Talks up pivot to destination rental strategy
Arcimoto — maker of the three-wheeled, all-electric fun utility vehicle (FUV) — published its 2018 Q2 financial report last week, and it is awesome. Not because of any standout accomplishment, though it's fair to say the company appears to be making good progress. No, it's awesome because, instead of handing us a boring document with the necessary financial information dressed up with a couple photos and graphs, they've created a sweet four-minute video (above) that walks us through its achievements and tells us what we can look forward to.
There are a couple big takeaways from the latest update. The biggest is the clear enunciation of its marketing plan going forward. Instead of buying up billboards or opening retail stores, it's going to focus on destination rentals. That is, it will rent out its FUV at "rental experience centers" located in popular vacation destinations. This allows it to immediately see a revenue stream while also introducing the joys of open-sided electric three-wheeling to potential customers without a ham-handed sales pitch. The first two locations will be in its hometown of Eugen, Oregon and the Encinitas/Carlsbad area of southern California.
If you listen to the Q2 Earnings Webcast (it features the video above followed by a little more detailed company information, along with a question and answer session full of additional information, and is embedded below), you'll learn that they intend to franchise these rental experience centers to further drive growth and revenue. Sales won't happen at these stores. At least, for now, that isn't the plan. Instead, sales will be conducted online only with service being handled by independent outfits. As the professional analysts might say, it strikes us as a pretty capital efficient way to expand the company.
The other main point the video makes is that everything is on schedule. The end-of-year target for beginning retail production seems achievable. That's good because the pre-order list has grown to 2,800 units despite a lack of marketing effort. As manufacturing ramps up, they expect to be able to fill those orders next year. In fact, by the end of the year, with just a single shift, they believe they could be churning out as many as 200 a week. That translates into 10,000 a year, and they feel they could more than double that figure with another shift.
In case they need even more capacity — and with an eye on the international market, that's not outside the realm of possibility — the company is hoping to open another manufacturing facility on the east coast of the United States and has applied for a $100 million loan under the government ATVM program to help make that happen. We hope they aren't holding their breath waiting for a positive response and have a Plan B for funding this, in light of the fact that the government program, although still flush with billions of dollars, hasn't loaned out money in a number of years.
If you enjoyed the above presentation, you may find the full webcast below pretty interesting as well. Lots of questions get answered and the plan clarified. Enjoy!