Q3 2021 Arcimoto Inc Earnings Call
And and roll the tape.
Yeah.
Okay.
Yes.
Okay.
Critics are mark Frohnmayer, CEO and founder of Arc Memorial Park Moto is in Oregon C Corp. Founded in 2007 with the mission to build products that catalyze the shift to a sustainable transportation system.
To start this presentation with an overview video and then dive into archon minerals was big overarching goals for the road ahead, and you can sign up for Investor updates and find supplementary information, including our earnings press releases financial filings presentation materials and webinar replace on our Investor Relations page at <unk> Dot Com slash.
I R T.
To start I want to call your attention to our safe Harbor disclaimer regarding forward looking statements. This note identifies risk factors that may cause our actual results to differ materially from the content of our forward looking statements for the reasons that we cite in our Form 10-Q, and other SEC filings now onto the goods at arc and Laura we built light.
<unk> electric pull through efficient rides that are outrageously fun to drive for a reason our vision and the city that doesn't suck anymore. Today's city is dominated by the car we pave over nearly half our urban land for these giant multi ton extractive machines that we mostly drive alone or with just one other person.
And Leif parked rusting for 95% of their life, that's not we believe that by right sizing electrifying and better utilizing our right. We can reclaim our space clean our air and make our cities much more livable for everyone. We built a new human scale vehicle platform and our family of products dialed.
For a wide range of everyday trips the fun utility vehicle for daily driving rentals, and rideshare, the deliberate or last mile delivery of essential food and goods. The rapid responder for emergency services and security the flatbed for general fleet utility.
And the roadster.
One machine that drives like nothing else on the road every Arca Moto is pure electric range for everyday driving have Rockstar parking as a standard feature and accelerate from zero to fund instantly our experienced model as rental foresee with operations open and multiple destination markets and more on the way to give potential adopters the pace.
Alright, I've been driving it everywhere.
Just like a 16 year old I don't even care, where I go or why I go there I go out and I get in and I just drive around.
Awesome Awesome machine right Bill.
<unk> got plenty of power all of the following.
And it's just tough.
When they say.
And it hasn't been driven.
When we get to Horizon, and then you just get the feeling quite a solid Matt I'd also like to give a big shout out to the art Komodo team.
Workmanship and design.
The full future Arca mono vision as driverless technology to make shared rides much more convenient imagine a city, where your personal transportation is available at the touch of a button on your phone.
Okay.
Enjoy the experience of driving again and when you reach your destination.
Just hop out in New York, and Moto was available for its next driver.
We are in production now every orca Moto is built here in the App, where we transform raw material to cutting forming welding and machining and final assembly all under one roof.
To take the venture to scale, we've purchased a new much larger facility and team who is sandy Munro and associates with the goal of ticking off mass production late next year.
Finally, we acquired totally motor works developers of the trio accessories that can turn two wheeled motorcycles into amazing tilting three wheelers together, we're building a new ultra light micro mobility solutions for the rapidly growing global electric bike and scooter marketplace with our overarching focus on scale this year or we plan.
To demonstrate the full breadth of <unk> solutions for sustainable mobility and expand our market presence as we prepare for the next decade of debentures growth.
Arc <unk> is a public company, we've been powering since our inception by a community of stakeholders with whom we share our mission to catalyze sustainable transportation.
I hope you join us.
Yes.
[music].
Yeah.
The name Arca modal means literally archetype I drive or I drive the future and as the brand identity for the next generation of drivers Arca models mission directly inspires the company's values values. We believe are fundamental to its achievement, we put people first.
Our customers our team and the stakeholders, who propel us along the way we.
We are lean by design continuously improving what we build and how we build it.
Our impact on the World is always front and center.
Not having fun it'll show up in what we offer.
And we are and continue to attract 18 players who have to hustle grit and collaborative instinct to get the job done right Arca Moto is a new transportation endeavor unencumbered by the legacy of 20th century automotive business models, we generate awareness and sell online and a team with DHL for.
The direct distribution of our products to customers rather than franchise dealerships or company test drive outlets, both of which carry ongoing overhead we've focused our in market experience on rentals and eventually vehicle sharing as a service we have rental outlets opened in key west San Diego and Eugene.
As well as through go cars in San Francisco with more destinations coming soon argument. It was small light footprint platform makes it ideal for mobile service, where most customers issues can be handled on site and for long term ongoing maintenance the electric drivetrains robustness and simplicity means that most were.
There items should be serviceable by existing lightweight automotive service companies the companies Big top level goals are first to design and implement the pattern for mass production of Arca motives vehicles, such that we can rapidly produce vehicles for the global marketplace.
To deploy the intersection of future transportation technologies for shared ultra efficient vehicles with a business model that wins as.
As we demonstrate the full product portfolio of solutions for sustainable mobility, including a multitude of variance on our core platform and finally to deliver a new family of solutions for true micro mobility Akamai.
<unk> is presently producing vehicles and low volume for early customers, providing us a critical early market presence and depth of knowledge of the performance of the platform on the road.
The scale to mass production, we've acquired a new facility with more than 200000 square feet of production space under roof on more than 10 acres. We've teamed with lean design in automotive production experts to plan for volume manufacturer targeting a maximum output of 50000 units per year.
Engineering and production planning are now moving ahead full steam and construction on the new site is expected to start in Q4.
The planned output of this effort is not just a production facility.
But the complete set of plans to scale Arca mother's output here and around the world, meaning significant effort to standardize all processes and documentation to more easily replicate these 50000 unit production cores in other locales sharing a single robust global supply chain.
Since its inception <unk> vision has included the integration of driverless technologies to more conveniently share vehicles and drive up utilization and for the first time, we've demonstrated driverless technology in the real World. This summer at our showcase our Komodo and partners demonstrated a remotely controllable fun utility vehicle.
Including the foundational technology layers necessary for autonomy.
While we see merit in the long term aspiration of the perfect Robo taxis that lets you focus on Twitter instead of the road Arkham Autos Robo valet initiative is focused squarely on near term shippable intermediaries that reduce the cost of the vehicle sharing business model.
One element that separates our kimono from every other EV venture. We've seen is the true flexibility of the Orca modal platform for a wide range of everyday driving uses each of our products is largely the same sharing the same battery drivetrain chassis wheel braking system and so on which are ultimately additive.
Two our economy of scale.
For the consumer market, we produce the fun utility vehicle than the roadster with a planned commuter vehicles down the road, we offer the <unk> deliver rater and now with flexible flatbed for the fleet market and the platform has uses even in very specialized niche applications such as the cameo we've built for on road filming.
All of the work, we're doing now to demonstrate the flexibility and applicability of the platform is feeding back into the design process for mass production, ensuring that what we build continues to be ever more adaptable for a wide range of everyday uses as we look down the road. Our first platform is just the beginning we aimed to can.
<unk> lightened the footprint of mobility.
To that end last year, we began the skunkworks development of the mean lean machine targeted squarely at the rapidly growing E bike marketplace.
This vehicle will be chock full of new electric vehicle technology, we are actually reinventing the wheel this time.
We believe it will perfectly complement our go to market strategy of rentals, and rideshare and will set a new bar for efficiency utility and affordability for a wide range of transportation tasks.
We acquired tilting motor works at the beginning of this year to accelerate development of that program, but I want to take a moment to talk about what else. We got in that deal an existing product line for motorcycle riders, who don't want to fall over anymore.
Our trio accessory transforms a motorcycle into an amazing three wheel tilting machine and we see giant market potential for this product.
In the U S alone there are more than 12 million motorcycles in use and the trio is already adapted to the leading big bikes Indians gold wings, and Harleys of which 180000 were sold last year worldwide.
In summary, Arca Moto is shipping and continuing to further develop kickass ultra efficient electric three wheelers and advanced vehicle technologies alongside a world class team with whom we share our mission to rightsize mobility as we grow our market presence in preparation for volume production.
For the challenges ahead, we will continue to improve the experience for the Arkansas, our early customers and riders for vehicles. The first time user experience and sales service and communication processes. We.
We will continue to cultivate our leadership skills as our team in demands expand and this means continued emphasis on process culture and our core values.
We will maintain our focus on the health and safety of our team during an ongoing pandemic.
And the plan is not waiting around the Ipcc's code Red is our call to action.
We must continue to step up our production pace amidst the churn in order to make the contribution for which we are called.
So that's the overview as of about eight weeks ago and we.
Just yesterday this one's hot off the presses get a quick snapshot updates for you.
From a road and Fritz you can roll that now and then we'll dive right into the Q&A.
Right at the arc of Nuts quarterly reporting addition, broadcasting from somewhere in the wilds of Arizona.
Q3 to present in two words.
Massive progress.
Every front critical for the Companys growth, we've advanced the planning and build out of our mass production facility, our plans for the future of rideshare, including the first ever demonstration of a driverless Arca modal.
Further expansion of our product family with the launch of the roadster and first demonstration of the flatbed as well as the <unk> of our first true micro mobility prototype based on technology, we acquired at the beginning of the year the expansion of our open market regions with the acceptance of quarters from Nevada, Arizona, and Hawaii targeted next and.
The launch of the right of the organized.
Our ultra efficient roadshows planned to substantially expand awareness of our komodo and the unique experience of our rides nationwide and despite supply chain issues outlined in our stakeholder update at the beginning of Q4, we sold a record number of vehicles to customers from our current limited production facility.
Pushed to volume production continues to be our most important overarching objectives and in the third quarter, we made significant progress towards that goal.
Cook possession of our new ramp facility and began lending new production equipment, including our new automated plastics production cell as well as began the renovation of the facility that will become general Assembly, we plan to pause vehicle production for a portion of Q1 in order to move materials quality sub assembly and the assembly line into the new.
Facility after which we expect to achieve substantially higher unit output for the remainder of next year. We've also made substantial headway on all of the design engineering and planning efforts to move each system of the vehicle to a mass producible state.
This work in tandem with what we continue to learn about the developing next generation transportation market provides the foundation of our application to the U S Department of energy for an ATV M loan.
Final draft application for which we intend to submit before the end of the year.
A note about that H E. B M. Lung. We also did a lot of work over the course of the last year working to make changes and the authorization of the ATM program with our partners in Congress and we're very pleased to report that the the infrastructure Bill that President widen signed today contains a really important.
Vacation that we believe in tandem with the market research that we have done will really bolster our application for that program.
Modest pace of innovation continues to accelerate as we focused not just on the vehicle itself, but really key technology upgrades throughout the vehicle architecture, including the battery system, the drivetrain and the low voltage electronics and communications.
Our innovation pathway is not strictly limited to improving cost and performance, we see rightsize better utilize evs is a critical pillar in our mission to accelerate the shift to sustainable transportation.
Given that the vast majority of Reits today in the U S have only one or two people traveling a short distance with a small amount of stuff.
We think that this lightweight ultra efficient platform is really the right win for a huge range of shared mobility trips as we look ahead to much higher levels of stepped up production starting at the end of next year, we launched a variety of the organized program that were essentially beta testing today, which.
As we think a radically more efficient way of doing vehicle Roadshows typical way and we've done this for more than a decade.
Truck vehicles, thousands of miles people fly and stay at hotels, and then everybody Bogeys back home.
The rise of Arcata work is it say slow moving set of convoys of vehicles, demonstrating the unique Arca Moto ride.
Everywhere, we're aiming for every major population center in the United States, we want to cover basically the whole country over the course of next year and make sure that all of the everyone out there who is has had.
Out of curiosity about the arc of motor right experience, it's a chance to get in the driver's seat. We think this is ultimately going to be a much more efficient way of connecting with customers connecting with investors connecting with stakeholders connecting with partners.
There's just no substitute.
We're getting behind the handlebars.
So as we've been out on the right and this is actually true wherever we go.
One thing that happens constantly is that people will stop us on the street and say that looks like fun, where can I rent that.
And that's just given us a lot of time to think about.
Rental as really the default model for enjoying the Ark model, whether you're talking about kind of the niche high priced vacation destination rental that is particularly appropriate in when we're building at low volume.
Two the rental company owned rental stores that we have in Eugene and San Diego that enjoyed their first full quarter of operations in Q3, our partnerships with SOCAR tours in San Francisco to our first franchise in key west and all the way to shared mobility programs like.
What we launched with reef drive just very recently where of Arca models are available by the minute by the hour conveniently located first instance of that is in downtown Santa Monica All the way to our long term plans of the Robo valet or you hit a button on your phone.
Vehicle that you want whether it's a flatbed a deliberate or or a fun utility vehicle shows up.
You can jump in and take it where you want to go through your trip. There is no. Other vehicle platforms that we are aware of that combines.
Not a flexibility for different uses that makes a perfect grocery getter as well as the.
The ideal vehicle for experiencing the beauties of the natural world as we look forward that rental focused model is going to become we think a greater and greater part of the Arkansas story.
And then finally I'd be remiss, if I didn't talk a little bit about platform, two which is our entry into a true micro mobility.
We are building a new vehicle the world has never seen and what I think we haven't really talked about much is that at the heart of that new vehicle is what we call micro future dry which is a combined drivetrain systems for micro mobility devices, and we see <unk>.
Location not just in our in our first product for platform, two but really a whole range of micro mobility solutions.
I'd add that whole next level of efficiency.
The electric bicycle market has grown by absolute leaps and bounds.
It's enjoyed explosive growth over the last couple of years and we think we have a set of products and technologies that are going to be fantastic players in that space.
We're all looking forward to getting back from base, taking everything that we've learned on this ride.
Formulating our plans for next year, when we're going to scale it up.
And really bring the Arca modal.
Experience.
Alright.
Thank you Fritz.
And let's go ahead and bring on are the executives in the in our in our esteemed panelists.
Okay.
Okay.
Hey, Mark Good morning, it's Amit from HC Wainwright.
Good morning.
So this new platform that you just.
Highlighted the electric bicycle micro mobility.
Can you talk a little bit of both.
Yeah.
When timing and just some color on what the product is actually.
Yes, so well and you could kind of see it in our first prototype and blurred up form.
The reason for the product is that ultimately, we see <unk> position in the market as being.
Everything less than the car, we want to run from.
The daily Go-getter platform that is the SUV all the way down into that net that whole next order of magnitude of efficiency.
In terms of timing.
We're not quite ready to take the wraps off yet we think it'll be showing showing up early next year in terms of.
Actually talking in detail about the product features and so on but in broad strokes.
It starts obviously with the technology that we acquired from jumping in waterworks.
Which I, which is we think the right way to do a leaning three wheeled vehicle.
And then we've we've been building.
A set of components for micro mobility devices, and primarily our focus has been on.
The design of.
Really the combination of this is the combination of charging and battery and motor control and so on in order to improve performance and drive down cost of that.
That sort of whole combined system.
And we're not we're not really looking at it as a solution for existing pattern. So if you look at the products that market model builds we are building new platforms, we're not taking.
The electric bike market today is largely bicycles that had been made electric the electric vehicle market is in many cases cars that have been made electric.
We are focused on platforms that are.
Sort of electric from day, one and so that's letting us think a little bit outside of the box.
And.
I can I can be more I can add more big things here, but I would just suggest that you stay tuned we're looking to we're looking to unveil that.
The platform too.
Concepts.
Really right after the beginning of the year.
But this is something that to me is sort of ticks all of the boxes.
Sure Yeah.
Why would I not ride a bicycle class vehicle.
And that's for me personally obviously there are lot of reasons people do and Don but I would just add that this is a market space that is.
Undergone just massive growth.
Particularly over the last couple of years and I think that's it is that is indicative of a real shift in market sentiment and we've discovered this not just from seeing what's happening with E bike market, but when we actually went out and did.
So much more in depth market research around the fun utility vehicle. What we've noticed is in just the last couple of years.
The market idea of what of vehicles should be.
It has really has really shifted and it's shifted in the direction of sustainability shifted in the direction of micro mobility, and we think that's a real benefit to the world and also to.
Our plans going forward.
And these these.
Yes.
This new platform is it meaningful.
Or is it meant for just you know.
Yeah.
Ill.
The platform itself is going to be capable of driving a variety of different very lightweight vehicles. The first product that we're building is in the is in the class III E bike space.
So you could conceivably driving on the highway, but you'd want to be on it.
A very tall Hill.
Because those are their electric assistance cap at 28.
Understood.
Okay, and this is going back to the.
The financials and the quarterly performance et cetera, any bids on how Q4 is going for you guys.
Revenues, probably still more heavily by Amazon is just any update on sort of the businesses looking I think on the on the revenue side. If you look at Q4 Q1, we're still in the midst of our supply.
Supply chain churn and then as we talked in the video.
We're going to be spending a big chunk of Q1 actually moving our production or our main assembly line features into the ramp as.
As we look beyond so from a revenue perspective, I would expect the same thing that we've been sort of guiding for the last five five years of calls which is relatively flat and lots of chop as we start to get into end of Q1 into Q2 and beyond.
We think that we're going to see a substantial increase in number of vehicles manufactured we.
We are aiming for a lot of those to end up in rental our rental type opportunities.
<unk>.
But but yes, so stay tuned on that front I think we're not giving.
Yet.
<unk> in terms of unit production towards 2022, but I'm expecting it's going to be a big step up.
Multiples beyond what we did in 2021.
Then you get back in queue. Thanks, a lot.
We've got we've got Craig on the call Craig are you ready to.
Jamie This is Craig was our very first we've actually had two of our very first analyst for our kimono joining us on this call so Craig and Jim Mcilroy really appreciate you guys showing up.
Hey, Hey, so mark.
I get the opportunity to ride the.
Gosh I'm going to use the wrong name the roadster your rote say the first unit.
When I say in Las Vegas.
<unk>.
Just like the.
The SUV right the experience of our freedom.
Freedom and kind of flying like you do on a motorcycle.
It's a little bit more free but it still has that stability.
Someone that's maybe a little bit older with a lot of money in their pocket.
Might be a little afraid of a harley but something like that.
As a natural fit in the design is just beautiful.
How do you how do you expect.
Market visibility of growth for that right I mean, I know you've got the original article out there, but how do you plan on marketing. This one specifically does it does it go maybe to a different demographic than the than the original SUV do you expect it to.
To resonate differently.
And when do you expect to have more units maybe too.
For people to ride and drive so they can make their purchase decisions great. Great questions. So there are a couple a couple of features on that one is that yes, I think the aging motorcyclist market is much more an opportunity for the roadster, although we actually have a lot of people in that demo.
That are attracted to the fun utility vehicle.
But the right experience of it is I mean, it really I feel like it's somewhere between a magic carpet in the broomstick, It's just like.
It's like nothing else I've experienced on the road.
The the <unk>.
Probably I would say that the key touch points on that one is that in California, you don't actually even need a motorcycle endorsement to ride the roadster and a lot of states.
You can drive the fun utility vehicle.
With the normal driver's license, but because it has no upper frame the roadster will require a motorcycle endorsement in California that is not the case. So in places like that we think are destination rental is going to be a fantastic way for people to get experience with it.
The other piece is and this just goes to.
How we saw you in Vegas.
We're driving down the street.
Mark.
That thing with school lets say so.
The whole purpose of variety of the Argonauts is to get is to really bring vehicles in in the most efficient way that we can to all of our potential customers people, who have signed up and then and then ultimately once we get the market ceded we think that we're going to see a lot of that pure effect, where.
My neighbor, let me take the roadster out for a weekend and now I've got to get one of my own.
And then the other piece is that as we look into rentals as we're looking at the opportunities for rentals from renting.
Renting by the minute by the hour by the day by the week by the month and then even potentially longer. So I think that the roadster is going to be one of those items that has the potential for hey, I want to rent this for three months wall.
I'm, a snowbird im heading south for the winter I want this.
As a sort of a golf cart three point O.
For my gated community and that's another piece of that puzzle.
Cool Cool My second question is about the <unk> loan application right.
The loan has some some stipulations or at least the loan requirements have some stipulations about.
Having an enclosed.
Cockpit.
Then I guess it means you probably you probably needed things like maybe I don't know if you need air conditioning.
The airflows beautiful, but you could depending on the definition of enclosed right.
I know youre heating it's fantastic.
Some of the things like windshield wipers, and some of these other items that kind of come into play for compliance around the.
The ATM loan can you maybe sort of scope out how this is a match for things you're already planning we're already developing.
And the different phases of it alone.
Are you as far as the original application and maybe maybe moving into potentially due diligence for that loan.
All good questions.
So I touched on a little bit.
The key pieces.
<unk> actually happened yesterday with the infrastructure Bill was a change.
A change to the AGM relating to.
Overall qualification for the program and the metric of financial viability.
And what has been added is a.
The new target is a reasonable prospect of repayment. So that's that's just kind of at the outset, probably the biggest hurdle.
Of the of the AGM for any new vehicle manufacturer that doesn't have.
<unk> profitability is that.
What does that kind of that that financial hurdle of can we project out based on your present sales that you're going be able to pay this back versus what is now the case, which specifically allows for things like detailed market research to help bolster those cases, so that we were doing that piece of it anyway as part of our.
<unk>, that's been a big effort over the last quarter is just getting.
What we think is the is the underlying justification and then to your point there are requirements about what types of vehicles are actually supported and closed.
Our fully enclosed vehicles that are ultra efficient carry two people so on and so forth and cheez.
Is it a little bit in the overview company video that.
We have what we are considering sort of a mass market commuter vehicle.
On the drawing board.
Teased it in very very broad strokes at the beginning of this year, we talked about our target for 2024. So that is really what we are applying for the bulk of those funds for.
We were we're making the investments in the core platform ourselves and then but that major piece and that's the piece that is.
Some of the big.
Ticket tool.
Tooling and machine.
All of the sort of the big expense of going into scale production a lot of that is in that.
Mass market fully embodied commuter type vehicle and that's really what we're looking to the feds for help to get built.
It's nice to see our friends in D C actually fix that set of emerging growth companies can benefit so.
Congratulations good luck with that application I am going to hop back in the queue. Thank you. Thanks Craig.
Right.
Jim.
Yes.
Hey, Mark Thanks.
Thanks for asking me to join you.
Wondering about the price of the vehicle in 2022 is your manufacturing increases.
Are you going to pass along to customers the I'm, assuming that there's going to be cost increases U S.
Yes.
Our first goal on cost decrease is for US is to just get to per unit profitability.
And we see a couple of ways that that happens one is just by getting the getting it so that we have.
Positive gross margin in the second is that as we look at a variety of rental operations, we want to.
We think that we can drive.
And so in some cases substantially higher revenue per unit created with assured used model than we can with an individual sale as we get into is this sort of more mass production.
Portions of the platform come in so we'll see cost reductions excellent. For example, you saw that the vacuum forming cell.
It was there was a short clip of that that is now landed in our production facility we.
Powered it up we're starting to run test parts will have production parts on that we think in Q1 and.
And that's going to be one of multiple cost reduction programs.
The bigger steps happen starting towards the end of next year.
And those are the much higher scale targeted.
Changes that are coming into the platform and that's when it would be sort of in 2023.
And beyond that we'd start to see some big price reductions on the consumer side.
Okay. Thanks, and then you've indicated that the increased production in 2022 is going to the rental markets. So I'm, assuming that that requires a substantial increase in your rental outlets.
Is that true and if so where would that be so.
We generally try not to reinvent the wheel.
Although on our platform to projects, we certainly are.
When it comes to rentals, we certainly envisioned arc modal having.
A number of flagship rental stores that carry our own brand.
But there are.
Ton of companies out there doing destination rental I mean, as an example, we're going to be Demoing, our kimono today on the right of the Orkin answer that at a at an E bike rental shop in Phoenix.
So the plan there is really to say how can we.
With the most efficient and then sort of the most efficient capital pathway.
Get the arc of motor vehicles out into the market establish the right win win relationships.
With current end market players.
And really drive both unit deployment and lots and lots of brand awareness.
Is it possible that you would take equity positions and some of these rental outlets or is that.
Not in the plans now.
I think thats certainly on the table.
The simplest.
Equation as us.
Renting a vehicle or leasing a vehicle that is in re rented.
But I think that there are.
Certainly some groups that we have talked to where.
We have longer term strategic alignment.
And right now, it's just really all about identifying.
And teaming up with the sort of the low hanging fruit opportunities in the market.
Alright, very good thanks, a lot thats it for me Thanks, Jim.
Barry.
I saw him Mike Mike <unk> hand went up Mike.
And then we'll get to you very okay great.
Okay.
Yeah.
Mike.
And I get and sound.
Headset connected perhaps Bluetooth.
Alright, we're going to we're going.
Go to Barry Sine and then Mike will get back to you.
Hey, guys. Good morning, Mark and team and then this is my first time on the panel. So thank you very much really exciting.
At Oracle Moto.
As the financial analysts Nirvana is 2023, you get to 50000 units production capability youre producing in profit profitably and trying to think about and understand the challenges you still had between now and then getting there one of them and you've talked about all of that and talked about the progress one of them.
Obviously as a <unk> two point.
<unk> brought in Monroe, nobody better than the industry.
The next challenge is going to be selling 50000 units to date I think in your Q. It talks about about 5000 units sold to date Youre doing this right of the Orca program I'd be curious how many people are you seeing in this program to date, how many would you expect and then presumably even that does.
Get you to selling 50000 units a year. So what are your longer term plans for sales, we can do something big like a Super Bowl AD. How do you sell 50000 units a year once you've done all this hard work to design a production ready vehicle and build the plant.
Fantastic question and guys on the <unk>.
<unk>.
Exec team feel free to chime in with your thoughts I think Mike.
What I'd say is there are going to be multiple components to that one as well.
We're targeting basically a price tag that is truly affordable for the mass market so were assuming.
On average selling price around 15, K, which would put a base model.
Somewhere.
Long term intent is to get the base model is close to 10 as we can.
That would be really something that is it.
As we've seen the market there is a niche market for this product.
Product family in the 20 plus range as you get closer to <unk> that has a much wider market and then as you get to 10, it's a credit card purchase for a lot of people and it's just it's almost everybody.
So.
In terms of building that awareness just as one example, we were in we were in Austin over the weekend with the right of the Argonauts over the span of that event, we did more than 200 test drives of the fun utility vehicles to vehicles.
It was this was it the electrify America show it.
It was it was definitely.
Ark model is I would say the heightened us there in terms of the intensity of interest in folks and there is what we would expect to see as sort of the catalytic effect.
That we all saw with Tesla Motors, which is that.
As soon as there was one Tesla in the neighborhood then the neighborhood.
They gave their friends rising their neighbors drive it in pretty soon two or three or four were sold just by word of mouth.
I have never experienced a product in my life that has the same sort of.
Just.
Customer enthusiasm and certainly if anything I've ever worked on.
That the that the Ark motor does and I think that's going to be a really key piece of the virality.
And then finally again one of the reasons why we're focused on rentals.
One we think we're going to be able to drive more revenue per vehicle to we think utilization of vehicles is really important. So it's not just about light weighting the platform. It's about making sure that is in use much more frequently than a car is.
Finally, it's just it's all about getting.
Lots and lots and lots and lots of butts in seats to help build the market for when we're at scale production and ultimately we see 50000 units per year as one steppingstone on a path to two sort of.
Much much higher volumes than that if we are to be truly successful in making a meaningful difference in terms of climate emissions.
So in dosing the ball and it sounds like.
This is actually.
I don't know Jesse or you wanted to cut the check on a Super Bowl AD Fritz.
I would say.
My philosophy is keep them keep them money on the road so we want to.
This even goes back to why we are doing right of the Argonauts in the first place is just the traditional means of vehicle marketing I think are crazy and wasteful and so we're going to try and do it in a more efficient way.
But you know.
I wouldn't rule anything out at this point.
Okay. If I can slip in a second question and I'll go back into queue on the ATB.
I'm not as familiar with that program or their timelines you've talked about by year end getting what you called a draft applications of vinyl.
Sorry, a final draft.
We're ready to put this one to.
We've done a ton of work.
Over the last quarter and a half to really refine both our understanding of the marketplace that we're going into and then the planning for all of the pieces that were that were asking for help for and Thats the planning for.
Automated battery production and all of the various constituent components of the vehicle the new.
Mass Producible chassis design.
Electronics, and so on and so.
We think that by the end of this year, we will we will be in.
Have it all tied up with a bow and we're hopeful that that can move through through their process quickly.
Can you give defining quickly what milestones should investors look for army.
Initial feedback when is the final approval do they have any mandated timelines on their review of that process.
There are two kind of key.
Prior to funding there too.
Kind of key milestones one is the designation of substantially substantial completeness.
Which is at the point that is designated substantially complete then we can begin.
Accruing costs against a future loans.
In the event that that is a successful application.
And then the second kind of key milestone is a conditional commitment to fund and then finally as you know sort of closing and signing all the docs.
I don't believe there is a fixed timeline, what we have heard from the department is that they.
All the way to the top of the loan program is that they want to.
Be moving very expeditiously on their side.
So.
I would expect somewhere in the.
Once it's all tied up with a bow.
My best guess would be somewhere in the six to nine month range, but again I don't want to speak for the Doe.
They have they're reviewing their process.
I have my fingers crossed for you. Thank you for taking my questions. Thank you Barry Alright, Mike.
Real quick actually.
Sorry, Mike in the chat Scott asked for clarification on the 500 sold that was talked about.
Sure Barry was.
Yes go ahead, thank you Barry.
In terms of.
That 5000 number I think you're thinking of our preorders and indications of interest those are not actually sold vehicles.
We have now.
The end of Q3, we had manufactured in total what 424 vehicles that right, Doug correct 424 vehicles manufactured and.
298 zone.
Almost 300, alright, so there's a lot of differences either in inventory or until our marketing vehicles.
Okay being utilized.
So that is.
Yes, those indications of interest we expect those are those are basically increased quarter over quarter.
Sure.
Well since we started taking reservations I think.
But but we're.
Part of the goal here is really again just to build the market place further in anticipation of much higher volume of production.
Alright, Mike we've got a mic.
Can you hear me now yes, Sir.
Excellent.
I did Miss a few of these questions is how does that put on another conference call. So if I ask something just tell me to go to the Tesla that the replay later.
My first question is about the infrastructure Bill that was signed yesterday or even just general state subsidies.
Movies.
Know of any.
Subsidies federal or state that now include we will.
Weather, along with the two wheel or with a four wheel subsidy and we should be aware of thats changed over let's say the last nine months or so yes. So I did talk a bit about the infrastructure Bill and.
So you can't have the transfer for that in terms of tax credits.
Oregon has.
2500 up to I think a 5000 dollar credit is that still in there and then the state of California has a 2000 and $250 credit that applies the Ark model. We were we've been pleased that for the for the first time in I think more than 10 years.
The latest draft of the of the.
A reconciliation bill now at the federal level includes a $7500 tax credit for two and three wheeled vehicles that are electric.
So when you start to add that into the equation.
Things like.
Pretty amazing of course anything can happen in D C that debt.
That bill has not passed.
Theres much sausage, making between now and the promised land so.
But we take it as a very positive sign of course that ended up in a bill.
And.
We'll pull that our partners in Congress will be able to.
Push that through and make it happen.
Outstanding.
I wanted to ask secondly, about your pseudo autonomy and there were some parts of the book of the video to have that.
But can.
We tied in with essentially whats happening with the delivery to.
We're starting to see autonomous delivery vehicles come out and I'm wondering.
If the platform that you have right now can fit a different shape in a single driver vehicle.
Could it have a just a giant thoughts on.
And what was the capacity of that.
And actually the company that is.
Sort of has been driving driverless on the argument of platform company called fashion their whole.
What they've articulated publicly is that they are wanting to go after that.
Last mile last 10 mile delivery with a driverless solution and we use driverless because driverless encompasses a range of technologies from remote operation to limited autonomy to some.
Some other stuff is even I think lower hanging fruit in that.
But but yes, we.
We definitely see an opportunity for the platform in that space.
So that's.
<unk>.
We are focused initially on the robo valet and even some precursors that get there, which as you know hit a button on your phone whichever one of the argument as you need pulls up you jumped in the driver's seat and that distinction is really critical just because it is a it has a substantially lower hurdle rate. If you if you have a.
<unk> valet that only needs to go on some of the roads or it can go on designated pathways are designated loops.
Only at low speed and is only driving driver Leslie when Theres no human in it that is an easier technical problem to solve than the full robo taxi that goes on all roads that all speeds with human cargo.
And yet that elements.
The Robo Valley piece is what is the cost reduction of the robot taxi fleet. It takes.
It takes that logistics problem of getting your right to you.
The equation and then when an arc motor shows up.
Most people prefer to jump in the driver's seat.
Yeah.
I'm just I'm curious as to why you didn't have a driver what could how much cargo could.
Football with a person on it.
I think that's about it.
Just off the top of my head I would say you could have.
Words of five or 600 pounds of cargo on our present platform.
And then.
Could have lots of different storage boxes, you could have.
There are a bunch of ways to attack.
Attack that problem I think the advantage that the art kimono has is that it can.
That platform Tan.
Go 100 miles of driving and can achieve.
Higher speed certainly than like a neighborhood electric vehicle. So we see we see opportunity there for that.
Fully nonhuman.
Opportunities for delivery.
Again, all on the same platform so the.
And one of the things I think that really.
We have heard from from fashion is just that it was the fact that we had aimed this platform for autonomy.
From day one.
Made it a lot easier for them to do that integration.
I'll say this.
This is just developing in so many different ways. Thanks for answering.
My question.
Thanks, Mike.
Fritz.
We've got a few minutes left.
Can we get some of the questions from say.
Yes.
Sure.
Rather top here's question about South Korea, we recently.
Got a release highlighting.
Our work there in our presentation. There whats specifically is arent going to looking forward South Korea is there any specific progress that you can share all right I'm going to I'm going to turn it over to Mike to Dilip here.
Talk about South Korea, and then also if you can give just a general lay of the land in terms of what we're seeing on the international front.
Without getting into any obviously specifics that we haven't talked about yet.
Okay.
Alright, Thank you Mark.
So yes, Mark had this opportunity, making a presentation of our kimono and products.
One of the conferences themselves.
That are sponsored by Quadro, which is the.
Agency of the Korean government.
To attract investment into South Korea. So.
What we're looking at South Korea is one of the most innovative markets in the world that is really I mean from an adoption of innovative products. I mean that is really stands out south Korea really stands out so.
It just made sense for us to make the presentation and just.
Tesla market of course.
From a.
International perspective, I think one of the things that we're looking at because F&B assess markets, which is basically the federal.
Motor vehicle safety standards market, which is the U S safety standards that is being accepted many of the Caribbean countries.
The American U S standards and those are the countries that we are targeting because then we don't have to own one.
It is easy.
From an international perspective.
Definitely see a tremendous amount of opportunity.
Europe has great potential of course other than if MBS markets.
Asia some other countries in Asia really has a great.
For Asia.
But in all cases, we have to home and look at the product. So that is going to take some investment and we're going to wait for that.
To make that right.
<unk>.
Sorry, Mark.
I just think this is.
You can probably kind of get.
A common theme here with <unk>, which is that we are trying.
Very best too.
State as capital efficient as we can and to take the low hanging fruit that's out there first.
Ultimately, we do see this as a global market play.
It is easier to enter a market where our current product is already legal to operate on the road.
So yes.
Got it.
I think quite a few exciting opportunities coming down the pike on that front.
Yeah.
Thanks Bill.
Thinking long term cannot promote explained to us their strategy on how their ridesharing business will be able to benefit from economies of scale. While also capturing significant backend revenues during the vehicles lights.
Do you see it being an approximately three years.
So.
So I would say one of the.
One of the real advantages of the electric vehicle.
Typically is that.
A longer lasting requires less maintenance.
At the end of the day, we want to build artifacts things that that gopher.
500000, or 1 million miles.
Good use.
That is a longer long term cost reducer components of the rideshare business model.
But the sort of the nearer term would be just reducing the logistics costs.
<unk> shared vehicle fleets.
And what we've seen in the market is that theres been a bunch of different rideshare business models that have been tried.
Only a few have actually worked for shared vehicles. The others are just end up being perpetual.
Cash things, but one of the one of the real challenges with any shared use fleet is just the logistics of moving vehicles around and getting vehicles, where customers are going to want to ride them and thats, where we see some real low hanging fruit opportunity in the driverless slash autonomous space.
And those are that those are the pieces that were going to be going after first.
Im sorry, what was the last piece of that question.
What did you say of being in approximately three years.
So in three years, we are we've said at the beginning of this year, we set 2024 as our target for both that kind of fully embody the argument of being on the road as well as meaningful deployments.
<unk>.
<unk>.
Driverless Robo valet type fleets.
That's the three years out vision is that you three years out our target is that you hit a button on your phone and one of our several if not many rubber.
<unk> la markets and the arc of mono you need.
For your days trip or your hours trip shows up in front of you and you jump in the driver's seat and go.
That's the three years out vision.
And then the follow up.
The same subject when scaled emphasis aren't going to believe it will cost on a per mile basis to operate a semi autonomous or fully autonomous ride sharing fleet of Suvs, we've taken some some.
Kind of very back of the envelope.
Numbers of this gesture or are we thinking.
There is sort of the near term would be.
Buck and a quarter mile something like that.
But.
Ultimately, we want to reduce the cost of driving even well below that.
We want this to be effectively.
Personalized mass transit something that is that has or not.
Not just a real environmental component, but truly an equity component as well.
Okay.
We are at 630, how you feel and you want to take a couple more or.
I've got to jump onto.
Jump back on the bus and go do some Dallas and Scottsdale, but I'll, let's take let's take one more question.
Okay, and what are the possibilities to.
Take a strategic alliance with a company like Hertz is looking to reinvent itself.
Many tourist locations it could be a good match for such a deal.
Yeah, I would say that I think Ark model provides an opportunity for many.
Companies looking to reinvent themselves and how they do business to team up.
And I have been.
Certainly very pleased to see that hurts us, making a big move into electric vehicles with their commitment to buy I think a 100000 tesla's.
In relatively short order.
So.
And yes, we see opportunities for partnership.
Certainly in rental and rideshare in.
And then of course, all up and down the vehicle architecture.
At the end of the day sustainability as a social networking exercise that's going to require all of US working together to solve really what is the truly pressing challenge of our times.
And Thats I think I think that that type of collaboration is really baked into the DNA of the company.
And I think Thats, a fine closure so.
Really really appreciate you all coming out here. This morning, I want to thank our panel of analysts for joining.
The executives apologies for the $5 30 wake up into.
And to all of you who joined US thanks for tuning in we will see you Susan.