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noco-noco to acquire Japanese electric vehicle manufacturer Assemblepoint

November 27, 2023

SINGAPORE/JAPAN, November 27, 2023 – noco-noco Inc. (NASDAQ: NCNC, “noco-noco”), a decarbonization solutions provider, has announced its intent to acquire 51% of Assemblepoint Co. Ltd. (“Assemblepoint”), a Japanese electric vehicle (EV) manufacturer with a presence in the Philippines for a consideration of approximately $3.6 million via a share swap arrangement, in a strategic move driven by a shared commitment to address pressing environmental and transportation challenges on a global scale. The acquisition, upon anticipated completion in the first quarter of 2024, is expected to be accretive to revenue growth and earnings in 2024. The proposed acquisition marries noco-noco’s long-lasting and high temperature-resistant battery technology, and Assemblepoint’s rapidly scalable electric "Smart Bus” assembly, where buses are centrally designed in Japan with a commitment to quality and precision, coupled with a locally assembled process at much lower cost.

The Philippines has committed to a 75% reduction in national emissions across key sectors by 2030, but progress has been hampered by bottlenecks like the lack of charging infrastructure and financing to shift to electric vehicles. 

This is where the combined strengths of noco-noco’s battery technology and Assemblepoint’s rapid assembly approach synergize to provide transformative solutions to decarbonize the transportation sector.

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Figure 1: Assemblepoint’s walk-in van in the Philippines

Assemblepoint’s Agile Production Process (APP) allows its team of engineers in Japan to centrally design, project manage, and procure the components and parts for the electric buses, enabling control teams to work with local EV assemblers without the need for heavy equipment and expensive assembly lines typical to in traditional car manufacturing companies. Assemblepoint’s EV buses are designed with swappable battery packs to avoid the long hours needed to charge a bus. The result – a high quality, precision-designed and affordable electric mini-bus that will zip around the congested main roads and through the narrow back roads of the Philippines.

noco-noco's value proposition lies in its ground-breaking X-SEPA™ battery technology. Under rigorous testing, lithium-ion batteries (LiB) embedded with the X-SEPA™ separator and a proprietary electrolyte have shown a fivefold extension of conventional LiBs at sweltering temperatures of 60°C. This breakthrough is particularly significant, given that typical EV batteries experience performance degradation beyond 35°C. In developing economies like the Philippines, where summer temperatures soared to a scorching 50°C in 2022, such X-SEPA™-enhanced batteries redefine the possibilities of sustainable transportation with battery longevity translating to longer leasing duration and directly lowering leasing fees, a win for both the EV buyer and the lessor. In addition, the solution  presents a feasible redeployment of the swappable batteries for second life use in Battery Energy Storage Systems (BESS)  and a force for good to meet the sustainable  energy needs of remote and economically-vulnerable regions of the country.

Once completed, the acquisition will put noco-noco on track to scale up its leasing business across the region. In time, the company aims to expand its presence into fast growing EV markets like Sri Lanka, Kenya, India and the Middle East. The addressable market opened by the acquisition stands to be substantial, with CleanTechnica  reporting that more than six million EVs are forecast to be on roads in the Philippines by 2030, 600,000 of which are electric buses, commercial vehicles, and equipment. The acquisition would initiate with the deployment of 28 units and a 29th vehicle earmarked for Sri Lanka, as a starting point.

Masataka Matsumura, CEO of noco-noco said, “The collaboration between noco-noco and Assemblepoint is not just about combining products; it's about creating a comprehensive offering. Swappable batteries, integrated with emissions reduction strategies, innovative battery solutions, and a battery leasing business model, form the foundation of a symbiotic partnership. Fleet leasing, coupled with carbon credits further enhances this value proposition, creating a holistic solution for customers. This strategic move is underpinned by our end goal of capturing over 10% of the commercial vehicle market in the Philippines by 2030.”

Assemblepoint's CEO, Takashi Miyashita, said, “Many pilot projects have been implemented in the world, but there are very few examples of successful social implementation and business. To ensure that the vehicle sales are profitable, the manufacturing process must be carefully planned and designed – execution is key with cost management tightly controlled. A projection of more than 2,000 units before the end of 2025 with potential offtakers in the mobility, logistics, and energy industries, and with lean and agile manufacturing processes, we can readily replicate the model and scale rapidly to capture the developing and less developed markets providing affordable solutions that also contributes to an upliftment of welfare and economies.”

Completion of the Sale and Purchase Agreement is subject to customary conditions precedent, which includes satisfactory completion of due diligence, and noco-noco having obtained the approval of its shareholders for the transaction and necessary applicable regulatory consents and approval for the transaction.

About noco-noco:

noco-noco Inc. (Nasdaq NCNC) is a decarbonization solutions provider working to accelerate the global transformation to a carbon-neutral economy. From X-SEPA™, a revolutionary battery separator technology designed for long-lasting and high heat-resistant performance, to noco-noco Lease, our leasing platform for green transportation, noco-noco addresses the need for clean, affordable, and sustainable energy solutions. noco-noco is working towards a future where batteries come fitted with IoT devices for data-light, smart energy optimization and usage. That’s sustainability simplified.

See noco-noco.com for more information.

About Assemblepoint:

Assemblepoint Co., Ltd. is an EV manufacturer that makes and sells electric minibuses and minivans under its Japanese brand in the Philippines. Assemblepoint completed its prototype in 2018, and as of 2023, has already delivered vehicles to public buses operators, logistics companies, etc., and has products running on public roads. Assemblepoint is developing business with a focus on the ASEAN region, where the shift to EVs is rapidly advancing.

 

For enquiries:
contactus@noco-noco.com

Safe Harbor Statement:

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When noco-noco Inc. (the “Company”) uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate,” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the third-party wealth management industry in China; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company serves and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

[Correction: An earlier version of this press release published on 27 November 2023 incorrectly stated that 'The Philippines has committed to a 75% reduction in national emissions across key sectors by 2023'. This has now been corrected in the article above.]