Arcimoto Gets More Funding, Goes Back Into Production. Is This Part of a Bigger Trend?
Arcimoto, the 3-wheeled tandem-seating EV company, has been deep into financial problems and was on the brink of bankruptcy. The company had moved into a larger production facility last year, but was forced to pause production entirely due to insufficient funds at the beginning of 2023. This has led to job cuts and furloughs for workers as well as a decline in their stock value.
The Q2 report also showed that the company continues to lose large amounts of money with low production and delivery volumes leading analysts to say that Arcimoto may have to seek bankruptcy protection from creditors. In other words, things looked very bleak for the company, and many people thought it was finished.
But, like other longshot companies in recent times, Arcimoto managed to get itself back on track, at least for now. The company released a press statement stating that it plans to start producing FUV and Deliverator vehicles for 2023, with the first deliveries scheduled for March.
“As we begin first deliveries in 2023, we continue to focus on improving vehicle drive quality, manufacturing cost down efforts and increasing our brand reach to grow both our consumer and commercial sales volume,” said Jesse Fittipaldi, Arcimoto Interim CEO. “Our efforts will be directed at driving sales of FUV and Deliverator and lowering manufacturing costs on these products this year.”
On top of the announcement that it is restarting production and deliveries, Arcimoto also announced a technical improvement. The highlight of the model year 2023 product update is the introduction of a new steering system that promises improved handling and maneuverability at all speeds, while also reducing steering effort by over 40% compared to previous models.
“During our internal testing, and pilot rollout the feedback from drivers was resoundingly positive in terms of feel and responsiveness,” said Dwayne Lum, Arcimoto Chief Product Officer. “Additionally, this is not restricted to 2023 models. Our team committed to creating a post-production version that prior model year FUV owners could elect to deploy for a small fee through our service organization.”
How Arcimoto Pulled It Off
Many of us thought the company was done for, and didn’t see a path for the company to return to production. So, readers are probably wondering where it got the money.
A couple days ago, financial news outlets reported that Arcimoto managed to come up with about $6 million of additional funding. The company did this with a real estate loan on the company’s factory in Oregon. Between this and a financing round that closed last month, it was able to fund operating expenses enough to get the factory going again.
“We announced this week the start of 2023 production with new steering features and improvements on the FUV and Deliverator. This additional funding paired with our efforts in reducing vehicle costs and increasing sales gives the team practical confidence as we continue to focus on the growth of FUV and Deliverator programs,” said Jesse Fittipaldi, Arcimoto Interim CEO.
Arcimoto Is Not The Only Similar Company To Pull Its Butt Out Of The Fire Lately
Solar-electric and three-wheeled car companies have faced a challenging 2022 and early 2023, with valid reasons for skepticism around the feasibility of onboard solar panels to power electric vehicles, and the desirability of small three-wheel two-seat vehicles. Investor confidence has been low and without funding, bringing a vehicle to production can become an insurmountable challenge. COVID-related issues have further exacerbated these challenges, impacting supply chains and labor across the industry.
In response to the lack of investor support, Sono Motors (a company making a four-wheel solar-battery car) launched the #SaveSion crowdfunding campaign. Although the company did not reach its fundraising goal with pre-sales paid in full, the fact that customers were willing to pay in full for a vehicle at such an early stage in the process may have been enough to reignite investor interest and bring them back to the table.
Aptera also faced production funding challenges, with an estimated $40-50 million needed to bring its vehicle to market. However, the company was able to secure a grant of over $20 million from the State of California and has raised over $4 million through its Accelerate Aptera investment drive, helping to bridge the gap in production funding.
Then we saw Lightyear, a solar car company that had entered bankruptcy, use bankruptcy to restructure and make a new company that focuses on the lower-priced Lightyear 2. In this case, Lightyear put up its intellectual property as collateral, which could create a variety of challenges going forward.
So, this news from Arcimoto is part of a larger story of non-traditional longshot companies being more resilient than many of us thought. Just when we thought they were done for, they surprised us and came up to throw some more punches.
This definitely doesn’t guarantee that any of them will survive and thrive long term, but it would be hard to argue that they aren’t surprising people in February 2023.
Why This Could Be Great News For The Environment
This trend of companies making smaller and more efficient vehicles and staying alive and in the game (at least for now) is great news for anybody who cares about things like climate change.
In developing countries, rightsized vehicles are the norm. This isn’t out of some noble concern for the environment in many cases as much as that they can’t afford a bigger vehicle, but the resulting efficiency is still efficiency just the same. The problem with popular vehicles like the Honda SuperCub (and its underbone motorcycle cousins that dominate global motorized vehicle sales) is that for a long time they ran relatively dirty two-stroke ICE engines.
These less traditional vehicles, especially ones at lower price points like the Arcimoto, take this form of efficiency and clean it up. This is good for people trying to use less energy in the developed world, and it could also lead to better access to electrification for people who don’t have the money for something like a Tesla or even a busted old Nissan LEAF.
The money challenges are still going to be a real hassle for these companies in the near term, but any of them who can break out could do a lot of good in the world.
Image courtesy of Arcimoto
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