company balances and transactions have been eliminated.

The unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 should be read in conjunction with the consolidated financial statements and accompanying notes included in the 2022 Form 10-K. The unaudited condensed consolidated balance sheet as of December 31, 2022, was derived from audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The operating results for the quarter ended March 31, 2022 reflect the retrospective adoption of U.S. GAAP which was reflected in the 2022 Form 10-K. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included in the 2022 Form 10-K.

Use of estimates

The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, estimating the write down of inventory to net realizable value, estimating the recall provision, and estimating the contingent liabilities for contract termination. Management estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates.

Segment reporting

The Company continually monitors and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact its reportable operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. The chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. Up until the fourth quarter of 2022, the Company managed, reported and evaluated its business in the following two reportable operating segments: (i) Electric Vehicles and (ii) Custom Built Vehicles. During the fourth quarter of 2022, the CODM changed how she makes operating decisions, assesses the performance of the business and allocates resources in a manner that caused the Company’s operating segments to change as a result of the Company having stopped receiving orders for custom built vehicles. In consideration of Financial Accounting Standards Board’s Accounting Standards Codification 280, Segment Reporting, the CODM determined that the Company is not organized around specific products and services, geographic regions or regulatory environments. Accordingly, beginning with the fourth quarter of 2022, the Company realigned its reporting structure, resulting in a single reportable segment, Electric Vehicles, in the United States.

XML

Cash and cash equivalents and restricted cash

3 Months Ended

Mar. 31, 2023

Cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash

3.Cash and cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

	March 31, 2023		December 31,2022
Cash and cash equivalents	$	111,209,820	$	134,255,538
Restricted cash		1,715,711		515,449
Total cash, cash equivalents and restricted cash	$	112,925,531	$	134,770,987

The Company’s restricted cash as of March 31, 2023 and December 31, 2022 consists of certificates of deposits related to the Company's corporate credit card program and bank issued letter of credit.

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Prepaid expenses and other current assets

3 Months Ended

Mar. 31, 2023

Prepaid expenses and other current assets

Prepaid expenses and other current assets

4.Prepaid expenses and other current assets

	March 31, 2023		December 31,2022
SOLO vehicle deposit (at supplier)	$	7,133,451	$	7,133,451
Battery cell deposit		247,036		300,000
Prepaid insurance		1,531,542		1,095,152
Prepaid rent and security deposit		480,330		495,112
Cloud computing assets		1,373,030		1,234,039
Other prepaid expenses		4,418,764		1,133,096
	$	15,184,153	$	11,390,850

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Inventory, net

3 Months Ended

Mar. 31, 2023

Inventory, net

Inventory, net

5.Inventory, net

The Company’s inventory, net consisted of the following:

	March 31, 2023		December 31, 2022
Parts and batteries	$	1,531,597	$	1,242,055
Vehicles		2,755,000		18,022,771
Inventory provision		—		(15,031,771)
	$	4,286,597	$	4,233,055

For the three months ended March 31, 2023, amounts of $nil was recognized as inventory write-downs (March 31, 2022 – $1,451,336). These charges are reflected in cost of revenue.

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Plant and equipment

3 Months Ended

Mar. 31, 2023

Plant and equipment

Plant and equipment

6.Plant and equipment

	March 31, 2023		December 31, 2022
Furniture and equipment	$	3,692,816	$	2,117,901
Computer hardware and software		1,307,981		1,381,786
Vehicles		689,739		1,046,817
Leasehold improvements		12,956,694		12,862,333
Production tooling and molds		904,332		1,956,743
Total plant and equipment		19,551,562		19,365,580
Less: accumulated depreciation		(3,158,285)		(2,913,103)
Plant and equipment, net	$	16,393,277	$	16,452,477

During the three months ended March 31, 2023 and 2022, depreciation expense of $582,903 and $1,036,283, respectively, was recorded within general and administrative expenses.

During the three months ended March 31, 2023, $949,554 of production tooling was transferred to furniture and equipment upon completion of certain assets. The Company also disposed of assets which primarily consisted of demonstration vehicles and computer equipment. These items were scrapped due to the Company’s planned relocation of its Burnaby, BC, Canada headquarters which is anticipated to take place in the second quarter of 2023. The loss on this disposal was $93,367 and is recorded within other income (expense), net in the condensed consolidated statement of operations and comprehensive loss.

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Other assets

3 Months Ended

Mar. 31, 2023

Other assets

Other assets

7.Other assets

	March 31, 2023		December 31, 2022
Security deposit	$	1,161,000	$	1,161,000
Cloud computing assets		3,438,216		3,920,869
Intangible assets		11,956		11,956
	$	4,611,172	$	5,093,825

During the three months ended March 31, 2023 and 2022, amortization of $343,661 and $134,071, respectively, was recorded for capitalized cloud computing assets within general and administrative expenses within the condensed consolidated statement of operations and comprehensive loss.

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Trade payables and accrued liabilities

3 Months Ended

Mar. 31, 2023

Trade payables and accrued liabilities

Trade payables and accrued liabilities

8.Trade payables and accrued liabilities

	March 31, 2023		December 31, 2022
Trade payables	$	374,982	$	3,795,772
Recall provision		8,915,044		8,915,044
Accrued liabilities		2,391,312		6,635,654
	$	11,681,338	$	19,346,470

On February 17, 2023, the Company announced a voluntary recall of the SOLO. On April 14, 2023, the Company issued a stop-drive and stop-sell notice and has notified customers of a vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021. The basis of the recall was due to the vehicle potentially experiencing a loss of propulsion while driving. As of March 31, 2023 and December 31, 2022, a recall provision of $8,915,044 was recorded as an estimate of the cost to buy-back all retailed vehicles, which was included in trade payables and accrued liabilities within the Company’s condensed consolidated balance sheet.

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Leases

3 Months Ended

Mar. 31, 2023

Leases

Leases

9.Leases

The Company has operating leases for its engineering center, corporate offices, manufacturing warehouse facility, and kiosk locations. These leases span a period of one to eleven years.

The components of lease expense, included within general and administrative expenses and sales and marketing expenses are as follows within the Company’s condensed consolidated statements of operations and comprehensive loss:

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Operating lease expense
Operating lease expense	$	848,620	$	286,878
Short-term lease expense		338,875		388,920
	$	1,187,495	$	675,798

	March 31, 2023		December 31, 2022
Weighted average remaining operating lease term (in years)	8.88		9.41
Weighted average operating lease discount rate	10.29	%	10.28	%

As of March 31, 2023, the maturities of the Company’s operating lease liabilities (excluding short-term leases) are as follows:

2023 (remaining nine months)	$	2,363,196
2024		3,004,150
2025		2,933,878
2026		2,996,552
2027		2,748,958
Thereafter		15,706,015
Total minimum lease payments		29,752,749
Less: interest		11,244,037
Present value of lease obligations		18,508,712
Less: Current portion		1,288,398
Long-term portion of lease obligations	$	17,220,314

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Contract termination liability

3 Months Ended

Mar. 31, 2023

Contract termination liability

Contract termination liability

10.Contract termination liability

On September 29, 2017, the Company entered into a manufacturing agreement with Zongshen, which was amended on June 23, 2021 (as amended, the “Manufacturing Agreement”).  Pursuant to the Manufacturing Agreement, Zongshen agreed to manufacture the Company’s SOLO vehicles, and the Company agreed to certain target purchase volumes for the period from June 1, 2021, to November 30, 2023.

On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles. As a result, Zongshen claimed $22.8 million in relation to the termination of the Manufacturing Agreement.  The Company was working together with legal counsel on achieving an agreement for the termination of the Manufacturing Agreement. The Company estimated a $15.7 million termination provision, representing the Company’s best assessment of the settlement amount, which is presented as a contract termination liability within the Company’s condensed consolidated balance sheets. On February 16, 2023, the Company gave notice to Zongshen of potential claims against it for supplying defective products, which Zongshen has denied.  On May 8, 2023, the Company entered into a settlement agreement with Zongshen relating to the Manufacturing Agreement (see Note 20 for additional information).

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Share capital and other components of equity

3 Months Ended

Mar. 31, 2023

Share capital and other components of equity

Share capital and other components of equity

11.Share capital and other components of equity

Share capital

The Company is authorized to issue an unlimited number of common shares without par value.

The Company is authorized to issue an unlimited number of preferred shares without par value.

As of both March 31, 2023 and December 31, 2022, the Company had 119,287,917 issued and outstanding common shares and nil preferred shares.

Share options exercised

During the three months ended March 31, 2023, the Company issued no common shares for options exercised by option holders (March 31, 2022 – 1,245,455 shares for proceeds of $295,516).

RSUs settled

During the three months ended March 31, 2023, no restricted share units (“RSUs) vested. During the three months ended March 31, 2022, the Company issued 27,077 common shares in connection with the vesting of RSUs and decreased share capital by $20,786.

Warrants

On exercise, each warrant allows the holder to purchase one common share of the Company, including on a cashless basis, based on the formula as set forth in the applicable warrant agreement

Warrants of the Company classified as equity are composed of the following as at March 31, 2023:

	Number of warrants	Number of warrants
Date of issuance	outstanding	exercisable	Exercise price		Expiry date
October 31, 2017	125,000	125,000	$	15	October 31, 2024
August 8, 2018	4,513,253	4,513,253	$	4.27	August 8, 2023
November 9, 2018	7,440	7,440	$	3.2	November 9, 2023
November 9, 2018	749,788	749,788	$	2.56	May 9, 2024
	5,395,481	5,395,481

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Stock-based compensation

3 Months Ended

Mar. 31, 2023

Stock-based compensation

Stock-based compensation

12.Stock-based compensation

Under the Company’s share-based payment arrangements, a total stock-based compensation of $874,879 and $1,206,547 was recognized in the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022, respectively.

	Three months ended		Three months ended
Share-based compensation expense recorded in	March 31, 2023		March 31, 2022
General and administrative expenses	$	771,940	$	1,073,717
Research and development expenses		64,275		161,480
Sales and marketing expenses		38,664		(28,650)
	$	874,879	$	1,206,547

Stock options

The Company adopted its 2020 Stock Incentive Plan (the “Stock Incentive Plan”) on July 9, 2020, which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company certain stock-based compensation awards including non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 30,000,000. Such stock options may be exercisable for a period of up to 10 years from the date of grant. Stock options may be exercised no later than 90 days following cessation of the optionee’s position with the Company unless any exercise extension has been approved in advance by the administrator of the Stock Incentive Plan.

Stock options granted may vest based on the terms and conditions set out in the applicable stock option agreement. On exercise, each stock option allows the holder to purchase one common share of the Company, including on a cashless basis, based on the formula as set forth in the applicable stock option agreement.

Details of stock options outstanding as at March 31, 2023 were as follows:

	Weighted average	Number of options	Number of options
Exercise price	contractual life	outstanding	exercisable
$2.00 CAD	1.18	65,000	65,000
$0.535 USD	6.98	500,000	—
$0.99	6.81	215,367	62,812
$1.08	6.56	297,050	105,198
$1.11	6.69	3,750,000	—
$1.50	6.34	674,815	340,382
$1.91	2.80	2,955,000	2,802,225
$1.94	6.05	154,338	73,948
$2.13	5.85	48,407	25,205
$2.45	3.35	1,250,000	1,250,000
$2.53	3.36	50,000	50,000
$2.62	0.48	700,000	700,000
$3.01	1.68	750,000	750,000
$3.40	2.12	1,035,000	1,035,000
$3.41	4.31	549,922	505,343
$3.55	5.30	5,000	2,835
$3.56	5.62	150,861	88,742
$3.77	1.68	50,000	50,000
$4.15	1.68	750,000	750,000
$5.00	0.67	193,629	193,629
$7.75	4.89	30,000	23,125
$9.60	1.77	50,000	50,000
		14,224,389	8,923,444

The fair value of options granted has been estimated using the Black-Scholes option pricing model and based on the weighted average of certain assumptions. See Note 6 in the consolidated financial statements and accompanying notes included in the 2022 Form 10-K for additional information regarding such assumptions.

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $661,652 and $905,522, respectively, relating to stock options granted.

DSUs

Deferred Stock Units (“DSUs”) are stock-based awards that may be granted by the Company to certain eligible participants pursuant to the Stock Incentive Plan. The Company allows the holders of the DSUs to settle the DSUs in cash or common shares. During the three months ended March 31, 2023 and 2022, the Company issued nil DSUs.

The number and weighted average share prices of DSUs was as follows at March 31, 2023 and December 31, 2022:

	March 31, 2023			December 31, 2022
	Number of		Weighted average	Number of		Weighted average
	DSUs	share price		DSUs	share price
DSUs outstanding	111,231	$	3.16	127,460	$	3.02
DSUs exercisable	111,231	$	3.16	127,460	$	3.02

The fair value of the DSUs liabilities was estimated using the stock price as of March 31, 2023 and December 31, 2022.

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation of $nil and $97,280, respectively, relating to DSUs granted.

RSUs

RSUs are stock-based awards that may be granted by the Company to certain eligible participants pursuant to the Stock Incentive Plan. RSUs are accounted for as equity-settled share-based payment transactions as the obligations under an RSU will be settled through the issuance of common shares.

Details of RSUs outstanding as at March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023			December 31, 2022
	Number of	Weighted average		Number of
	RSUs	share price		RSUs	Deemed value
RSUs outstanding	1,875,000	$	1.02	1,875,000	$	1.02
RSUs exercisable	—	$	—	—	$	—

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $213,227 and $203,745, respectively, relating to RSUs granted.

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Revenue

3 Months Ended

Mar. 31, 2023

Revenue

Revenue

13.Revenue

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Revenue	$	504,427	$	1,038,643

The Company generates revenue primarily through the sale of EVs as well as parts sales, services, repairs, and support services. The Company recognizes revenue related to the vehicle when the customer obtains control of the vehicle which occurs at a point in time either upon completion of delivery to the agreed upon delivery location or upon pick up of the vehicle by the customer.

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Interest income

3 Months Ended

Mar. 31, 2023

Interest income

Interest income

14.Interest income

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Interest income	$	1,438,838	$	86,245

Interest income relates to interest earned on cash deposited in the Company’s bank accounts.

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Current income tax expense

3 Months Ended

Mar. 31, 2023

Current income tax expense

Current income tax expense

15.Current income tax expense

As of March 31, 2023 and December 31, 2022, the Company’s deferred tax liability was zero. Cumulative deferred tax assets are fully reserved as there is not sufficient evidence to conclude it is more likely than not the deferred tax assets are realizable. No current liability for federal state income taxes has been included in these condensed consolidated financial statements due to the loss for the periods.

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Basic and Diluted loss per share

3 Months Ended

Mar. 31, 2023

Basic and Diluted loss per share

Basic and Diluted loss per share

16.Basic and Diluted loss per share

The calculation of basic and diluted loss per share for the three months ended March 31, 2023 and 2022 was based on the net loss attributable to common shareholders of $12,311,634 and $17,965,607, respectively, and the weighted average number of common shares outstanding of 119,287,917 and 118,451,752, respectively. For the three months ended March 31, 2023, diluted loss per share did not include the effect of 14,224,389 stock options, 5,395,481 warrants, 111,231 DSUs and 1,875,000 RSUs, as the effect would have been anti-dilutive. For the three months ended March 31, 2022, diluted loss per share did not include the effect of 11,151,488 stock options, 7,158,021 warrants, 93,956 DSUs and 522,385 RSUs, as the effect would have been anti-dilutive.

	Three months ended March 31, 2023		Three months ended March 31, 2022
Net loss	$	(12,311,634)	$	(17,965,607)
Weighted average number of shares outstanding – basic and diluted		119,287,917		118,451,752
Loss per share – basic and diluted	$	(0.10)	$	(0.15)

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Segment information

3 Months Ended

Mar. 31, 2023

Segment information

Segment information

17.Segment information

During the three months ended March 31, 2023, the Company operated in one reportable business segment, Electric Vehicles, in Canada and the United States. The Company no longer includes custom built vehicles as a reportable business segment because it ceased production of such vehicles in December 2022. Supplemental geographic data has been provided below:

	Three months ended March 31, 2023				Three months ended March 31, 2022
			Custom Built				Custom Built
	Electric Vehicles		Vehicles		Electric Vehicles		Vehicles
Revenue	$	504,427	$	—	$	871,945	$	166,698
Gross profit		(96,777)		—		(1,897,180)		(6,313)
Depreciation and amortization		(926,564)		—		(1,159,739)		(11,596)
Operating expenses		(12,875,410)		—		(15,179,365)		(56,833)
Other items		1,393,563		—		317,598		27,821
Current income tax recovery		—		—		—		—
Deferred income tax recovery		—		—		—		—
Net (loss)/income		(12,311,634)		—		(17,918,686)		(46,921)
FX translation		37,307		—		471		(6,321)
Comprehensive (loss)/income	$	(12,274,327)	$	—	$	(17,918,215)	$	(53,242)

	March 31, 2023				December 31, 2022
	Electric		Custom Built		Electric		Custom Built
	Vehicles		Vehicles		Vehicles		Vehicles
Inventory	$	4,286,597	$	—	$	4,233,055	$	—
Plant and equipment, net		16,393,277		—		16,452,477		—
Operating lease right-of-use assets		8,559,312		—		9,031,277		—
Other assets		4,611,173		—		5,093,825		—
Total assets	$	162,235,725	$	—	$	181,186,106	$	60,323

Sales to unaffiliated customers:

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
United States	$	504,427	$	940,134
Canada		—		98,509
Total	$	504,427	$	1,038,643

Plant and equipment and right-of-use assets:

	March 31, 2023		December 31, 2022
United States	$	22,743,701	$	23,113,904
Canada		2,206,059		2,366,861
Other foreign countries		2,829		2,989
Total	$	24,952,589	$	25,483,754

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Fair value

3 Months Ended

Mar. 31, 2023

Fair value

Fair value

18.Fair value

The following table presents the hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of March 31, 2023:

	Level 1		Level 2		Level 3		Total
Liabilities:
Share-based compensation liability	$	—	$	58,248	$	—	$	58,248

The following table presents the hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of December 31, 2022:

	Level 1		Level 2		Level 3		Total
Liabilities:
Share-based compensation liability	$	—	$	76,476	$	—	$	76,476

Financial liabilities measured at fair value as of March 31, 2023 consisted of the non-transferrable warrants denominated in Canadian dollars (“CAD”) and DSUs. The fair values of DSUs and the non-transferrable warrants are both classified as Level 2 in the fair value hierarchy.

The fair value of the DSUs was measured using the quoted market price for common shares of the Company on the Nasdaq exchange.

The fair value of the non-transferrable warrants denominated in CAD were calculated using the Black-Scholes option pricing model using the historical volatility of comparable companies as an estimate of future volatility. As of March 31, 2023 and December 31, 2022, if the volatility used was increased by 10%, the impact would be a $nil increase to derivative liabilities.

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Commitments and contingencies

3 Months Ended

Mar. 31, 2023

Commitments and contingencies

Commitments and contingencies

19.Commitments and contingencies

Commitments

On February 17, 2023, the Company announced a voluntary recall of the SOLO. On April 14, 2023, the Company issued a stop-drive and stop-sell notice and has notified customers of a vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021. The basis of the recall was due to the vehicle potentially experiencing a loss of propulsion while driving.  As of March 31, 2023 and December 31, 2022, a recall provision of $8,915,044 was recorded as an estimate of the cost to buy-back all retailed vehicles, which was included in trade payables and accrued liabilities within the Company’s condensed consolidated balance sheet.

On March 3, 2023, the Company entered into a Design and Supply Agreement (the “Design Agreement”) with GLV, LLC (“GLV”), pursuant to which GLV will provide design, development, and manufacturing services for the planned E4, the Company’s anticipated 4-wheel electric passenger vehicle. The estimated cost as set out in the Design Agreement is $13,692,000, where 80% will be paid during 2023 with the remaining costs to be paid in 2024. The Company may terminate the Design Agreement upon 30 days written notice to GLV under special circumstances or due to breach of contract. The Company will be responsible for the costs of any finished and conforming products delivered to the Company as well as the costs of the required materials on hand at GLV’s purchase price. As of March 31, 2023 and December 31, 2022, the Company had $9,584,400 and $nil commitments, respectively, under the Design Agreement.

Contingencies

In the ordinary course of business, the Company may from time to time become subject to legal proceedings and claims arising in connection with ongoing business activities. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially affect the Company’s results of operations, financial condition, or cash flows. In addition, regardless of the outcome, litigation could have an adverse impact on the Company as a result of legal fees, the diversion of management’s time and attention and other factors.

On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles. As a result, Zongshen claimed $22.8 million in relation to the termination of the Manufacturing Agreement and Extension Agreement. The Company was working together with legal counsel on achieving an agreement for the termination of the Manufacturing Agreement. The Company estimated a $15.7 million termination provision, representing the Company’s best assessment of the settlement amount, which is presented as a contract termination liability within the Company’s consolidated balance sheets. On February 16, 2023, the Company gave notice to Zongshen of potential claims against it for supplying defective products, which Zongshen has denied. On May 8, 2023, the Company entered into a settlement agreement with Zongshen relating to the Manufacturing Agreement (see Note 20 for additional information).

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Subsequent events

3 Months Ended

Mar. 31, 2023

Subsequent events

Subsequent events

20.Subsequent events

On April 14, 2023, the Company issued a stop-drive and stop-sell notice and has notified customers of a vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021. The basis of the recall was due to the vehicle potentially experiencing a loss of propulsion while driving. As of March 31, 2023 and December 31, 2022, a recall provision of $8,915,044 was recorded as an estimate of the cost to buy-back all retailed vehicles, which was included in trade payables and accrued liabilities within the Company’s condensed consolidated balance sheet.

On May 8, 2023, the Company entered into a settlement deed (the “Settlement Agreement”) with Zongshen, effective as of May 4, 2023. The Settlement Agreement resolves all outstanding claims relating to the Manufacturing Agreement and the related cancellation notice and defective notice provided by the Company to Zongshen (collectively, the “Agreement and Notices”). Pursuant to the Manufacturing Agreement, Zongshen had agreed to manufacture the Company’s SOLO vehicles, and the Company agreed to certain target purchase volumes for the period from June 1, 2021 to November 30, 2023.

Pursuant to the Settlement Agreement, the Company has agreed, among other things, to (i) pay Zongshen $8.0 million in cash, (ii) forfeit $7.1 million in previously paid deposits to Zongshen, which are currently included in prepaid expenses and other current assets on the consolidated balance sheet as of March 31, 2023 (see Note 4), and (iii) provide Zongshen $1.0 million in the form of claims to certain agreed upon vendor owned vehicle parts, in full and final settlement, satisfaction, discharge and release of all claims that were or could have been brought relating to the Agreement and Notices. The Company will receive an additional129 G3 SOLO vehicles. The Company is required to pay the cash portion of the settlement amount within 10 business days of the effective date of the Settlement Agreement. The parties have also agreed to provide mutual releases of all claims relating to the Agreement and Notices. Additionally, the parties have agreed to certain winding down obligations, including with respect to completed SOLO vehicles and SOLO parts in Zongshen’s possession, and to certain undertakings regarding non-disparagement. The Company will record this transaction in Q2 2023.

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Basis of presentation and summary of significant accounting policies (Policies)

3 Months Ended

Mar. 31, 2023

Basis of presentation and summary of significant accounting policies

Basis of presentation and consolidation

Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of ElectraMeccanica Vehicles Corp. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual audited financial statements. All inter-company balances and transactions have been eliminated.

The unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 should be read in conjunction with the consolidated financial statements and accompanying notes included in the 2022 Form 10-K. The unaudited condensed consolidated balance sheet as of December 31, 2022, was derived from audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The operating results for the quarter ended March 31, 2022 reflect the retrospective adoption of U.S. GAAP which was reflected in the 2022 Form 10-K. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included in the 2022 Form 10-K.

Use of estimates

Use of estimates

The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, estimating the write down of inventory to net realizable value, estimating the recall provision, and estimating the contingent liabilities for contract termination. Management estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates.

Segment reporting

Segment reporting

The Company continually monitors and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact its reportable operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. The chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. Up until the fourth quarter of 2022, the Company managed, reported and evaluated its business in the following two reportable operating segments: (i) Electric Vehicles and (ii) Custom Built Vehicles. During the fourth quarter of 2022, the CODM changed how she makes operating decisions, assesses the performance of the business and allocates resources in a manner that caused the Company’s operating segments to change as a result of the Company having stopped receiving orders for custom built vehicles. In consideration of Financial Accounting Standards Board’s Accounting Standards Codification 280, Segment Reporting, the CODM determined that the Company is not organized around specific products and services, geographic regions or regulatory environments. Accordingly, beginning with the fourth quarter of 2022, the Company realigned its reporting structure, resulting in a single reportable segment, Electric Vehicles, in the United States.

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Cash and cash equivalents and restricted cash (Tables)

3 Months Ended

Mar. 31, 2023

Cash and cash equivalents and restricted cash

Schedule of reconciliation of cash, cash equivalents and restricted cash

	March 31, 2023		December 31,2022
Cash and cash equivalents	$	111,209,820	$	134,255,538
Restricted cash		1,715,711		515,449
Total cash, cash equivalents and restricted cash	$	112,925,531	$	134,770,987

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Prepaid expenses and other current assets (Tables)

3 Months Ended

Mar. 31, 2023

Prepaid expenses and other current assets

Schedule of prepaid expenses and other current assets

	March 31, 2023		December 31,2022
SOLO vehicle deposit (at supplier)	$	7,133,451	$	7,133,451
Battery cell deposit		247,036		300,000
Prepaid insurance		1,531,542		1,095,152
Prepaid rent and security deposit		480,330		495,112
Cloud computing assets		1,373,030		1,234,039
Other prepaid expenses		4,418,764		1,133,096
	$	15,184,153	$	11,390,850

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Inventory, net (Tables)

3 Months Ended

Mar. 31, 2023

Inventory, net

Schedule of inventory, net

	March 31, 2023		December 31, 2022
Parts and batteries	$	1,531,597	$	1,242,055
Vehicles		2,755,000		18,022,771
Inventory provision		—		(15,031,771)
	$	4,286,597	$	4,233,055

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Plant and equipment (Tables)

3 Months Ended

Mar. 31, 2023

Plant and equipment

Schedule of plant and equipment

	March 31, 2023		December 31, 2022
Furniture and equipment	$	3,692,816	$	2,117,901
Computer hardware and software		1,307,981		1,381,786
Vehicles		689,739		1,046,817
Leasehold improvements		12,956,694		12,862,333
Production tooling and molds		904,332		1,956,743
Total plant and equipment		19,551,562		19,365,580
Less: accumulated depreciation		(3,158,285)		(2,913,103)
Plant and equipment, net	$	16,393,277	$	16,452,477

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Other assets (Tables)

3 Months Ended

Mar. 31, 2023

Other assets

Schedule of other assets

	March 31, 2023		December 31, 2022
Security deposit	$	1,161,000	$	1,161,000
Cloud computing assets		3,438,216		3,920,869
Intangible assets		11,956		11,956
	$	4,611,172	$	5,093,825

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Trade payables and accrued liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Trade payables and accrued liabilities

Schedule of trade payables and accrued liabilities

	March 31, 2023		December 31, 2022
Trade payables	$	374,982	$	3,795,772
Recall provision		8,915,044		8,915,044
Accrued liabilities		2,391,312		6,635,654
	$	11,681,338	$	19,346,470

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Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases

Schedule of components of lease expense

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Operating lease expense
Operating lease expense	$	848,620	$	286,878
Short-term lease expense		338,875		388,920
	$	1,187,495	$	675,798

Schedule of weighted-average remaining lease term and the weighted-average discount rate for the operating lease

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Operating lease expense
Operating lease expense	$	848,620	$	286,878
Short-term lease expense		338,875		388,920
	$	1,187,495	$	675,798

	March 31, 2023		December 31, 2022
Weighted average remaining operating lease term (in years)	8.88		9.41
Weighted average operating lease discount rate	10.29	%	10.28	%

Schedule of maturities of operating lease liabilities (excluding short-term leases)

2023 (remaining nine months)	$	2,363,196
2024		3,004,150
2025		2,933,878
2026		2,996,552
2027		2,748,958
Thereafter		15,706,015
Total minimum lease payments		29,752,749
Less: interest		11,244,037
Present value of lease obligations		18,508,712
Less: Current portion		1,288,398
Long-term portion of lease obligations	$	17,220,314

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Share capital and other components of equity (Tables)

3 Months Ended

Mar. 31, 2023

Share capital and other components of equity

Schedule of warrants

	Number of warrants	Number of warrants
Date of issuance	outstanding	exercisable	Exercise price		Expiry date
October 31, 2017	125,000	125,000	$	15	October 31, 2024
August 8, 2018	4,513,253	4,513,253	$	4.27	August 8, 2023
November 9, 2018	7,440	7,440	$	3.2	November 9, 2023
November 9, 2018	749,788	749,788	$	2.56	May 9, 2024
	5,395,481	5,395,481

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Share-based payments (Tables)

3 Months Ended

Mar. 31, 2023

Stock-based compensation

Schedule of total stock-based compensation recognized in the consolidated statements of operations and comprehensive loss

	Three months ended		Three months ended
Share-based compensation expense recorded in	March 31, 2023		March 31, 2022
General and administrative expenses	$	771,940	$	1,073,717
Research and development expenses		64,275		161,480
Sales and marketing expenses		38,664		(28,650)
	$	874,879	$	1,206,547

Schedule of changes in stock options and details of stock options outstanding

	Weighted average	Number of options	Number of options
Exercise price	contractual life	outstanding	exercisable
$2.00 CAD	1.18	65,000	65,000
$0.535 USD	6.98	500,000	—
$0.99	6.81	215,367	62,812
$1.08	6.56	297,050	105,198
$1.11	6.69	3,750,000	—
$1.50	6.34	674,815	340,382
$1.91	2.80	2,955,000	2,802,225
$1.94	6.05	154,338	73,948
$2.13	5.85	48,407	25,205
$2.45	3.35	1,250,000	1,250,000
$2.53	3.36	50,000	50,000
$2.62	0.48	700,000	700,000
$3.01	1.68	750,000	750,000
$3.40	2.12	1,035,000	1,035,000
$3.41	4.31	549,922	505,343
$3.55	5.30	5,000	2,835
$3.56	5.62	150,861	88,742
$3.77	1.68	50,000	50,000
$4.15	1.68	750,000	750,000
$5.00	0.67	193,629	193,629
$7.75	4.89	30,000	23,125
$9.60	1.77	50,000	50,000
		14,224,389	8,923,444

Schedule of number and weighted average share prices of DSUs

	March 31, 2023			December 31, 2022
	Number of		Weighted average	Number of		Weighted average
	DSUs	share price		DSUs	share price
DSUs outstanding	111,231	$	3.16	127,460	$	3.02
DSUs exercisable	111,231	$	3.16	127,460	$	3.02

Schedule of changes in RSUs

	March 31, 2023			December 31, 2022
	Number of	Weighted average		Number of
	RSUs	share price		RSUs	Deemed value
RSUs outstanding	1,875,000	$	1.02	1,875,000	$	1.02
RSUs exercisable	—	$	—	—	$	—

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Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue

Schedule of revenue

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Revenue	$	504,427	$	1,038,643

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Interest income (Tables)

3 Months Ended

Mar. 31, 2023

Interest income

Schedule of interest income

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Interest income	$	1,438,838	$	86,245

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Basic and Diluted loss per share (Tables)

3 Months Ended

Mar. 31, 2023

Basic and Diluted loss per share

Schedule of basic and diluted loss per share

	Three months ended March 31, 2023		Three months ended March 31, 2022
Net loss	$	(12,311,634)	$	(17,965,607)
Weighted average number of shares outstanding – basic and diluted		119,287,917		118,451,752
Loss per share – basic and diluted	$	(0.10)	$	(0.15)

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Segment information (Tables)

3 Months Ended

Mar. 31, 2023

Segment information

Schedule of operations of each of the Company's reportable business segments

	Three months ended March 31, 2023				Three months ended March 31, 2022
			Custom Built				Custom Built
	Electric Vehicles		Vehicles		Electric Vehicles		Vehicles
Revenue	$	504,427	$	—	$	871,945	$	166,698
Gross profit		(96,777)		—		(1,897,180)		(6,313)
Depreciation and amortization		(926,564)		—		(1,159,739)		(11,596)
Operating expenses		(12,875,410)		—		(15,179,365)		(56,833)
Other items		1,393,563		—		317,598		27,821
Current income tax recovery		—		—		—		—
Deferred income tax recovery		—		—		—		—
Net (loss)/income		(12,311,634)		—		(17,918,686)		(46,921)
FX translation		37,307		—		471		(6,321)
Comprehensive (loss)/income	$	(12,274,327)	$	—	$	(17,918,215)	$	(53,242)

	March 31, 2023				December 31, 2022
	Electric		Custom Built		Electric		Custom Built
	Vehicles		Vehicles		Vehicles		Vehicles
Inventory	$	4,286,597	$	—	$	4,233,055	$	—
Plant and equipment, net		16,393,277		—		16,452,477		—
Operating lease right-of-use assets		8,559,312		—		9,031,277		—
Other assets		4,611,173		—		5,093,825		—
Total assets	$	162,235,725	$	—	$	181,186,106	$	60,323

Schedule of sales to unaffiliated customers and plant and equipment and right-of-use assets

Sales to unaffiliated customers:

	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
United States	$	504,427	$	940,134
Canada		—		98,509
Total	$	504,427	$	1,038,643

Plant and equipment and right-of-use assets:

	March 31, 2023		December 31, 2022
United States	$	22,743,701	$	23,113,904
Canada		2,206,059		2,366,861
Other foreign countries		2,829		2,989
Total	$	24,952,589	$	25,483,754

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Fair value (Tables)

3 Months Ended

Mar. 31, 2023

Fair value

Schedule of financial liabilities measured at fair value on a recurring basis

The following table presents the hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of March 31, 2023:

	Level 1		Level 2		Level 3		Total
Liabilities:
Share-based compensation liability	$	—	$	58,248	$	—	$	58,248

The following table presents the hierarchy for the Company’s financial liabilities measured at fair value on a recurring basis as of December 31, 2022:

	Level 1		Level 2		Level 3		Total
Liabilities:
Share-based compensation liability	$	—	$	76,476	$	—	$	76,476

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Nature and continuance of operations (Details)		1 Months Ended
	Apr. 14, 2023 item	Dec. 31, 2022 USD ($)
Nature and continuance of operations
Number of retailed G3 SOLO vehicles decided to repurchase | item	429
Number of square foot facility for manufacture of E4 | $		235,000

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Cash and cash equivalents and restricted cash (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Cash and cash equivalents and restricted cash
Cash and cash equivalents	$ 111,209,820	$ 134,255,538
Restricted cash	1,715,711	515,449
Total cash, cash equivalents and restricted cash	$ 112,925,531	$ 134,770,987	$ 194,960,090	$ 222,219,684

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Prepaid expenses and other current assets (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Prepaid expenses and other current assets
SOLO vehicle deposit (at supplier)	$ 7,133,451	$ 7,133,451
Battery cell deposit	247,036	300,000
Prepaid insurance	1,531,542	1,095,152
Prepaid rent and security deposit	480,330	495,112
Cloud computing assets	1,373,030	1,234,039
Other prepaid expenses	4,418,764	1,133,096
Prepaid expenses and other current assets	$ 15,184,153	$ 11,390,850

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Inventory, net (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Inventory, net
Parts and batteries	$ 1,531,597		$ 1,242,055
Vehicles	2,755,000		18,022,771
Inventory provision			(15,031,771)
Inventory, net	4,286,597		$ 4,233,055
Inventory write-downs	$ 0	$ 1,451,336

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Plant and equipment (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Plant and equipment
Plant and equipment, gross	$ 19,551,562	$ 19,365,580
Less: accumulated depreciation	(3,158,285)	(2,913,103)
Plant and equipment, net	16,393,277	16,452,477
Furniture and equipment
Plant and equipment
Plant and equipment, gross	3,692,816	2,117,901
Computer hardware and software
Plant and equipment
Plant and equipment, gross	1,307,981	1,381,786
Vehicles
Plant and equipment
Plant and equipment, gross	689,739	1,046,817
Leasehold improvements
Plant and equipment
Plant and equipment, gross	12,956,694	12,862,333
Production tooling and molds
Plant and equipment
Plant and equipment, gross	$ 904,332	$ 1,956,743

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Plant and equipment- Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Plant and equipment
Depreciation expense	$ 582,903	$ 1,036,283
Loss on disposal	(93,367)
Production tooling and molds
Plant and equipment
Production tooling was transferred to equipment	$ 949,554

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Other assets (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Other assets
Security deposit	$ 1,161,000	$ 1,161,000
Cloud computing assets	3,438,216	3,920,869
Intangible assets	11,956	11,956
Other assets	4,611,172	$ 5,093,825
Amortization of capitalized cloud computing assets	$ 343,661		$ 134,071

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Trade payables and accrued liabilities (Details)	Apr. 14, 2023 item	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Trade payables and accrued liabilities
Trade payables		$ 374,982	$ 3,795,772
Recall provision		8,915,044	8,915,044
Accrued liabilities		2,391,312	6,635,654
Trade payables and accrued liabilities		$ 11,681,338	$ 19,346,470
Number of vehicles sold | item	429

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Leases - Components of lease expense (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating lease expense
Operating lease expense	$ 848,620	$ 286,878
Short-term lease expense	338,875	388,920
Operating lease expense	$ 1,187,495	$ 675,798

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Leases - Weighted-average remaining lease term and discount rate (Details)	Mar. 31, 2023	Mar. 31, 2022
Leases
Weighted average remaining operating lease term (in years)	8 years 10 months 17 days	9 years 4 months 28 days
Weighted average operating lease discount rate	10.29%	10.28%

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Leases - Maturities of operating lease liabilities (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Maturity of operating lease liabilities
2023 (remaining nine months)	$ 2,363,196
2024	3,004,150
2025	2,933,878
2026	2,996,552
2027	2,748,958
Thereafter	15,706,015
Total minimum lease payments	29,752,749
Less: interest	11,244,037
Present value of lease obligations	18,508,712
Less: Current portion	1,288,398	$ 810,677
Long-term portion of lease obligations	$ 17,220,314	$ 17,528,282

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Leases - Additional information (Details) - Operating leases for its engineering center, corporate offices, manufacturing warehouse facility, and kiosk locations	Mar. 31, 2023
Minimum
Leases
Lease term	1 year
Maximum
Leases
Lease term	11 years

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Contract termination liability (Details) - USD ($) $ in Millions		3 Months Ended
	Dec. 20, 2020	Mar. 31, 2023	Dec. 20, 2022
Contract termination liability
Estimate of costs associated with concluding the Manufacturing Agreement			$ 22.8
Termination provision	$ 15.7	$ 15.7

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Share capital and other components of equity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share capital and other components of equity
Common share, shares issued	119,287,917		119,287,917
Common share, shares outstanding	119,287,917		119,287,917
Preferred share, shares issued	0		0
Preferred share, shares outstanding	0		0
Proceeds from issuance of common shares for options exercised		$ 295,516
Common shares issued	0	(27,077)
Decreased share capital		$ (20,786)
Number of common stock issued on exercise of each warrant	1
Share options
Share capital and other components of equity
Shares issued pursuant to exercise of options (in shares)	0	1,245,455
Proceeds from issuance of common shares for options exercised		$ 295,516

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Share capital and other components of equity - Warrants Outstanding (Details)	Mar. 31, 2023 $ / shares shares
Share capital and other components of equity
Number of warrants outstanding	5,395,481
Number of warrants exercisable	5,395,481
October 31, 2017
Share capital and other components of equity
Number of warrants outstanding	125,000
Number of warrants exercisable	125,000
Exercise price | $ / shares	$ 15
August 8, 2018
Share capital and other components of equity
Number of warrants outstanding	4,513,253
Number of warrants exercisable	4,513,253
Exercise price | $ / shares	$ 4.27
November 9, 2018
Share capital and other components of equity
Number of warrants outstanding	7,440
Number of warrants exercisable	7,440
Exercise price | $ / shares	$ 3.2
November 9, 2018
Share capital and other components of equity
Number of warrants outstanding	749,788
Number of warrants exercisable	749,788
Exercise price | $ / shares	$ 2.56

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Stock-based compensation - Total stock-based compensation recognized in the consolidated statements of operations and comprehensive loss (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based payments
Share-based compensation expense recorded	$ 874,879	$ 1,206,547
General and administrative expenses
Share-based payments
Share-based compensation expense recorded	771,940	1,073,717
Research and development expenses
Share-based payments
Share-based compensation expense recorded	64,275	161,480
Sales and marketing expenses
Share-based payments
Share-based compensation expense recorded	$ 38,664	$ (28,650)

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Stock-based compensation - Stock options (Details) - Stock options	3 Months Ended
	Mar. 31, 2023 shares
Stock-based compensation
Common stock reserved for issuance	30,000,000
Expiration period	10 years
Exercise period	90 days
Number of common share per award	1

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Share-based payments - Details of stock options outstanding (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock-based compensation
Number of options outstanding	14,224,389
Number of options exercisable	8,923,444
Recognized stock-based compensation expense	$ 874,879	$ 1,206,547
Stock options
Stock-based compensation
Recognized stock-based compensation expense	$ 661,652	$ 905,522
$2.00 CAD
Stock-based compensation
Exercise price	$ 2.00
Weighted average contractual life	1 year 2 months 4 days
Number of options outstanding	65,000
Number of options exercisable	65,000
$0.535 USD
Stock-based compensation
Exercise price	$ 0.99
Weighted average contractual life	6 years 11 months 23 days
Number of options outstanding	500,000
$0.99
Stock-based compensation
Exercise price	$ 0.99
Weighted average contractual life	6 years 9 months 21 days
Number of options outstanding	215,367
Number of options exercisable	62,812
$1.08
Stock-based compensation
Exercise price	$ 1.08
Weighted average contractual life	6 years 6 months 21 days
Number of options outstanding	297,050
Number of options exercisable	105,198
$1.11
Stock-based compensation
Exercise price	$ 1.11
Weighted average contractual life	6 years 8 months 8 days
Number of options outstanding	3,750,000
$1.50
Stock-based compensation
Exercise price	$ 1.50
Weighted average contractual life	6 years 4 months 2 days
Number of options outstanding	674,815
Number of options exercisable	340,382
$1.91
Stock-based compensation
Exercise price	$ 1.91
Weighted average contractual life	2 years 9 months 18 days
Number of options outstanding	2,955,000
Number of options exercisable	2,802,225
$1.94
Stock-based compensation
Exercise price	$ 1.94
Weighted average contractual life	6 years 18 days
Number of options outstanding	154,338
Number of options exercisable	73,948
$2.13
Stock-based compensation
Exercise price	$ 2.13
Weighted average contractual life	5 years 10 months 6 days
Number of options outstanding	48,407
Number of options exercisable	25,205
$2.45
Stock-based compensation
Exercise price	$ 2.45
Weighted average contractual life	3 years 4 months 6 days
Number of options outstanding	1,250,000
Number of options exercisable	1,250,000
$2.53
Stock-based compensation
Exercise price	$ 2.53
Weighted average contractual life	3 years 4 months 9 days
Number of options outstanding	50,000
Number of options exercisable	50,000
$2.62
Stock-based compensation
Exercise price	$ 2.62
Weighted average contractual life	5 months 23 days
Number of options outstanding	700,000
Number of options exercisable	700,000
$3.01
Stock-based compensation
Exercise price	$ 3.01
Weighted average contractual life	1 year 8 months 4 days
Number of options outstanding	750,000
Number of options exercisable	750,000
$3.40
Stock-based compensation
Exercise price	$ 3.40
Weighted average contractual life	2 years 1 month 13 days
Number of options outstanding	1,035,000
Number of options exercisable	1,035,000
$3.41
Stock-based compensation
Exercise price	$ 3.41
Weighted average contractual life	4 years 3 months 21 days
Number of options outstanding	549,922
Number of options exercisable	505,343
$3.55
Stock-based compensation
Exercise price	$ 3.55
Weighted average contractual life	5 years 3 months 18 days
Number of options outstanding	5,000
Number of options exercisable	2,835
$3.56
Stock-based compensation
Exercise price	$ 3.56
Weighted average contractual life	5 years 7 months 13 days
Number of options outstanding	150,861
Number of options exercisable	88,742
$3.77
Stock-based compensation
Exercise price	$ 3.77
Weighted average contractual life	1 year 8 months 4 days
Number of options outstanding	50,000
Number of options exercisable	50,000
$4.15
Stock-based compensation
Exercise price	$ 4.15
Weighted average contractual life	1 year 8 months 4 days
Number of options outstanding	750,000
Number of options exercisable	750,000
$5.00
Stock-based compensation
Exercise price	$ 5.00
Weighted average contractual life	8 months 1 day
Number of options outstanding	193,629
Number of options exercisable	193,629
$7.75
Stock-based compensation
Exercise price	$ 7.75
Weighted average contractual life	4 years 10 months 20 days
Number of options outstanding	30,000
Number of options exercisable	23,125
$9.60
Stock-based compensation
Exercise price	$ 9.60
Weighted average contractual life	1 year 9 months 7 days
Number of options outstanding	50,000
Number of options exercisable	50,000

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Stock-based compensation - Number and weighted average share prices of DSUs (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2020
Number of RSU
Number of DSUs outstanding		111,231	127,460
Number of DSUs exercisable	111,231	127,460
Weighted average share price
DSUs outstanding		$ 3.16	$ 3.02
DSUs exercisable	$ 3.16	$ 3.02
Recognized stock-based compensation expense	$ 874,879	$ 1,206,547
DSUs
Number of RSU
Granted	0
Weighted average share price
Recognized stock-based compensation expense	$ 0	$ 97,280

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Stock-based compensation - Changes in RSUs (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2020
Number of RSU
RSUs outstanding		111,231		127,460
RSUs exercisable	111,231	127,460
Weighted average share price
Recognized stock-based compensation expense	$ 874,879	$ 1,206,547
RSUs
Number of RSU
RSUs outstanding		1,875,000	1,875,000
Weighted average share price
RSUs outstanding		$ 1.02		$ 1.02
Deemed value		$ 1.02		$ 1.02
Recognized stock-based compensation expense	$ 213,227	$ 203,745

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Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue
Revenue	$ 504,427	$ 1,038,643

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Interest income (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Interest income
Interest income	$ 1,438,838	$ 86,245

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Current income tax expense (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current income tax expense
Deferred tax liability	$ 0	$ 0
Current liability for federal state income taxes	28,909,744	36,196,891
U.S
Current income tax expense
Current liability for federal state income taxes	$ 0	$ 0

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Basic and Diluted loss per share - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Basic and Diluted loss per share
Net loss attributable to common shareholders, basic	$ 12,311,634	$ 17,965,607
Weighted average number of shares outstanding - basic	119,287,917	118,451,752
Weighted average number of shares outstanding - diluted	119,287,917	118,451,752
Stock options
Basic and Diluted loss per share
Antidilutive Securities	14,224,389	11,151,488
Warrants
Basic and Diluted loss per share
Antidilutive Securities	5,395,481	7,158,021
DSUs
Basic and Diluted loss per share
Antidilutive Securities	111,231	93,956
RSUs
Basic and Diluted loss per share
Antidilutive Securities	1,875,000	522,385

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Basic and Diluted loss per share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Basic and Diluted loss per share
Net loss	$ (12,311,634)	$ (17,965,607)
Weighted average number of shares outstanding - basic	119,287,917	118,451,752
Weighted average number of shares outstanding - diluted	119,287,917	118,451,752
Loss per share - basic	$ (0.10)	$ (0.15)
Loss per share - diluted	$ (0.10)	$ (0.15)

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Segmented information - Operations of each of the Company's reportable business segments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Segmented information
Revenue	$ 504,427	$ 1,038,643
Gross profit	96,777	(1,903,493)
Operating expenses	(13,801,974)	(16,407,533)
Other items	(24,410)	42,409
Net loss	(12,311,634)	(17,965,607)
Foreign currency translation	37,307	(5,850)
Comprehensive loss	(12,274,327)	(17,971,457)
Inventory	4,286,597		$ 4,233,055
Plant and equipment, net	16,393,277		16,452,477
Operating lease right-of-use assets	8,559,312		9,031,277
Other assets	4,611,172		5,093,825
Total assets	162,235,724		$ 181,246,429
Electric Vehicles
Segmented information
Revenue	504,427	871,945
Gross profit	(96,777)	(1,897,180)
Depreciation and amortization	(926,564)	(1,159,739)
Operating expenses	(12,875,410)	(15,179,365)
Other items	1,393,563	317,598
Net loss	(12,311,634)	(17,918,686)
Foreign currency translation	37,307	471
Comprehensive loss	(12,274,327)	(17,918,215)
Inventory	4,286,597	4,233,055
Plant and equipment, net	16,393,277	16,452,477
Operating lease right-of-use assets	8,559,312	9,031,277
Other assets	4,611,173	5,093,825
Total assets	$ 162,235,725	181,186,106
Custom Built Vehicles
Segmented information
Revenue		166,698
Gross profit		(6,313)
Depreciation and amortization		(11,596)
Operating expenses		(56,833)
Other items		27,821
Net loss		(46,921)
Foreign currency translation		(6,321)
Comprehensive loss		(53,242)
Total assets		$ 60,323

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Segmented information - Sales to unaffiliated customers and Plant and equipment and right-of-use assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Sales to unaffiliated customers and Plant and equipment and right-of-use assets
Sales to unaffiliated customers	$ 504,427	$ 1,038,643
Plant and equipment and right-of-use assets	24,952,589		$ 25,483,754
U.S operations
Sales to unaffiliated customers and Plant and equipment and right-of-use assets
Sales to unaffiliated customers	504,427	940,134
Plant and equipment and right-of-use assets	22,743,701		23,113,904
Canadian operations
Sales to unaffiliated customers and Plant and equipment and right-of-use assets
Sales to unaffiliated customers		$ 98,509
Plant and equipment and right-of-use assets	2,206,059		2,366,861
Other foreign countries
Sales to unaffiliated customers and Plant and equipment and right-of-use assets
Plant and equipment and right-of-use assets	$ 2,829		$ 2,989

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Fair value - Financial liabilities measured at fair value on a recurring basis (Details) - Recurring - Share-based compensation liability - USD ($)	Mar. 31, 2023	Mar. 31, 2022
Fair value
Total	$ 58,248	$ 76,476
Level 2
Fair value
Total	$ 58,248	$ 76,476

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Fair value - Additional information (Details)	Mar. 31, 2023	Dec. 31, 2022
Fair value
Percentage of reasonably possible increase in volatility	10.00%	10.00%

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Commitments and contingencies (Details)				3 Months Ended
	Apr. 14, 2023 item	Mar. 03, 2023 USD ($)	Dec. 20, 2020 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Commitments and contingencies
Number of retailed G3 SOLO vehicles under the buy-back program | item	429
Recall provision recorded for G3 SOLO vehicles under the buy-back program				$ 8,915,044	$ 8,915,044
Number of days after which agreement can be terminated		30 days
Amount claimed by Zongschen			$ 22,800,000
Accrual liability of termination provisions			$ 15,700,000	15,700,000
Design Agreement
Commitments and contingencies
Estimated cost of design, development, and manufacturing services		$ 13,692,000
Percentage of estimated cost of design, development, and manufacturing services that will be paid during 2023		80.00%
Commitments				$ 9,584,400

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Subsequent events (Details) - USD ($)	May 08, 2023	Mar. 31, 2023	Dec. 31, 2022
Subsequent events
Recall provision		$ 8,915,044	$ 8,915,044
Zongshen
Subsequent events
Amount of previously paid deposits forfeited	$ 7,100,000
Claim amount provided	$ 1,000,000.0
Time required to pay cash portion	10 days
Vehicle buy-back program for all 429 G2 and G3 SOLO vehicles sold since the release in 2021
Subsequent events
Recall provision		$ 8,915,044	$ 8,915,044
Subsequent events | Zongshen
Subsequent events
Cash payable	$ 8,000,000.0