In this post, I’m going to be discussing a company called Arcimoto and explaining what they do. Arcimoto is a public company founded by their CEO Mark Frohnmayer, in 2007. 

“Our mission is to catalyze the shift to a sustainable transportation system. We believe that will only happen when we move away from oversized, overpriced, polluting vehicles to right-sized, ultra-efficient EVs we all can afford. We can’t afford not to.” – Arcimoto. 

Disclaimer:  I am a shareholder of Arcimoto, meaning that my opinions may be biased. Read my full disclaimer here.

Overview

Arcimoto produces three-wheeled electric vehicles, similar to a motorcycle. Currently, they are producing one model, called the FUV or Fun Utility Vehicle. However, they have plans to manufacture four other models: the Deliverater (a last-mile food and package delivery vehicle), the Roadster (“Designed to be the ultimate on-road fun machine”), the Rapid Responder (“designed to improve response times, reduces operating costs”), and the Camieo (marketed at filmmakers and influencers.)

The problem 

“There is a giant gap between the motorcycle and the car. If you live in Europe or South East Asia, there is usually a lot more filling that gap, but in the US market, there is an ever-widening disparity between the two-wheeled motorized scooter and the large four-wheeled car” – Mark Frohnmayer.

Arcimoto attempts to fill this gap with the FUV. 

“It no longer makes sense for one person to drive a seven-passenger SUV to work every day,” the company adds. “In the future, we’ll drive small EVs built for one or two people to maximize efficiency” – Arcimoto.

Where their at:

Arcimoto has been prototyping the FUV for over ten years. The goal? To make “the right platform for daily transportation” thats affordable, electric, safe, lightweight, and high-quality. 

Arcimoto has achieved these goals with the latest generation of its FUV. The company is now in one of the final phases before mass production: streamlining the design to reduce the cost and increase production speed. 

Arcimoto is now working with Sandy Monro of Monro & Associates to get to mass production. Monro is an expert in EV vehicle production and consulted Tesla to help them ramp their model 3 production. Together, Arcimoto and Monro & Associates plan to ramp production to 50,000 units per year in their new facility within the next two years.

The opportunity

Arcimoto’s goal is to catalyze the shift to electric vehicles and fill the gap between a car’s purpose and its use. After years of prototyping and perfecting the vehicle’s design, the company is finally ready to start mass production. Its five models all utilize the same platform making expanding manufacturing much easier. 

There are six main areas where Arcimoto vehicles have a big opportunity to gain market share: daily use, food delivery, sustainability, international markets, ridesharing, and rapid response.

Daily use 

The Fun Utility Vehicle (FUV) is the first model Arcimoto is producing. The FUV is the perfect vehicle for running errands, grocery shopping, commuting, etc. With 75 MPH Top Speed and a 102 City Mile Range, the FUV has many of a car’s capabilities while being more cheap, efficient, and fun. 

Considering that most car rides only have one or two passengers makes the FUV an attractive every-day vehicle.

Food Delivery 

Arcimoto’s Deliverator has huge potential in the food delivery industry. The Deliverator would allow food delivery drivers to save thousands of dollars a year, combined with potential government incentives and ease of use make the Deliverator an appealing car. 

Sustainability

As EVs experience technological breakthroughs, sales continue to climb, and global warming becomes a more pressing issue, it seems increasingly apparent that the world is going electric. 

In the next few decades, as the world shifts towards EVs, many companies are pledging to reduce or eliminate their carbon emotions, and having EVs is a large part of that. 

Having a fleet of Arcimotos instead of gas cars would be an excellent tool for marketing and would look great on social media. Arcimoto’s vehicles are an amazing choice for many companies because of their efficiency and comparatively low costs.

Additionally, delivery apps like DoorDash could also advertise deliveries from Deliverators and other EV vehicles as “sustainable” and charge an additional delivery fee. Say they charged a fee of $0.5 for sustainable delivery. That would generate an additional $1000 to $2000 in revenue per deliverer per year.

Rapid response 

In places like campuses, golf courses, parks where paths aren’t constructed for cars, Arcimotos Rapid Responder is perfect. It would allow security to easily patrol, respond to reported incidents, and allow medics and firefighters to respond to calls quickly.

“In 2019, we responded to more than 40,000 emergency calls, and a large number of those could have been better serviced using Arcimoto’s Rapid Responder. We are extremely proud to be the first firehouse in the world to deploy this cutting-edge vehicle.” – Chief Chris Heppel of the Eugene-Springfield Fire

Autonomy

Arcimoto’s vehicles could be the perfect vehicle for an autonomous taxi network.

“When you look at ridesharing (Uber, Lyft), 85% of those trips are one passenger in the backseat, right? If you think about the direction that the big automotive world has been talking about autonomy, it’s five to seven, maybe even more passenger vehicles. … Frankly, we think that approach is barking up the wrong tree.” – Mark Frohnmayer. 

CEO of Arcimoto, Mark Frohnmayer, believes that having large SUV autonomous taxis doesn’t make sense. Rather, he plans to capitalize on the ~85% of ridesharing trips with only one passenger. 

“We are building an electromechanical, very lightweight, very efficient, very fun platform that doesn’t take up a lot of space on the road. … There are dozens of companies out there that are developing sensors and software and all of the brains to autonomously drive a vehicle down the road. Our plan is to build the platforms that those solutions sit upon. … [These companies] are not going to have a clear path to market, and thats where we think Arcimoto is going to being an ideal partner” – Mark Frohnmayer.

Mark believes that Arcimoto, in collaboration with autonomy companies, will create the perfect vehicle for a large portion of autonomous rides. Although autonomy probably won’t come to Arcimotos vehicles for a few years, Arcimotos as autonomous taxi vehicles could be a huge source of income in the future.

International markets 

In densely populated countries like China, India, and European countries with narrow roads, the FUV could be the perfect vehicle. 

China alone has invested over $60 billion in the EV industry, and “it’s pushing an ambitious plan to transition to all-electric or hybrid cars by 2035” – CNBC. Why? “they’ve always been a follower in traditional vehicles, and they wanted to find a way to catch up technologically and not be dependent on Europe or the US on engine technology.” – CNBC

So far in China, the demand for EVs has been mostly artificial, propped up by subsidies and regulations. However, in 2020, Chinese citizens began to want high-end EV vehicles like Tesla’s, separate from government incentives. In 2020, Tesla did an impressive $6.66 billion in sales in China, representing 21% of its total earnings.

Similarly, Arcimoto could sell a lot of vehicles internationally in densely populated countries that are strong pushing EVs. Just today, Arcimoto announced that they’d be hiring Dilip K. Sundaram as “Chief International Business Officer”

“‘Arcimoto is on the cusp of revolutionizing the way we commute and travel, and I am delighted to join the team,'” said Sundaram. “Sundaram brings more than twenty years of international automotive leadership experience to Arcimoto. Previously, Sundaram was the President, Corporate Affairs of Mahindra Group – Americas (US, Canada, and Latin America), where he opened the company’s first corporate office in Washington, DC, and oversaw Mahindra’s expansion efforts in the Americas” – Business Wire

Concerns

1. Arcimoto is still two to three years away from mass production and hasn’t yet proven mass demand.
2. As of now, Arcimoto’s vehicles are open-air, meaning their sub-optimal for cold climates and during the winter season. However, during an interview, Mark stated that Arcimoto has plans to sell a fully enclosed vehicle with an HVAC system in the future.
3. Although the Arcimoto is much safer than a motorcycle and takes many safety precautions, it would be disadvantaged if it got in an accident with a car.

The takeaways

1. Arcimoto is a publicly-traded EV company founded in 2007. 
2. Arcimoto produces three-wheeled electric vehicles similar to a motorcycle.
3. Currently, they plan to produce five models, all taking advantage of the same three-wheeled platform.
4. The FUV attempts to fill the gap between the “two-wheeled motorized scooter and the large four-wheeled car.”
5. The company is in the process of streamlining its car to reduce the cost of mass production and increase speed. 
6. Arcimoto is working with Sandy Monro, an expert in the field of EV vehicle production, to ramp it’s production.
7. Arcimoto plans to ramp their production to 50,000 units per year in their new facility within the next two years.
8. The company has a current market cap of ~ 450M, down from its high of ~ 1 billion.
9. Daily use, food delivery, sustainability, international markets, ridesharing, and rapid response are the six main areas where Arcimoto vehicles have a big opportunity to gain market share.
10. The FUV has a 75 MPH Top Speed and a 102 City Mile Range.
11. The FUV is the perfect vehicle for running errands, grocery shopping, commuting, etc. 
12. Gas savings, time savings, sustainability, and potential rebates/government incentives combined could make Arcimoto the preferred Food delivery vehicle.
13. Arcimoto’s vehicles are efficient and comparatively cheap, making them an amazing choice for many companies.
14. In places like campuses, golf courses, parks where paths aren’t constructed for cars, Arcimotos Rapid Responder is perfect.
15. CEO of Arcimoto, Mark Frohnmayer, believes that having large SUV autonomous taxis doesn’t make sense. Rather, he plans to capitalize on the ~85% of ridesharing trips with only one passenger. 
16. Arcimoto vehicles could be a big hit internationally, in dense countries like China and India.
17. Arcimoto is still far from mass production. 
18. Arcimoto’s are open-air, making them undesirable in cold climates.

Image credit: Arcimoto