Arcimoto, the Oregon-based company which last year launched the Arcimoto FUV (Fun Utility Vehicle), shown also in Rapid Responder and Deliverator versions, announced a “strategic agreement” with Munro & Associates, well known from its Tesla-related expertise.
The main goal of engaging Munro is to “evaluate Arcimoto manufacturing processes and supply chain in order to drive down costs and accelerate scale”.
It sounds reasonable, as so far Arcimoto’s results were not very convincing. According to report for 2019, the company produced 53 retail FUVs and delivered 46 of them (see full report here). During this pivotal year, the number of pre-orders increased by 980 to 4,197 (as of December 31). The company wrote in April that the net loss is $15.3 million at revenues of under $1 million. Worrying is the negative gross margin (hopefully it will improve once the scale is higher).
“Total revenues in 2019 were up 940% to $987,850 as compared to $94,996 in 2018. Sources of revenue in 2019 were $891,356 from the sale of vehicles, including $20,015 of which was with a related party, $49,760 from vehicle delivery charges and merchandise sales, $44,675 from machining and metal work services, and $2,059 from parts and service. The increased revenue in 2019 was largely driven by the sale and delivery of 46 Evergreen Edition FUVs.
The Company incurred a net loss of $15.3 million, or ($0.85) per share, in 2019 versus a net loss of $11.1 million, or ($0.70) per share, in 2018. The increased loss is attributable to additional research and development expenses and expenses incurred to ramp up manufacturing capacity, including the hiring of 25 employees during 2019, offset by lower sales and marketing costs.
The Company had $5.8 million in cash and cash equivalents as of December 31, 2019, compared to $4.9 million cash and cash equivalents as of December 31, 2018.”
Unfortunately, production was suspended in March due to the coronavirus lockdown (initially through April 17, 2020) and Arcimoto was seeking a $30 million federal low-interest loan to scale-up production (the Advanced Technology Vehicles Manufacturing Loan Program). We are not sure whether the production resumed as of June 10, 2020.
In such circumstances, help from Munro & Associates might be extremely valuable support, but only time will tell whether it’s not a few years too late to make it a commercially viable product before the investors’ money dries out.
Sandy Munro, CEO of Munro & Associates said:
“OK, let’s start off with the fun part. This is a fun trike, no question about it! It is definitely not your grandpa’s electric three wheeler… unless I am your grandpa. Munro is very excited to be part of this new adventure, this new way of traveling. We can hardly wait to get started. I look forward to doing everything I can to make this vehicle as profitable as possible. Have a great day, and go buy one!”