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Stock market: Lights dim on wonder stock

Electric vehicles are hot news and the hottest purveyor of that news is electric truck, van and taxi maker Tanfield.

Properly managed, the share price for the Washington, Tyne and Wear, company should be a one-way street.

But when the essential financials were delivered to the market last month, the stock price headed south to half its peak of a year ago.

The consensus now is that Tanfield simply failed to manage the market’s understanding of the figures, rather than there has been a genuine problem.

But this has been a four-year wonder stock that came from nowhere and was riding for a fall.

From manufacturing electric vehicles for airports, Tanfield’s drift to mainstream vehicles started with an electric home delivery vehicle for Sainsbury.

Last year it sold 260.

This year the run rate is already up to 3,000, they say. The target for 2010 is 10,000.

New production capacity is being sought in the north-east of England.

There is already assembly in Northern Ireland and California.

Customers include DHL, TNT, TKMaxx, Royal Mail, Balfour Beatty, and M&S.

There are 15 Smith Electric Vehicles sales depots in the UK.

Tanfield will make electric versions of the Ford Transit and of the Manganese Bronze London cab, with hopes to sell through the Ford franchised network and taxi channels.

In California, the first vehicle will be a 13-tonne truck which will emerge before the end of the year.

But all of this is happening at breakneck speed.

Last year turnover trebled and profits doubled.

Those of us with long memories know that trying to drive new technologies in new production facilities at breakneck speed in the motor industry usually results in someone breaking their neck.

Additionally, the stock market is extremely twitchy and risk averse.

Tanfield is going to have to tread lightly and communicate daily if the flow of investment funds is to follow the action on the ground.

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