Volcon Inc (NASDAQ: VLCN) has signed a new distribution agreement with Super Sonic Company Limited.
Shares of the all-electric light utility vehicle (LUV) maker are up more than 150% on Tuesday.
The deal makes Volcon an “exclusive distributor” of Super Sonic’s golf carts in the US.
However, the latter remains free to sell products not branded as Volcon’s to other customers as long as it pays 5.0% of the order price as a royalty to the Texas-based company.
Despite today’s surge, Volcon stock is down about 40% versus six months ago.
Why does Super Sonic news matter for Volcon stock?
Volcon is excited to be working with Super Sonic as “their Vietnam facility provides a competitive advantage due to lower tariffs on importing units compared to units from other Asia countries.”
Note that Super Sonic will receive the EV stock as it continues to order Volcon products in 2025. For every 1,000 units, it will receive about 1.0% of VLCN at the end of each quarter.
Additionally, the golf carts manufacturer will receive a warrant to scoop up 10% of Volcon shares at a discount if it orders 10,000 units by February 1st, 2026, according to its press release on Tuesday.
Teaming up with Super Sonic is meaningful for Volcon stock also because it’s working on new designs that “could revolutionize the future of golf cart performance, style, and comfort.”
VLCN has been in a sharp downtrend
Today’s news brings much-needed relief to Volcon stock that’s been struggling in the face of deteriorating financial strength.
In October, the EV company reported its earnings for the third quarter that missed Street estimates. VLCN’s adjusted earnings and revenue came in down 3.1% and 8.3% respectively (year-on-year) for Q3.
More importantly, the ePowersports firm cited weather disruptions and lowered its full-year guidance for adjusted EBITDA to about $2.0 billion at the time.
Volcon stock doesn’t pay a dividend either to appear any more attractive to income investors.
Is it worth investing in Volcon stock?
On Tuesday, Volcon also confirmed that it will a board seat to Super Sonic if its orders surpass 10,000 units in 2025.
The deal it signed with the subsidiary of ODES Industry today is for a year initially – but can be extended if both parties agree on an annual basis.
Volcon expects to team up with Super Sonic to expand its product line-up beyond the recent launch of its HF1 and strengthen its market position in the global EV sector. According to its CEO John Kim:
Super Sonic (AODES) has a strong history of golf cart sales in the United States, which is why VLCN selected Super Sonic to manufacture our golf carts.
Nonetheless, Volcon stock is not a very widely covered one among Wall Street analysts, which makes it a high-risk stock.
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