Arcimoto Inc Up 287% in 2020, Just Getting Started
Arcimoto Inc (NASDAQ:FUV) is an electronic vehicle (EV) company that has been overshadowed by its flashier peers. But that may soon change. The Eugene, Oregon-based company started deliveries of its “Fun Utility Vehicles” (FUVs) in late 2019, and the production of its commercial cars is still on track to start in late 2020.
In June and July, the company raised about $26.5 million in three separate stock sales to institutional investors. This provided the company with a stronger balance sheet, which includes virtually no long-term debt.
FUV Stock Overview
Arcimoto Inc designs, develops, manufactures, and sells EVs. Whereas most EV manufacturers are focused on traditional four-wheel cars and trucks, Arcimoto is looking to capture the three-wheeled market, as well as the electric car market.
|Metric||Electric Car Vision||Arcimoto Vision|
|Platform Weight Target||4,000 lbs||1,000 lbs|
|Battery Capacity||80 kWh||20 kWh|
|Footprint||100 sq. ft.||35 sq. ft.|
|Affordability Target at Mass Production||$35,000 (average cost of new car)||$10,000 (cost of motorcycle or golf cart)|
|Market Needs||One or two people going for coffee||One or two people going for coffee|
(Source: “Arcimoto Spring 2020,” Arcimoto, Inc, last accessed July 16, 2020.)
Arcimoto’s current portfolio consists of its FUV (two-seat urban vehicle), “Rapid Responder” (for emergency, security, and law enforcement services), and the “Deliverator” (for delivery services).
Production and deliveries of the $19,900 FUV began in September 2019. (Source: “Arcimoto Begins Retail Production and Delivery of Ultra-Efficient, Pure-Electric Fun Utility Vehicles,” Business Wire, September 19, 2019.)
In the first quarter of 2020, the company launched pilot programs for both the Rapid Responder and Deliverator. Both vehicles are scheduled for production by the end of 2020.
The opportunity for both vehicles is massive.
Some 70 million cars and 132 million motorcycles are produced worldwide annually, representing a global opportunity of more than $2.0 trillion.
Harley-Davidson Inc (NYSE:HOG) sells approximately 250,000 motorcycles each year while the North American market for all-terrain vehicles (ATVs) is greater than 500,000 units per year.
Arcimoto Inc said it has experienced a lot of interest in its vehicles from fire departments and potential delivery partners looking for more affordable, green alternatives to traditional gas-powered vehicles. (Source: “Arcimoto Spring 2020,” Arcimoto, Inc, op. cit.)
There are 51,000 fire stations in the U.S., plus corporate campuses and police services. Their fleets face mandates for greenhouse gas emissions reductions.
About 65 billion parcels are delivered worldwide annually, representing more than $250.0 billion in parcel revenue.
Furthermore, the food delivery industry could grow from $30.0 to $365.0 billion by 2030.
Chart courtesy of StockCharts.com
2019 was a watershed year for Arcimoto. The company initiated retail production and built more vehicles in the fourth quarter than in all previous years combined. (Source: “Arcimoto Reports First Quarter 2020 Financial Results and Provides Corporate Update,” Arcimoto, Inc, June 11, 2020.)
In the first quarter of 2020, up to the emergence of COVID-19, Arcimoto increased the pace of production and customer deliveries of the FUV.
The company temporarily closed its U.S. factory in Eugene in March as a result of the pandemic, but reopened it in a limited capacity in May 2020. Arcimoto is taking a measured approach to returning to full production.
In June, the company announced an agreement with Munro & Associates, Inc. to evaluate its manufacturing processes and supply chain management in an effort to reduce costs and transition to high-volume production.
On June 11, Arcimoto announced its financial results for the first quarter ended March 31. Total revenue came in at $616,795, compared to just $2,645 in the same prior-year period. (Source: “Arcimoto Reports First Quarter 2020 Financial Results and Provides Corporate Update,” Arcimoto, Inc, June 11, 2020, op. cit.)
The big jump in revenue was mainly a result of sales of its FUV products that began in late 2019.
Unfortunately, first-quarter revenue was negatively affected by the suspension of vehicle production as a result of COVID-19. Before the shutdown, the company had increased production to two vehicles per day, up from one a day.
Arcimoto reported a first-quarter net loss of $3.6 million, or $0.15 per share, compared to a first-quarter 2019 net loss of $3.1 million, or $0.20 per share.
The company ended the quarter with $1.9 million in cash and cash equivalents. That figure is, of course, much higher now, thanks to the three cash infusions it received in June and July from institutional investors.
Arcimoto Raises $26.5 Million From Institutional Investors
On June 11, Arcimoto Inc announced that it had raised approximately $8.0 million in a stock sale to institutional investors. The company sold 2.6 million shares at $3.00 per share. (Source: Arcimoto Announces $8 Million Common Stock Only Registered Direct Offering Priced At-the-Market,” Business Wire, June 11, 2020.)
Later that same month, Arcimoto completed its second stock sale, selling 1.7 million shares at $5.00 per share to institutional investors. This put an additional $8.5 million in the company’s coffers. (Source: “Arcimoto Announces $8.5 Million Common Stock Only Registered Direct Offering,” Business Wire, June 30, 2020.)
On July 9, Arcimoto sold almost 1.4 million shares at $7.30 per share, with gross proceeds of $10.0 million. (Source: “Arcimoto Announces $10 Million Common Stock Only Registered Direct Offering,” Business Wire, July 9, 2020.)
Arcimoto stock has been on a tear since the start of April, up about 287% year-to-date. After such a red-hot run, the stock has given up a little ground. For those who missed out on those big gains, the recent sell-off has put FUV stock in a better trading range.
Despite the big run on Arcimoto stock, it still has huge upside potential.
As mentioned, the company only started commercial production and sales of its first vehicle in late 2019. Arcimoto Inc will be starting the production of two of its other vehicles in the second half of 2020. These two products cater to different markets and will be, the company says, “integral” to its growth and sales.