UQM shares soar following $400M supply deal with Chinese firm

LONGMONT — Shares of troubled Longmont-based electric motor maker UQM Technologies Inc. (NYSE: UQM) doubled in value late in the day Monday following the announcement that the company has inked a deal with a Chinese bus manufacturer that could be worth more than $400 million over a 10-year period.

UQM shares closed at $1.30 Monday, up 67 cents from Friday’s close. The company’s share price climbed another 29 cents in pre-market trading Tuesday morning.

The closing price fell just short of UQM’s 52-week high of $1.32 but was still less than half of the company’s 2014 high of $2.96.

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UQM, which hasn’t yet released its third-quarter earnings, in July reported a second-quarter loss of $2.2 million and a decline in revenue of more than 25 percent to $741,000. That report came not long after UQM had removed chief executive Eric Ridenour.

The new deal with ITL Efficiency Corp., gives UQM a much-needed boost. ITL is a subsidiary of China-based Eastlake New Energy, which makes a variety of electric vehicles. ITL supplies electric-drive systems to Eastlake and its subsidiaries.

UQM has received a purchase order for the first 3,000 units in its deal with ITL. Development, testing and certification are set to begin in 2016, with production starting in early 2017. UQM will make the motors in Colorado through 2017, but plans to produce them in China beginning in 2018

“The signing of this supply agreement with ITL is a major milestone for UQM, and is the result of many years of focused attention to the China market,” chief operating officer Joe Mitchell, who is serving as interim CEO, said in a press release. We believe this agreement is a game-changer for UQM and puts us on a realistic and timely path to long-term viability and profitability.”