Arcimoto Inc: Overlooked EV Stock Poised for Massive Growth

Arcimoto Inc Expects to Ramp Up Production in 2022

To take advantage of the stock market, investors need to take calculated risks—calculated being the operative word. This means capitalizing on opportunities.

In early November, the passage of the $1.2-trillion U.S. infrastructure bill was announced. A portion of the money is being designated for the electric vehicle (EV) industry. (Source: “H.R.3684 – Infrastructure Investment and Jobs Act,” Congress.gov, last accessed November 22, 2021.)

This supports President Joe Biden’s desire to have 50% of all vehicles sold in the U.S. to be either battery electric, fuel-cell electric, or plug-in hybrid by 2030. Some states are taking a more aggressive stance, with Oregon planning to make it 100% by 2040.

In this political environment, one opportunity for investors is Arcimoto Inc (NASDAQ:FUV). Arcimoto doesn’t garner the same kind of media attention that other EV makers like Tesla Inc (NASDAQ:TSLA) and Lucid Group (NASDAQ:LCID) do, but it could soon.

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For EV companies to really attract attention on Wall Street, they need to move beyond the development stage to full production. And that’s on the immediate horizon for Arcimoto Inc.

While the company has been producing a growing number of three-wheel EVs over the last few quarters, it expects to move into larger-scale production in the second half of 2022.

Early this year, Arcimoto Inc agreed to purchase a new factory to produce its three-wheel, open-cockpit EVs. (Source: “Arcimoto Enters Purchase Agreement to Expand Manufacturing Footprint by 185,000 Square Feet in Eugene, Oregon,” Business Wire, January 6, 2021.)

The 185,000-square-foot factory (larger than three football fields) is more than five times the size of its current manufacturing space.

Arcimoto Inc said it expects to pause its vehicle production in the first quarter of 2022 to finish setting up the new facility. Once the new factory is at full capacity, the company expects to build 50,000 vehicles per year.

Arcimoto also plans to complete the engineering and testing of battery packs using a next-generation cell from its supplier, offering incremental performance improvements to its customers.

Arcimoto Inc’s impending large-scale production has caught the eye of Wall Street, which has an average 12-month share-price forecast of $18.00 for Arcimoto stock. Currently trading at $10.23, that points to potential gains of 76% over the coming quarters.

Gains like that would be welcome news to FUV stockholders.

Arcimoto stock is up by 25% over the last six months and up by 10.7% year-over-year, but it’s down by 21% year-to-date and down by 72% since hitting a high of $36.80 in February.

FUV stock’s slide had more to do with broad-based concerns about rising bond yields—which led to a broad-based stock market sell-off—and less to do with anything fundamentally wrong at Arcimoto Inc.

If anything, the outlook for Arcimoto stock looks bright for 2022 and beyond.

Chart courtesy of StockCharts.com

FUV Stock Overview

The Eugene, OR-based Arcimoto designs, develops, manufactures, and sells ultra-efficient EVs.

Whereas most EV companies focus on traditional four-wheel vehicles, Arcimoto hopes to corner the three-wheel EV market and put a dent in traditional EV sales. (Source: “Q2 2021 Report,” Arcimoto Inc, August 16, 2021.)

The company’s flagship product is its “Fun Utility Vehicle” (“FUV”), which is a two-seat urban vehicle. Production of the FUV began in September 2019.

In November 2020, Arcimoto Inc began developing its “Roadster,” a three-wheel model aimed at the recreational motorcycle segment. The Roadster looks like an FUV with the roof and roll cage chopped off.

The “Rapid Responder,” which is designed for emergency, security, and law enforcement services, is in the pilot testing phase.

The “Deliverator” is, as its name implies, is for delivery services. It’s also the pilot testing phase.

Arcimoto Inc’s upcoming “Cameo,” which is designed for the film industry, will allow people to make more inspiring videos and action shots.

Then there’s the “Flatbed,” a pure-electric utility pickup truck that the company expects to launch in 2022.

Solid Q3 Results & Revenue Beat

For the third quarter ended September 30, Arcimoto announced that its revenue increased by 119% to $1.5 million, versus $684,000 in the same period last year. (Source: “Arcimoto Announces Third Quarter 2021 Financial Results and Provides Corporate Update,” Arcimoto Inc, November 15, 2021.)

The company also reported a third-quarter net loss of $11.5 million, or $0.31 per share.

Wall Street had been looking for third-quarter revenue of $1.0 million and a loss of $0.20 per share.

During the third quarter, Arcimoto Inc:

  • Sold a record 63 new vehicles and produced a total of 78 vehicles
  • Marked the first full quarter of Arcimoto-owned rental operations in San Diego, CA and Eugene
  • Launched its first vehicle-sharing initiative for “REEFDrive,” a new zero-emission vehicle-sharing program in Santa Monica, CA
  • Began accepting vehicle reservations from customers in Nevada, the fifth state in Arcimoto’s nationwide expansion plan
  • Started producing Roadsters
  • On-roaded its first Flatbed prototype pilots
  • Started making doors available for FUVs

Mark Frohnmayer, Arcimoto Inc’s founder and CEO, said that, during the third quarter, the company advanced on every front that’s critical for the company’s growth.

He also said Arcimoto’s push toward volume production continues to be the company’s most important overarching objective.

Analyst Take

Despite industry-wide supply chain issues, Arcimoto Inc has been having a solid year. The company reported a third-quarter revenue beat, including record third-quarter vehicle sales. It also unveiled new products and began renovating its new manufacturing space.

That’s essentially everything the company needs to do to achieve full-scale production.

Chances are good that Arcimoto stock won’t soar over the coming weeks, but it’s certainly an EV stock that investors should keep on their radar for 2022.