Q1 2021 Arcimoto Inc Earnings Call
We introduced.
Vehicle, we called the cameo last summer we use this for videography for ourselves and this also provides the foundation for our flatbed utility vehicle.
And then finally, we've introduced the roadster, which is our peer on road fund machine that we are planning to deliver the very first one.
By the end of this quarter.
So the end game for you can kind of think of platform one as really being the products that we've outlined so far as being our hour.
Shots at very low <unk>.
Multiple shots on goal for the overall market, but where we see this going and this has been true since <unk> inception is what we call personal mass transit, which is where where you combine on incredibly efficient rightsize footprint vehicle with emergence of autonomous vehicle technology.
In order to provide the mass transit system of the future.
<unk>.
That's sort of the big Aha for Arca motto is that one is that the rideshare market has the potential to increase exponentially as the cost per mile for the consumer goes down and the biggest cost per mile is actually the person driving you across town in an uber or lyft or.
Taxi.
So what we see is the opportunity to leverage existing autonomous technologies existing remote control technologies in order to bring vehicles to you that you then drive because one of the one other really fun things about the arc motive is actually driving it yourself and so.
The goal with.
<unk> platform number one in the end game is to get to.
Shared vehicle system.
And it is if you think about those images.
Lots to parks. It is the vehicle platform size that lets us erase.
Road Lane miles and narrow or lanes and bring more of our roads into more productive use and is ultimately the shared vehicle.
Architecture that we.
We are sharing a fleet a very efficient vehicles.
That that allows us to.
Get rid of the vast majority of our parking space for.
For more productive uses.
And we think that with the combination of the mass production, our kimono with available technologies that we can achieve we're aiming for a target of $1 per mile at scale.
I wanted to take just a second to compare archon mode. Because we are now at a moment, where lots of different ventures going after the EV space and want to make sure that we frame ourselves in that emergent market.
And to say a couple of things one is that efficiency is incredibly important to us capital efficiency is incredibly important to us our kimono is an actual production venture at this point.
We went public in 2017 to build out our factory and we are now producing at low volume as we look to much higher scale.
Efficiency of operations is also incredibly important to us so as we look down the road, we want to have the very most efficient vehicles for personal mobility in the market in the world.
We had in quarter, one was by far our kimonos best quarter.
13, plus year history.
Have ended and ended Q1 in the strongest position of our balance sheet. We had the highest number of deliveries even given the fact that we are still amidst a global pandemic with all of its associated challenges.
In supply chain and production shutdowns and all the rest.
And we had our certainly our strongest revenue quarter as we look forward.
At the reporting of the 10-K about six weeks ago on.
Late out our goals for 2021, so I'm just going to.
Every quarter.
Put up a scorecard.
To keep folks in tune with where we are according to our own goals.
We have.
<unk>.
<unk> laid out the goals of articulating our full platform one family we're almost there.
Plan to introduce our first platform to product and I'm going to talk a little bit more about platform too right. After we introduce our chief Tilting officer Bob mile.
We plan to pilot shared usage models of the <unk> platform and all of those will feed into our longer term goals of.
The true sort of Grail.
Personalized mass transit that we aim for in the next over the next several years.
We plan to open additional sales and service areas, we're presently selling vehicles to customers only in four states and we plan to open more service areas before the end of this year.
Our.
Articulated a goal of teaming with the U S D.
Apartment of energy in the advanced technology vehicle manufacturing loan program, we have now submitted that application.
And it is.
The ADM application moves through a series of gates the first gate obviously.
Is getting it to them the second is.
The department of Energy's determination that it is substantially complete.
At day should should they decide to commit funding there would be a conditional commitment and then at the end would be the actual disbursement of funds. So this first submission actually represents years of dialogue with the department of energy and a lot of back in force over the course of the last.
Six months in order to tune on.
Our initial submission now we expect that.
That will.
That our plan that we've articulated there will continue to evolve as we solidify all of our plans for scale production and I'll talk about that a little bit of detail in a minute.
We plan to expand our campus and we have actually closed on the purchase of a new production facility.
A lot of work that remains in order to get that facility up and running as a mass production facility and then we have articulated a goal of delivering 500 customer vehicles. This year, we delivered 60 so.
Good step on the way there, but we're going to need to step up our pace as we get towards the end of the year and then.
Probably the most important thing as we look to scale from a market development standpoint, we believe is getting people in the arc of motor vehicles.
It is an experience that solve itself.
And so now that we are.
We essentially put our we did a massive pivot in terms of our go to market approach when the pandemic came upon us a year and change ago.
We pushed our whole notion of a rental model.
Into the future, we stopped doing marketing tours.
And now that we are it's looking like we're coming out of the pandemic.
We are going full tilt back in the direction of what we see is really the optimal way of driving demand creation for the arc of motor vehicle platforms.
So scale production update new facility purchased application to the AGM submitted awaiting a substantially complete designation we will be doing.
We're planning for a small amount of production work happening out of this facility in 2021, primarily the.
On the.
Turning up our automated vacuum form plastics, but the.
The bulk of what will come out of this facility will not appear until late 2022 is our is our target for Sop that is an aggressive target.
We believe we can do it the Monroe team that we're working with believes we can do it.
But it is it is still certainly an aggressive target and we have been.
Want to be very clear about that with folks, particularly as we outlined it is a very aggressive target when we.
<unk> stated it.
And then again this is what we see as our prototype for scale replication for global expansion.
Both the product family that we're building.
And as well as the <unk>.
The way in which we are building it.
Those are what we're aiming to replicate in in the coming years as we go to higher scale on a global level.
And with that.
A great segue to introduce Don <unk>, who is our new Chief International business Officer.
If you on mind, turning your camera on net stop this share for a second and just let you.
Introduce yourself to folks.
And maybe a bit about why you.
While you came on board our kimono.
Sure. Thank you Mark.
I hope everyone can hear me good evening to everyone.
Really thrilled to be here.
So as Marc introduced me on syndrome, I joined the company just a few weeks ago, that's on macro factor and I came here from a company called <unk>.
In <unk>.
Conglomerate on Indian $20 billion on a conglomerate we're leaders in farm tractors on automotive.
It services.
And so I am excited to be here I'd be honest with you I think when I was when I think on the many reasons I came here I think our kimono is on the cost of redefining community.
So if you kind of go back to history, the fifties really belong to the sports on the muscle cars. The sixties was all about pony cars that growth started by the Mustang. The seventies was on about the.
The fuel efficient the smaller vehicles that was introduced by the Japanese.
Sure.
The <unk> was the minivans and the nineties and even the early two thousands was the PTA for Wynn America and that pretty much the whole world wasn't loved that Suvs and.
Last decade, we were introduced to electric cars. So what does this decade going to bring us I can I believe that it is going to be personal mobility micro mobility first and last mile delivery.
And there is no other company in my belief that no. Other company that is better positioned to take advantage of that then Archie model and that is what.
He has brought me here on truly excited to be here. Thank you mark thank.
Thank you Bill.
Let's go back here.
And then.
The other person I want to introduce before we go into that.
Finishing the presentation on the panel discussion is bought mile at Bob is our is the founder of tilting Motor works and now our Chief Tilting officer.
And we've got a little video clip to explain a little bit about Bob.
My name is Bob mile founder of tilting motor words, or we build these two wheel tilting front and accessories for motorcycles. It gives you better handling better performance additional wheel upfront can you better braking and other wheel upfront also improves your traction while growing around pharmacy.
Trying to figure out a way to make a motorcycle will go around the corners faster and safer built my original prototype out of Lego from that idea I just started building on original prototypes, we have right over here.
To test out the concepts and the.
Darn thing Ashley work.
Decided to build prototype number two which is over here a little bit more horsepower little quicker a lot more fun.
First time I ever heard Archie Moto I was doing a investor presentation. There was this kind of marched from here who is presenting the company wanting to build a really cool three wheeled vehicle.
I built three wheeled vehicles I got to meet that guidance.
He allowed me to take one of us.
<unk> out over road and I just thought it was great. How about we can build a really cool electric chopine three wheeled vehicle.
Martin got excited about it and it was kind of like Bob we really need to join up and together we thought.
<unk> of vehicles could really be put together by joining the forces and will finally give chuffing motor works for resources to really grow from being what we can really be taken idea from startup prototypes to actual production from mark and I cannot really that way.
He is really a great day to work on really happy to be part of the <unk> family.
Well, thanks for the kind words, Bob glad to have you on the team.
It'd be earmarked.
So so and so.
At that point and feel free to stay on for just a second Bob is really leading the charge not just on the existing tilting motor works products, which we have pulled.
Fold into our kimono, but something that I think.
I mean speaking for myself.
Probably one of the products on most excited about anything I've ever worked on in my life.
And it is it really blends I think everything that both of us and some of the other smartest people on that.
On the vehicle on electric vehicle design world that I've ever met.
Are all collaborating on.
We're not quite ready to take the wraps up yet.
In fact, we're still we're still.
Champion a way on on prototype number one.
But our target is to make something Thats thats.
Yet again, another significant order of magnitude beyond where we are with efficiency of the vehicles that we have today.
So where the fun utility vehicle.
<unk> entered market at 173, seven miles per gallon equivalent or target for mass production is 230 miles per gallon equivalent for free.
For that platform one products.
Think we can get close to 1000 miles per gallon equivalent with our first entry into platform too.
And again this is for solving.
The same types of everyday trips that we take.
But doing so in a in a way that the world has not seen yet.
So more on that soon.
And then again I've got one more video clip to play before we jump into the Q&A, but we've got.
The road team has vaccinated, we just completed our first.
Couple of week, California Tour, we plan to have road tours going basically continuously throughout.
Throughout the summer on the Eastern West Coast, and then opening up destination rentals as expeditiously as we can in order to get people experiencing the vehicles and so I'm just going to give you a taste for some of the feedback that we've collected in the last several weeks.
I think I've heard the words fund an awesome more than any person.
What do you think.
Net.
Sure.
The name <unk> is exactly what they say.
It's fun, it's Scott utility and it's a day.
But it's one like no other vehicle I've seen before you go on.
Waving at me and smiling you can just see people.
So I think I've heard the words fund an awesome.
It's Scott utility and it's a vehicle.
One like no other vehicle I've seen before people were waving at me and smiling you can just see people are happy right.
It's not just because it's cool looking but this is actually on electric vehicles on sustainable technology. That's most efficient range. The battery is 170 miles per gallon or something thats at the state that's even more on that top line.
Got to get one of these so when I go down the storage.
On the jump on one front.
I'm actually a big productivity.
Good day.
What do you think.
Net.
<unk> really heard right nothing like rising and silencing.
What we need to do really just keeps giving.
On the hockey mode.
One of those products that get to force segment of people on that it really considered putting on electric.
To do so.
<unk> products from Nevada.
Usually.
I wish I could give this opportunity to everyone because I can tell you in words, how much volume was.
Based on him right on yet, but until you actually sit in it.
Around your writing comprehend just how amazing experiences. So I just I really hope it does.
But as many button.
And as maintenance on an experience that authorized.
100% margin.
This was the most appropriately named vehicle you can imagine.
Yes.
To drive and for everyday use it's an awesome way to get around.
Wow that was a lot of fun.
I'm a motorcycle rider I write on scooters and so this is a totally different field on anything I've ever experienced in Florida.
Hey, guys day at this time it is.
Is that helpful.
It really does live up to everything that Mark and the on X. We said it was I couldnt be happier handles like a dream.
So much fun and honestly one of the best things about it is like even going 15 miles an hour and a parking on its still risky.
Obviously, you don't have to go crazy speeds, because like the low.
Ball out there so I won't go through them on.
Confident that this is a lot of fun I think we have heard that word more than any other company on the planet.
Thank you.
[music].
So.
We've got a lot of work ahead.
We are dead.
Definitely still in the throes of early vehicle production challenges complicated by a pandemic.
Or are working.
Diligently to both increase our production of our out of our present facility as well as bring new much higher scale facility online.
And we are developing some of the very coolest products.
Certainly that I've ever worked on in my career, so very excited about the road ahead big challenges.
Certainly price.
<unk> global need.
But I believe that we have.
<unk> assembled the team that is necessary.
To really take our kimono too.
So the true mass production scale, where we're going to start to make a real impact along the mission that we are all committed to so with that would encourage folks to dive into the two day.
The zoom Q&A get your questions in.
Before we jump into day, the Q&A and it's looking like.
Fritz our U.
I'm not seeing questions in the Q&A interface here.
Yes that was going on I was going to grab beyond that I don't see the Q&A option, where it normally is on zoom. So if you don't see it either then it's probably not enabled or.
Or since we upgraded there has been some changes to that I have been monitoring Chad.
Alright, why don't we just we'll call an audible here and <unk>.
Folks who have questions. Please.
Go ahead and queue those up in the chat we will get to them. After after Frits has gone through the same questions.
Alright, well be ready.
Alright, let's go ahead and stop the share if you guys want to come on board and again, so we've got.
I'm joined here by Doug <unk>, our Chief Financial Officer, who was just recognized by the Portland business Journal as the CFO of the year from Oregon very nicely done Doug.
Yes, he set a policy our chief strategy Officer, Erich Fritz our Chief Marketing Officer, Gary Becker, Chief Operating Officer, Philip sooner Omar Chief International Business Officer, and Bob mile.
The true last mile solution, our Chief <unk> Officer.
Yeah.
Fritz.
Fire away.
Alrighty from sales.
You'll hear from <unk>.
When will we learn who are commodity has partnered with where their autonomy demonstration and plans for later this year.
I would say.
You will learn them, when we announced them which is.
It is my goal to have.
Something meaningful on the road.
Within the next couple of quarters.
So.
Stay tuned on that.
We have the good fortune to be working with some true legends in the field.
And on <unk>.
Very excited about that program so well.
We will have more on that soon.
As our kimono, considering a casting machine for their second factory and if so how beneficial a dispute.
This question has come up a lot and I think it really comes back to ups.
Okay.
Here we go.
<unk>.
It comes back to the way that a lot of folks have seen how Tesla is doing.
They've done some awesome stuff with their Mega casting machine, we're looking at that approach for pieces of the arc of motor vehicle the.
Benefit I think that we have it's just that it's a much smaller much more efficient vehicle.
To build and so it doesn't rely on.
Sort of.
Any any really substantially new casting technology in order to pull off.
Using castings for the Ark motto chassis.
So.
That is one of.
The tools in the tool belt of the Monroe team and I think.
Certainly not be surprised to see.
Much higher proportion of cash parts in.
In our.
Mass production version.
Sure.
Do you see supply chain issues, becoming less of a problem going forward and if so could <unk> achieved its goal of delivering 500 Suvs this year.
I think this year is going to be tough for everyone. In this field I just got a.
I would say.
Forwarded.
On article from Bloomberg today that said the world economy is suddenly running low on everything.
And I think it is a natural.
Byproduct of the pandemic.
One of the knock on effects of having.
Global interruptions of trade of production on all sorts of things so.
To us the most important aspects are.
Or really the push to the mass production version.
And building the sales pipeline for the mass production version.
Yes.
Headache.
Even just this last week had a close call on one of our one of the many critical components of the vehicle and actually every single part of the vehicle is critical when you think about it you are missing one part you don't ship per vehicle.
We were able to work out with our supplier how to get through that particular gauntlet, but I see this as being an effect, particularly with recent news that's going to be happening.
Yes.
Probably throughout the end of the year.
And that is again our goal is really building in mass production.
And getting.
Building the market for mass production secondary goal is.
Really everything else so I.
Im not going to get optimal based on recent news in the papers I am not going to to state anything over optimistic about.
Our production targets for this year.
Jim CES when will our kimono offer owners a portal similar to Tesla.
Data from their SUV allowed them to schedule service and track customer referrals, great question actually we've got a whole.
Our whole program that we're picking up.
The pump life.
Which is going to be.
Both a portal.
Portal for customers to keep better track of their vehicles be able to share vehicles, and then share their experience of the arc of Moto.
Gamify.
The spreading the word about the company and its products.
Yes.
We have not announced our launch date for that program, but thats on the docket for this year.
When will the SUV get high speed charging capability still owners can do road trips blood existing owners to be able to upgrade their SUV just capability.
We are we are looking at an option for upgrades for high speed charging and there are a couple of there are a couple of challenges there one is the <unk>.
Not all of the highest fee charges out there actually work at the at the pack voltage of Av.
The.
On the fun utility vehicle. So we will have we're planning on a succession of higher capacity options.
Weather.
Whether that ultimately leads to the sort of the full DC fast charge, 80% and 20 minutes.
I think that's still certainly a ways off but you could easily imagine.
Lunchtime charge up that gets you.
<unk> miles down the road and of course.
As time goes on and as the energy density increases, we expect to offer higher range battery pack options as well.
Can you give an update on the development on the service network.
Terry do you want to hit that one.
We are at with service I know that we've made significant improvements in terms of our.
Time.
Service response.
But I'd love for you to give a little more color on this yes, yes. This is.
This was a project that has taken a lot of our our focus here the last few weeks, especially <unk>.
Revamped our software to be able to react faster stay in sync better with.
All of the communications that needs to take place.
We have added.
Quite a number of people to the service organization and we've come up with a plan that.
<unk> will enable us to stay one step ahead.
Branching out and opening new territories as we sell into new territory. So we're on.
We know it's a big challenge, we know we've got with.
We've had some recalls and those kind of things to get our arms around and we're.
Improving the systems.
Quite a bit here here just recently so.
That's where we're at thanks Mark.
And expect.
The expansion of our service network sort of goes hand in hand with opening new market areas.
As I mentioned earlier, we have <unk>.
Open any new market areas in the last six weeks since we last reported.
But that will be coming soon.
Less than 5% of the ATV and loan applicants are successful successful obtaining financing what is oracle mode of doing to overcome such long odds well I.
I think one of the.
One other key things to point out as we've been talking to the department of energy now for.
Five years waiting for the right time to go after that program.
And I think timing is a big piece of it so.
There, we've seen a number of different companies.
Go after ATM funding prior to having any production operations or any product in market.
And that is that makes it a much smarter here.
Hill to climb in terms of.
Letting the letting them get really get their arms around that.
The reality of the.
What a particular production program is going to look like Arca motto has now been in production.
For a year on a half we are going through the whaling in the national accused of being an early production program, we're getting tons of customer feedback.
And we're building.
Beginning of building really the data pipeline that shows the true magnitude of the opportunity and we think all of those are going to be significant marks in our favor in terms of going after the Doa program I think.
Other aspects of the timing piece that I think is important.
Is just that we have on administration that has made really bold goals regarding carbon reduction.
As well as driving employment in domestic next generation vehicle manufacturer.
That combined with the fact that arent motto is building.
Some of the very most efficient vehicles on the road by a good margin or daily driving it goes all count in our favor in terms of getting out of that.
95%.
Okay, we have a lot of questions on the deal with Monroe, So I'm going to kind of lump season together my apologies to anyone that had a specific question that is not addressed by this but kind of the general.
The general.
Question feeling is.
What have we learned thus far from Monroe, what has been implemented what is the plan for implementing the rest what is the future look like.
The relationship with Monroe.
Once we're past this initial.
And a design phase.
Cetera.
So that's a lot of questions.
And Jesse feel free to chime in here as well if you like.
In Q1, we kicked off.
So when we started with Monroe with a very small project last year, which was sort of.
Help us.
Help us with guidance in terms of what are what are the cost reduction.
<unk>.
Points that we should be able to achieve at various different unit volumes that informed.
Our decision to shoot for 50000 units per year production capability.
We then did a sort of a three pronged projects do have a deep look at our building materials to do analysis work on the corners of the vehicle on how it interacts with the road.
Primarily for optimization of weight reduction.
And then.
Really more of a of a structure analysis.
The front end that holds all the pieces together.
And then at the beginning of this year was when we really dove into an <unk>.
You can see it in our filing I believe is the note about.
Really engaging them on a much longer term basis.
For the development of the mass production version into next year.
And I would say.
A ton of different pieces I could talk about in terms of working with the Monroe team.
<unk>.
On the.
It's both.
They have had.
Additional engineering capabilities. They brought additional planning capabilities additional price management capabilities, all with the goal of tracking to a very low cost ultra efficient vehicle for the masses.
And I would say we are.
We have a.
A big day actually tomorrow, when we start.
Really doing.
Fairly across the board down selection process.
On.
On that mass production design and plan.
And so I expect that by next earnings call I'll have some real meat to deliver in terms of where we are as well as some of the very cool technology components that archon motto is working on.
Also in the further efficiency improvement and cost reduction.
So.
Again, we're targeting aggressively targeting a startup production out of that new facility in Q4 of next year. So we have.
A ways to go before we get there.
But we'll have lots of juicy tidbits to share along the way.
With platform to being an extensive low range vehicle targeted at the India market. What features will be added to platform one to help us stay competitive in the higher end market.
Well.
I should say platform to is not just designed for the India market is really it is we intend platform to be a global product.
Sure.
Although dilip got his first presentation on that.
On our first platform two products.
Mike.
Weak.
And I'd be curious what is your perspective on platform two in the India market.
Yes so.
Obviously I mean.
From.
On a perspective, it has a tremendous amount of potential.
So.
That is something that we have to explore.
It is India is a very competitive market so from and it is from a price perspective. It is extremely competitive so that is something that we have to keep in mind.
And I would say.
Anish answering the original question.
The elements of what goes into platform one.
One platform one already delivers.
Road experience like nothing else out on the road.
And we hear this from our customers we hear this from people who are trying it for the first time.
We expect incremental improvements across the board to the experience of the vehicle and then over the long term.
We see we see cost reduction so again getting getting the Ark model platform one family to the point, where somebody can can can get one for a four digit pricing including incentives.
Really important.
Because that is we have.
Really the fundamental belief that we wont achieve sustainable transportation until people can afford the solutions.
The bulk of the vehicle market is not at that $35000 new car prices in the.
10, 10-K than the 15 K used car price range.
So that's really.
Affordability is going to be a key piece of platform one for the duration.
And then I think we will continue to build.
Upon delivering a truly world class REIT experience on this unique new vehicle platform architecture.
What's up with Dominos.
I have nothing.
Make delicious pizza.
Fair enough.
Net.
Where do we stand on getting doors for units already sold that includes the cost of doors as they do go idle.
Terry Becker has a great answer for this question.
After many many months quarters.
<unk>.
<unk> been developing these doors and we're coming down.
The final stretch from the final tooling and the final.
On Assembly line that will build these stores, we've actually engaged with.
Some of the evergreen.
Customers.
That have doors on new builds and we're making sure that we get the colors in the paint jobs and those things figured out as far as doors for future vehicles. This.
This tooling and OMB Assembly line and vetting of these stores should be complete and if you choose the doors on your configured SUV in Q3, it should come with doors on it so.
So that's that's where we're at after many months.
Turns out net doors are just about as complexes.
On the rest of the vehicle.
Testing that type of thing.
Thank you Terry.
Doors.
Along that same line of questioning are there plans to bring options that accommodate dogs.
Such as the CCAR and or children.
To market.
Would not put your children and sidecar.
So no.
For people who've been following me on Twitter, you may or may not have seen.
Posted on some of the prototype.
Side cars that we've put together, we're doing one more iteration of that.
In order to.
Bringing some customer feedback that we got.
And I am expecting that that will be an option hopefully before the end of this year.
And we've got a whole set of accessories that are in the queue.
Net.
That we are working feverishly to get fully set up through the entire sales and production system everything from bags golf club carrier to additional storage options and so those will be.
Part of the vehicle product lineup.
We're certainly thinking 2021.
Lots of Optionality.
All right and we'll go one more from say four.
Switchover here.
The vehicle looks fun and functional how is the interest from National Park City rise in other rental fleets does supply exceeds demand or does demand exceeds supply what's slowing the production ramp.
And what steps are being taken to address it.
The overarching challenge that we have had really relates to the supply chain and that's that has been.
Twin problem, one has been with some we've had.
Some component.
Quality challenges.
We have caught in our in our factory.
That we have in some cases had to stop production Board. We've also received limb.
Limitations from certain suppliers, just on what sort of unit volume out what they can produce in calendar year 2021.
So that's.
That's one of the reasons why we were really trying to be very judicious about the vehicles that we build this year to make sure that they really have maximum.
Visibility in utility within the market.
To prime the pump for scale.
How back to ATV interest I guess, how long does it take to get approval for the <unk> and some of these weighted many years and went out of business for getting approval do you have a plan b and <unk>.
Case, it doesn't work out.
Sure well so so the AGM.
Said this.
Sure.
I think many quarterly calls as it is simply our preferred funding vehicle for scale production.
And the effort to go through all of the planning process for the use of proceeds and planning out for scale.
As as utility wherever the funding comes from the advantage on the ATM as <unk>.
Non dilutive treasury rate loan program. So we think that the cost of that capital is is the best that we will be able to achieve in the market.
In terms of how long it takes.
We have heard.
Good signals from the Doe.
Recently.
Got it.
On the way from the director is saying.
Number one we're expecting that to be about six weeks that's the.
Determination of substantial completeness than there is a due diligence process.
But my expectation based on talking to them is that sort of nearest timing would be six months.
<unk> more likely.
Likely would be somewhere on the on the nine months to a year timeframe.
But Mike I am getting the sense.
Based on on what we're hearing from them that they are.
Feeling the need to move quickly.
What is the sizing and timing of the roads to ramp up following the first delivery in Q2 so.
Yes, so free I mean really first delivery will be first delivery.
Once again signed up for vehicle numbers zero.
Net.
The pushing the team is get the.
<unk> zero in my driveway by <unk>.
<unk> 30.
But beyond that we're still going to have a bit of work to do to get all of the sales processing systems in place and get everybody through that pipeline.
So I would expect a slow ramp on the roadster and again, that's going to be the roadster is.
Okay.
<unk> and deliberate or is that these are all sort of competing for the same production slots.
On that we have throughout the end of this year, although the one of the advantages of the roaster is that obviously as it.
There are certain components that are part of the other vehicles that are not part of it. So if there is a supply chain limitation.
Seatbelts for example, then the roadster can be built without that limitation.
But I think it is too early for me to predict at this point on what the sort of specific ramp up looks like for that product other than to say I expect a slow ramp.
For the roadster in.
In 2021.
I think I saw on another question from Mike.
I shall ask me, saying basically our deliberate or is going into rental fleets. At this point I believe deliveries will go into rental fleets, because we want to make sure that we are covering our basis in terms of shared vehicle usage models that involve last mile delivery.
We did that kind of our toe in the water.
With higher car got some fantastic feedback from their drivers.
And I think that Thats a program.
Area, where that where that vehicle truly shines. So we want to make sure that people, who don't people don't necessarily have to own a deliberate or in order to make money with it.
And likewise roadsters in certain areas will likely see utilization in our rental fleets as well.
Mike also on a question related to supply chain and production outlook document on counting on any supply chain issues in Q1 and has there been any improvement or deterioration in Q2, thus far and what is the production outlook for Q2.
Okay.
Hi.
Terry you want to take a swing at this I mean, I think Q2 has certainly we have certainly seen supply chain challenges in Q2, both in terms of.
Part supply.
Availability and we have worked through some of those.
And then we also have had some pieces that we've had to go back and take a deeper look at.
What that means in terms of our exact unit output for Q2.
I think it's still TBD, but Terry do you want to add any more color to that I'd be happy to happy to here.
Yes every.
Every factory out there, including the ones that supply parts to OEM factories are going through the same challenges.
That we all are.
On this last year or two.
And the other.
The other thing beyond the pandemic is just the fact that now everybody is now that everybody is ramping back up the <unk>.
Supply chains are being hit with part shortages so.
If it's not their manpower or their uptime that theyre finding.
Now its pricing and its the cost of making our parts. So those are all challenges that are overcome flow in different ways and we're hitting it from <unk>.
Many different angles to to increase our capability to keep up with that but.
Yes, it's been a challenge.
Yes.
The one bit I would add to this though is that in <unk>.
Just in framing it is one of the real advantages our tomato has.
Is that we entered the pandemic with a substantial amount of inventory.
And we were able to build and are able to build.
Hundreds of hundreds of vehicles.
That we can get out into the market and so when you look at EV companies, particularly that are now just trying to get into production.
We have a substantial advantage in that we actually have production vehicles and that are that are main timing window that we're shooting for is basically end of next year in terms of really hitting turning the ramp online.
And cranking vehicles out the door at mass production volumes so.
If you are focused on the immediate term.
I would encourage you to take the long view.
I see it.
Yes.
Hey.
All challenges on a very overcome a book.
We are well on our way.
Yes.
Let's see a couple of questions related to competition and how we see ourselves positioned versus specifically.
Specifically electromechanical.
Tara.
Well.
One I would say that.
As you look out on the market right now the fact that you've got the can am spyder the player slingshot electromechanical solo coming soon up Terra coming soon our kimono on the road this form of the reverse trike <unk>.
<unk> and from one well on back done right.
Clearly.
<unk> market awareness and true market penetration and so I think that is a very good thing for all the players going after this particular space.
In terms of.
Which are amongst these is a competitor.
Yes.
I love the Aptera I think that there we share their same.
Really.
Deep commitment to vehicle efficiency.
But they are building a very different vehicle from the Ark model.
We're building something that's meant to park three in our space is is.
It really designed to be on a droid.
<unk> vehicle for last mile delivery for vacation rentals for just sort of everyday trips.
And they are building.
Really a car size vehicle. That's designed to go 1000 miles on a charge or something that you would never charged because it's got solar panels all over it.
And I think that each of those has.
A really strong potential value proposition in the marketplace I think the solar might be a little bit closer in terms to have an adjacent competitive product.
But again.
They are aimed for a single seat.
Automotive like experience I think the Orca Moto because it is a a two seat vehicle for the consumer version and because the our delivery version.
Quite a lot more storage space I think I see us doing well in those markets I see a real opportunity for share vehicle services for solo for example, so.
But ultimately the competition that IC is is an old set of ideas about transportation.
We really welcome all of the other players.
We're trying to make a real difference towards fighting climate change.
There is also a few questions around Bonnie just research and the.
Lawsuit that it may have generated.
So I spoke at some length.
On the previous earnings call.
About the allegations in the Benito report I would refer you back to our.
Previous earnings Webinar from end of March.
Yes.
<unk> is we think it's chock full of false and misrepresentations and then obviously.
Doug do you want to you want to read what we threw in the.
The K regarding this.
Sure.
Q.
You can find it.
Yeah.
On April 19, 2021 litigation style, David Barnett vs Accomando, Inc, Mark Frohnmayer and diverse camp hauling.
Was filed in the United States District Court for the Eastern District of New York, The action English and none of the defendants as yet concerns purports to be a class action on behalf of all of those who purchased our common stock between February 14th 2018 and March 22021.
And is based on the research report dated March 23, 2021 produced a fiber neediest research LLC.
<unk> salary.
The common stock.
On our common stock.
With the stated intention of driving down the market price of our common stock.
Although the lawsuit is reportedly a class action no motion to certify on class has been file at this time.
We believe we have substantial defenses to the claims asserted in this lawsuit and intend to vigorously defend this action.
Thank you Doug.
Yes, I would just say.
If you are tracking.
<unk>.
If youre looking at the short interest on the company if youre looking at just the slew of.
<unk>.
Short reports that starting to show up.
Once there was a substantial amount of short interest on the company.
And then the absolute spam.
From law firms.
About about these class action claims.
I think.
To me it.
Smells of reverse pump and dump.
We look forward to vigor.
Vigorously defending ourselves in this case, but again our main focus is on the execution of the business.
And the push on scale.
Anything to share about which states will be coming next or opening nationwide for delivery of vehicles and then a follow up question from another individual how many states do you plan to open up this year.
So Mike.
I would say.
Yeah.
We will announce them when they are announced but the.
You can look at look at states immediately adjacent to ones that are open those are probably good candidates initially.
And then my goal for the end of the year is to have a much higher level of coverage for our current preorder book.
If we can get to the point, where we've got.
It opened facilities or on either opened facilities somewhere approaching 70% of our preorders, which which is really only.
A handful of additional states.
That would be awesome.
And again our goal for nationwide is by the time that we are in mass production that we are also able to deliver at least in the lower 48.
And of course, we see Hawaii is a fantastic opportunity as well.
I haven't forgotten about you Alaska will be there soon.
Alright Fritz list you, let's take a couple more and then.
I think we're a little over time, but we can pick up more on than rapid.
Great can you run us through some of the challenges facing in between now and the targeted end of 2022 goal of completing the ramp.
Wow.
They are.
There are a substantial number of challenges.
One.
And any vehicle production program.
Involves.
Just a massive amount of coordination, but I would say probably the biggest challenge.
Or the.
On the.
It is going to lead into some of the work that we're doing internally in terms of organizing the company, but I would say that based on our experience to date that ICU, making sure we have a really robust.
Supply chain as we go into scale production is going to be one of our very biggest challenges.
We are also pushing.
Some significant new new technologies for the drivetrain and getting those really dialed in to the point, where they are ready in time for deployment is going to be a big hill to climb.
<unk>.
And then.
Cranking a vehicle out the door every eight minutes.
Is no small feat in and of itself. So planning out the assembly line, making sure that that works like clockwork.
But I would say Jesse Dilip Terry if you guys have anything to add.
All yours.
It's a challenge, but it feels good right now.
We have a great team.
And I understand that.
Kind of do to get there.
And and we feel like we're making good steps so on.
Doing good.
I will just throw out there too that delek with his international connections and it is.
Background with.
With high volume large companies is going to be very very helpful and.
Working with Delek and Monroe team and the focus that we have with designing.
On the vehicle.
With that in mind from day, one we will will go very well.
Feeling feeling good like Jesse.
And for our final question. This is a good follow up on <unk>.
So specifically now that we have developed where internationally will be our first focus after North America.
South America Asia Europe other.
Okay. So we are assuming on the cross sell building the strategy here.
So.
And as you know I mean, obviously go internationally just yet.
<unk> more complex because of the regulatory issues that we have to address.
But having said that you also got to look at it in terms of many cities in Europe have already embraced the European Green deal, so which means that many of them.
On a kind of a closing there.
<unk> internal combustion engine vehicles, and even sometimes electric vehicles.
Downtown areas. So what is that that gives us a tremendous opportunity there to player.
To be the personal mobility.
Provider.
That is definitely the case then you have also have places like Singapore, Hong Kong City States that kind of.
Really lends itself to something like what we got and here on governments also promoting.
Electric vehicles, not just electric vehicles, they want promoting personal mobility vehicles. So and then you have a place like Mexico City, where the mayor of the city is anxious to bring in electric vehicles or personal mobility as well as for cash.
Other kinds of transportation and so do we have a lot on low hanging fruits, absolutely, but it's also going to depend on the regulatory issues that we have to income.
So what <unk> is doing right now is helping to organize the process for identifying what are our top priorities what are the low hanging fruit, where the regulatory obstacles the lowest what are the longer term.
Regulatory components that we should be aware of both in terms of <unk>.
Things like market entry as well as actual vehicle characteristics.
In the in the out years to make sure that we are planning ahead for where the need is greatest in the opportunity it's great.
Alright.
Well. Thank you all for tuning in again, if we apologies if we didn't get to your question you can always email investor at <unk> Dot Com, if you have not already signed up.
On our.
Investor E Mail list you can get there from our commodity dot com slash IR.
This webinar will be posted I think tonight for anybody who missed it.
And please stay tuned we'd love to get you on the driver's seat.
Yep.