Qwahzi has an excellent list of notes on the earnings call on Reddit. I'd like to highlight some things that stuck out for me on the 2021 Stakeholder Webinar that took place on March 31st, 2022.
The first thing that struck me was a wall of 8 men and 0 women! One joked about the screen looking like the Brady Bunch intro, except even in the 60's TV execs were smart enough to employ a 50% female cast.
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| Missing representation from 50% of the population. |
Mark Frohnmayer noted that the Arcimoto employees were rocking. They are full tilt moving forward with many projects and irons in the fire.
Mark also found that some companies that want Deliverators are now looking at the Mean Lean Machine (MLM) 3 wheeled tilting e-bike as an option. Arcimoto is looking at making multiple prototypes by May. There will likely be a tiered approach to pricing. In looking at premium e-bikes, they run $8000 on up, and Mark thinks MLM will be a premium e-bike in that class (13:40). He also thinks the sweet spot in the market is between $3000-$6000. Mainline would be in that range. Once in mass production they will be aiming in the $2000-$3000 range. Granted, Arcimoto has not reached any sort of mass production level in its short lifetime nor met any timeline goals, so I wouldn't hold my breath. That said, they are moving forward in all their goals so I certainly would never write them off.
Revenue potential for the MLM is $400,000-$500,000, assuming they get to mass production.
Thoughts: It sounds like the MLM will be released at $8000 and they will try to bring down the price to $2000-$3000. The first released version might be even more than $8000 and sold in a very limited market to those with money to get "Beta" versions and be first to own one. I think the MLM is a way to utilize the factory and build something that more people can buy with a higher margin of profit.
Arcimoto has been financed incrementally over the years. They will target DOE (Department of Energy ATVM loan) for big capital expenditures. The ATVM loan will allow cost shifting of expensive parts of the program to next year and beyond. This won't start until phase 2 build out in 2023.
The ATVM loan paperwork has not be submitted as a final application. Pieces that ATVM can't cover will also need to find funding. ATVM only covers growing scale and build out of the factory. The funds would be used next year. There is a lot of documentation in the works and a bunch ready to be submitted.
More info from Mark:
Thoughts: The ATVM loan is ONLY for scaling production and will not be needed until next year at earliest. It sounds like they are wanting to submit their final application when they know the DOE will approve a loan because all the paperwork shows that the company is worthy of receiving a loan.
Executive team is growing. Kevin O'Rourke is an executive that has a background in commercial fleet expansion. He believes fleet operations will be less expensive for companies that have fleets and need to maintain them. In addition to Arcimoto offering maintenance for fleets, they are looking to offer logistics, insurance, telematics, and more.
Thoughts: It sounds like the shift to fleet and rentals will take a vast majority of produced sales. They are able to offer package deals and make more money with fleet sales and leases than with individual consumer sales. Maintenance is also much easier with fleet single point of contact than each individual owner.
Arcimoto is targeting 2025 for sub $15,000 prices. As far as charging is concerned, it would make sense to share Tesla home charging plugs. Platform 1.x program will offer faster charging, maybe even fast charging.
Thoughts: Faster charging will not be available until Platform 1.x If you can hold out 2 or more years, I would definitely wait for next generation offerings.
Q1 production was affected by the shift to RAMP and validation of new battery modules. But by 4/20/22, production should start with new modules. Production for 2022 should triple from 2021 (331) to about 1000 for 2022. And 7x of 2022 for 2023 (7000) using Platform 1.x and 50,000 by 2025.
Thoughts: I think their production goals are laudible but more than likely they will not hit those targets. They might make 1000 for 2022 but I'm guessing between high prices depressing consumer purchasing and fleet sales being affected by a likely future recession, they might hit a 5000 production number for 2023. I doubt they will get to 50,000 production by 2025.
MLM is targeted with an end of year "Signature Series" release. If you remember, the Signature Series FUV in 2019 were sold for approximately $45,000 each. The MLM Signature Series will likely be very, very expensive with bells and whistles. Mark alludes to the fact it will be a limited Signature Series and that you will see why it will be launched in this way when it gets launched.
Thoughts: The $6000-$8000 price for the MLM will make it a serious niche product. If they can release it for $4900 it might sell very well but I don't think they can as the cost of making it with 3 hub motors and other specialized parts drive up the cost of production. MLM is simply a really expensive product. That said, our Precore elliptical cost $6800 new so maybe they have a point.
Prototype doors were shown at RAMP it Up Event. Testing a few approaches for current FUV Platform 1 - in which one or more approach might be offered. That said Platform 1.x will have windowed doors offered immediately as an option.
Thoughts: I'm surprised there is a chance they might release a vinyl zippered upper or full door solution for the Platform 1 FUVs. If they do, they'll be super expensive.
Cylindrical cell power pack architecture are done with DW Fritz. They are exploring an agreement to cover the license of the design and the automated production line. There is a lot left to do on it and they will give an update at the end of the year.
Thoughts: This is in such early days of making these batteries that it isn't worth talking about. We'll see where this is in another year or 2 or 3.
May 1st lease agreements in Hawaii will allow future rentals and sales. Rentals are for brand awareness & try before buy. Also rentals can lead to profitability.
Thoughts: Hawaii is an excellent place to have rentals and should be profitable. Hawaii has current gas prices of about $5.20 a gallon so an open air FUV would be appealing to tourists.
Volume, assembly optimization, simplification of chassis, and changes in material production methods are all things they are working on. Battery, electronics, and motors will be simplified and lowered in material costs in Platform 1.x.
Thoughts: These items have been discussed by Arcimoto for months now. It is why scaling up will take several years.
Fleet/commercial pricing structure is higher than consumer vehicles.
Thoughts: This is why they are pivoting and focusing on fleet/commercial/rental vehicles. They make more money there than with selling one vehicle at a time to consumers.
Over the next 18 months, Arcimoto will have a spending rate around $100M into order to get into a "positive run rate." Most of that spending is that in capital expenditures. There will be more scaling and investments after that. R & D is increasing quite a bit over that period.
Thoughts: A positive run rate is where you predict your revenue based on previous quarters. I'm assuming Mark is saying they will be profiting (instead of losing money) if they spend $100M to build up production.
Built and completed 25 vehicles in Q1 2022. They made them while dialing in the RAMP manufacturing plant.
Smoke Jumper is not at certification stage yet. New team in California is helping determine requirements for users. Configuration, testing, and regulatory stuff will be done in the future.
Thoughts: We knew they wouldn't make many in Q1 2022 due to the move and having to reformulate/testing/validation of new battery modules. I don't expect to hear much about the Smoke Jumper moving forward for this year. I think they have too many irons in the fire.
Research and development spending at Arcimoto has been smaller compared to other organizations in the same field. MLM is a small part of the R&D spending. Tilting Motor Works purchase is a part of the MLM cost. Will spend as much or more on R&D as 2021.
Thoughts: Yes, the MLM will cost R&D money the same as Platform 1.x, Smoke Jumper, door development, cylindrical batteries, etc. Not only will there be more money for development, but this stuff will take plenty of time. The company is tiny compared to big vehicle manufacturers like Tesla, GM, Ford, Toyota, etc.
Timeline for Directed Technologies in Australia and requirements for certification in that country is not set yet. Still need to tune to their requirements and still need to meet Australian requirements.
Thoughts: It's interesting that Mark gave no timeline. This might be because every time he gives a timeline, they don't meet timeline goals.
6 comments
Thanks for the evaluation of the product and the meeting recaps. Still love the looks and feel of the ride ( test drove in Eugene in January ). I know it will do very well here in Hawaii. In hope it arrives soon, so we can all RAMP IT UP in production and stock price growth...
Let's GO......
I have lost faith in the Arcimoto investment -- i went in rather excited a few years ago -- i wish i had sold during the euphoria EV bubble. i can't say i have much optimism anymore - i have driven one - i think at 10-12K these things would be everywhere. I like the company, but i don't think they are going to do investors any favors in the next year. not at their fault, of course, after all i can take responsibility and say i made a bad investment. but I can't say i am optimistic at this point. I am glad they actually bothered to dress up for the last call. I am pretty casual, but if you are going to miss projections all the time it would be nice if you at least put on suit and made those of us who pushed our money on this trash pile think you were still willing to make yourself slightly uncomfortable in an effort to help push your company forward and to get the suits excited. i wish i had invested in something else -- i was going to use the money on a house down payment someday, the housing market has exploded and my FUV stock is worth about half of what i invested... lesson learned. don't actually believe they feel urgency, and don't think mark is all that sympathetic to those of us who wish he would be more professional. meanwhile, i put in more $ than Gali, who just uses his platform to mainly babble about his telsa religion all the time. the guy makes bank, but i don't get the impression he helps with much in terms of selling FUVs - he said over a year ago i think that he was ordering one -- but he hasn't even taken delivery of his, and he is worth a lot of tesla $.
Sorry - correction in the interest of being truthful, I bought in stock in late 2020 - so it hasn't been long enough for me to say a few years ago -- and i wish i hadn't sarcastically said tesla was a religion -- i think it a good company, apologies to all for the venting. just super frustrated for thinking arcimoto was a good idea during the small cap explosion. my family will still be able to buy a home without this $fuv money. but yeah, can't say i am an excited FUV person anymore. i will cancel my preorder soon as my family is relocating from Oregon to wyoming anyway and they don't sell there and it probably wouldn't be the best for their climate.
Ok - last thought - then i will lay off. I think from what i have seen of mark that is he is a a great human being - truly. Seems like a really kind, good guy. there are times i wish he was a more traditional CEO, but i guess a more traditional CEO wouldn't have gotten this far with this crazy 3 wheel idea. Just think for upcoming scaling stages they need more of a drill sargent. hope all you arc investors do well - i still have shares but honestly wishing i could just sell it all at 12 bucks a share right now. not planning to hold it till 10x like some are hoping. just want my money back at this point so i can buy my kids ice cream and ride my pedal bike (non electric - ha)
oh - not really don't ranting yet - the internet is great for crazy people like me -- last item. i am worried about our planet -- and while i am upset about the money part of this stock investment right now, i do want them to offer efficient planet saving solutions. this is important... so good luck arcimoto and the believers. take care all. peace and love and grit.
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