Arcimoto (FUVV) 16 Aug 222022 Q2 Earnings call transcript

Good afternoon, everyone and welcome to our Arcimoto's Q2 2022 Stakeholder Update Webinar. I'm Jesse Fittipaldi Interim-Chief Executive Officer. To start out, 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 forward-looking statements for the reasons we cite in our SEC filings. Today, we will hear from the executive team who will give a snapshot of the business, our challenges and rapid growth in key areas.

that you met soon. you forward I of meeting to those I yet, haven't look For the I've until as was my with new Strategy been Arcimoto role interim since CEO, XXXX and Chief Officer. I the to in be mission. Board role, thankful and to delighted the company in Arcimoto this executives me I'm employees, believing out and new I'm for carry for and our vision

catalyze Our to system. shift to transportation the mission is sustainable a

wide electric ultra-efficient and sustainable vehicles on of capable Since platform challenges. providing a to delivered consumers. produced invented a solutions of XXXX, to have range vehicles have transportation modern We we these

Our They significant each across are all of impact. are vehicles the people, designed share a and tool our of is same costly that products cause solve variation different to that ecosystem a move the vehicles transportation key parcels in today's these used moving food, the problem. platforms. equipment oversized logistics technology with environmental to And specific

volume, and Our the strategy next step term, reduce and and sales out factory to our prove achieve of accelerate automation the and cost design is we In long to growth our scale our profitability. production product, intend to manufacturing the in make sales. commercial expand This model leverage production across financials we we communities a customer a is how Today, will experience and to world. difference. other discuss capabilities marketing, replicable production,

year. day, Our production per of an represents which per run team annual a of vehicles achieved vehicles recently six rate XXXX rate

our highest profit. just quarter While gross to achieved we negative we have production to-date, continue generate

we curve. our production on phases early of As remain the

implement and we gross scale profit production to key volume, down expect improve cost as initiatives. continue We to our

sales groundwork production These production, sales. for up initiatives we've are marketing strategy meet to our the ramp cadence. we future laying deployed a As comprehensive

also full announcing revision This production year quarter, our target. to we're a

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Focusing plan products on with will kick making and with become grasp achieve a selling same company around the team financials. to as We is most we great plan we firm to off issues The American face but off to profitability company. manufacturers, more key challenges how has clear take a the these us us and Campoli Doug financials. will challenges. our a address have the

were record forward Tilting deployed sales moved operations into their rental Hi, with average sold Treasurer. and of XX my XXX Chief were quarterly at the Works is record of produced over assets. into XXXX in fixed and Motor Arcimoto's units our be or marketing other $XX,XXX second increase price sales will rental deployed or companies previous into and Campoli. Officer quarterly Doug price of average is XX $XX,XXX. Financial the quarter an were XX% balance I'm FUVs almost XX an and name sold

allocated our of a total on brand fleet and with have XX internal along As to fleet customers use. as ambassadors. XXXX, generation, R&D happy growing there revenue We FUVs road XXX marketing for XX, the XX June now available and of are FUVs rental

revenue by year-to-date all compared expect grew in times XXX% quarter. almost Rental revenue in started shutdown, reporting growth to locations even revenue. gaining generated increased revenue and segments. of the XX of XXXX period we across We Second second accounts with X% the gross the ramp XX% tourist in quarter, the profit over for first year-over-year to of Motor increased same period most Works to XXXX. compared during million traction quarter in $X.X revenue the Tilting move quarterly year-to-date production for the same and total negative revenue continued quarter

of sales and to higher million FUV reduce the warrants. of this XX, increase financing. the to has driver main behind $XXX,XXX products net of increased cash the $X volume the and equity to quarters. our $XX,XXX the a cost the and Year-to-date, continue and sequentially overhead Operating the Works headcount each were has exercise per revenue and the an gross volume. margin. vehicle Year-to-date, profit percentage was increased processes, million leveraging infrastructure FUV from ramp build $XX,XXX average approximately decreased However, increase million a price production from cost scale $XX.X out The approximately from ramp issuance ended we last is and was cash in for production COGS spend of of $X,XXX, we as two sold efficiencies cash COGS sales development main per of of in a an increase as received approximately Approximately June to structure received and approximately developed Year-to-date options drivers the from we we and the employee $XX,XXX cash XXXX goods production. debt efforts, average with $X.X in of also three cash increase our increased of as as one, from The and fixed year-over-year three, was production. infrastructure had equivalents. research increase XX% of We new is which build average vehicle. equipment manufacturing Tilting increased long-term to convertible anticipate quarter marketing drive of the consisted Motor production cost sale improved note sales expense price

the price. successfully at-the-market with impact stock offering utilized the have minimal on We

Hi, I'm Operating Terry Becker, at Arcimoto. Chief Officer

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needed requirements. will over vertical As powder the challenges three with complete coating that outside processes coat next when and production and well integration overcome the high logistics being automation quarters for of the brought decision are paint labor to suppliers. enable in-house is minimal another volume that assembly application are Battery

company forecast. the up plans supports capability scale forward production Going the for

we we the the final line, of to grow. integration With phases addition intentional added equipment, fabrication that focused labor on are capacity assembly vertical increase and as production

events keep our the as Expo we tour. feature own tentpole ride of as opportunities, the on Fritz, meaningful Argonauts set Hi, Marketing focused other areas a customer Officer. on XXXX In been out events efforts has to events the in organization climbing most and in our expect and summer key team made QX, X.XX we record as customer drive close hires experience teams and this electrify the and of we the To our charged here which out of several Similar to number rides, fully live, building team, for months sales but well as lead in assisting that and conversion. marketing demo call on participation Chief I'm we those include such generation seats, Eric sponsorship we attendance, leads further for QX. up around warming and that end, butts increase to focusing

Additionally, And limited those marketing sales funnel. has don't team QX, through leads doubled digital thunder nearly to but to leads lead the resulting in convert the starting about years to minimal here, QX. with as we process streamline steal and ad from continued as experimenting in But efforts of leads conversion saw growth initiated and QX. what order through from again, we want our delivery those spend started there. traffic customer optimization, Lynn the to online increase a QX and talk Similarly, will checkouts the works or see directly and web expect and content at our more to such teams options increase came Road, marketing taken I online QX, even dramatic in we learned those of Lynn's ad financing higher spend, we're additional to which as in and expect consistently. in we've efforts an experience freedom convert off efforts response. rate, and its We convert ad focus and

most partners recently fast through and them no endorsement licenses, determining helped include saw through as FUV. went drivers definitions longer big each motorcycle this the the acquiring Hawaii, jumping one legislation process a can This QX we or some process cycle and moving lobbying state Finally, can. and will their sales, the We these with state which delivery are in establishing just step opening capability and which vehicle hoops need in Maryland, we of that are dealer options. of pace wins manufacturer proving the helmet operate as on for so pass new a to for and through a service We front. Alabama modified is and auto

I'm Yeager, Chief Experience Hi, Lynn Officer.

base in California. In that Temecula the rental unique can been their been has support understand more Susie's wine on Juan tours partners awesome. and The engagement. and help And including optimize feedback added business. additional San thus our our in we market focus we each expanding within each can mentioned, far Eric Mopeds As lead drive QX, Island, value we has and

KPIs volume results and our in channels As seeing we for conversion. look are of both we butts at great seats, in

and We are future sustained business for over growth time. building funnel our

we butts and and to drives. in with the QX quarters. order versus QX driven KPI increased So demand customer a QX versus four funnel drive we and conversion drives frequency like journey. paired to preorder to events in order volume I'd is in the conversion drives at a time future Customer of is currently. aim drive QX average XXX% increase had recent X% QX is We had higher increase we throughout year through thoughtful seats engagement with XXX% in through seats. us Conversion drive butts of Average last to have demo months. to increase primary five rentals, into take some demo appointment post by to those KPIs. review X%

rental funnel, is operated time customer primary conversion to experience, Our conversion, and three order versus sales post was Average to increase months. volume. drive rental revenue. a QX year direct is QX year-over-year. order two is a driven volume. rental preorder by This in and KPI partner XX% customer rental versus XXX% rental increase rental QX at last to was XXX% versus in owned $XX,XXX was QX increase a last in QX business. $XX,XXX year QX

Our with is QX rentals recent to X%. conversion at average XX%

We expand to the Susie's key San Temecula rental press Dark, August for volume and increase We are added targeting recently GoCars markets. release new Mopeds, XX. Diego Wine Sarasota opening into Hawaii After Tours and

locations each balance opposite for in planning season, for engagement to spring also winter. seasonality our and for by on summer are key and markets viable into expanding such fall as We markets

harbor Friday the Palm the Springs in summer winter. and example, in For

seeing already are volume. strong and rental drive We pacing QX exceed to and it results in QX

with markets. new focus plans We to our expand continue drive into to engagement lead on and

the Hi, New focusing and Kevin Officer two, delivery sized forms Arcimoto. our vehicles Chief is right light everybody, local York here delivery delivery provide vehicle to electric City JOCO delivery. program O'Rourke city renting sharing world's initiated on with first to the across platform for the using In rater. first drivers of drivers quarter pilot their sustainable with Commercial we JOCO gig

provide the fleet their adding clients rater is larger focused to to JOCO provide us efficiently local bring capacity Pilot that programs JOCO commercial And in need thus Presentation] has we the delivery market. e-bikes, with city. the a delivery has way within far that operate into them rater to feedback been clients traditionally to delivery like a JOCO information extremely While for helpful vehicle with [Video designed the with on regard. the their using key

in recognize to Dwayne. very just to Chief team take That time. that welcomed to stuff Fritz hello, the here our Key Product add joins Yes, all of people to wanted want hear this team. there. video and heard I He Dwayne He's everybody. wasn't him video stuff. player at makes us Officer away? happy us. some the hope on Lum me also in this incredible good

Sure.

once some the the again, guys way to Q&A we you and that's the of get So pulled want on and platform in section, questions to calls, from top if it. do questions these Say earnings

Say and your utilize on current get are if there. question off. kick Arcimoto Will and register So it to in the help plans EV this Bill what We'll opportunity? so your

want Fritz, answer to you one? that

Sure, sure.

EVs vehicles the wheeled So the the first tax kind but we're there that Inflation is that step as see Better in on at been bill. and many the in to EV and all, the Back this that in Unfortunately, to later and had passing obviously, of they in level. for the just the interest know forward you is, you movement included you were bill, to credit, compromises included originally a order a And solid IRA, know precursor able addressing Act. to two final know, Bill, whole. were of encouraged made one Reduction pass IRA bill was be know, federal shows credits the which of EV Bill you is some of not tax scratch had three industry adoption which the They of we're the

of ours federal So legislators number our wheels you to state vehicles vehicles, said groups to that and on lighter-weight, continue work the know, ultra-efficient, of educate regardless with the advocacy advantage of we right-size them. and like on help lobbying

Fritz thanks, great answer. Awesome,

and What current all FUVs the for is backlog MLMs? order

Lynn, that you you're got one, muted.

Lynn your muted.

I clarify take good this do one. opportunity the a I'll you. Thank it's think funnel to order definition.

few as production a production in someone are that a that are delivery. starts orders months happen our order over will process until the placing There five defined non-refundable So process. steps

encouraged some a pacing form of order in to And order QX. order conversion far thus customers did We XX% by have in end backlog. currently with So we're customers in QX stage delivery. XX our

As far customers refundable or to when deposit. is strong them is placed as ordering a the them, depending have as when on define product a preorders are ordering we defined, available. who leads priority for available state, These

as encouraged product our on And response our we states, listed new of and total a our are states at of positive open QX. Our we X,XXX those announce are end of we website preorders we update highly by MLM recently. had from the announcements

Lynn. you, Thank

the an any on out Does reached agencies large governments fleet update revenue? there potential contracts of Have company sales? driver or used expect? Are Since to can to have vice government by be versa? a Arcimoto, any massive

it that's Kevin like sounds in wheelhouse? your

I think take this right I'll one. you're Yes, definitely

know future are I the all that or can't about any you talk in So contracts necessarily sales works today. that

we're the we that can continue that said However, this increase has deals in on. the currently say working positive engaged build I team to frequency many conversations. And and to the of team those quality

the and why more This Moshevsky], strongest speaking specific market an in mile speak working vertical experience markets, within diligently For is within partner arena. the experience And that is of to restaurant our to so in most XX team of example, Arcimoto. be delivery believe industry our [Dorothy type today. to investors a than sales build rater specific with business to our we industry a of brings that as that that final the who partnerships the most positions going disruptive addition delivery the the solution we're space. Arcimoto, commercial is we recent commercial within expert of And years

Kevin. you, Thank

and question. scaling, a they chain think but be think Terry I will bottlenecks Supply muted, production that's do when just you preventing resolved,

being been the dealt They've go of supply with the dependent chain shortages. been certain the scale that able include quantities suppliers Also, last a parts, have the intermittent The I'll been to have for the in key like delivery on motors, definitely to inverters. problem susceptible. being issues years. have also to here currently one. been related they're chip Yes, the of couple and bottlenecks us shipped susceptible And displays us. take ahead us Thanks, things with

that daily, supply Boardrow, services keep Tim coating with thermoform other parts along required production to team us bringing Chief Materials manufacturing process the on plastic partners keep areas automated of Two we Makes the or solutions solutions. the that focuses And Many the doing of our of body to he's beyond place. of processes been we efficiency Director for way. with really for his areas sense capacity Officer of job vertical out Chad great the is chain this be different engaged panels. two integration capability We put and chain part material fully Tim's specially the supply the in it So of have eye the either Hynen expenditure These is are and of in-house us of the lowest when can in parts, suppliers. has solutions the that working implemented there. an capital a utilize on and automation already flowing. them

Tim. Thanks, So

Terry. thanks, concur I

Our performing profitable? and are rental as centers expected they

expert. Lynn Yeager rental

this I one. will take

So the currently, structures. around and and rental the revenue also between our have customer models sales to we've rental and rental to revenue a few functions and owned set pacing sales. expectations different shared the We've within is both that we utilization restructured side experience growing optimize centers our

operations within and potential. higher lighter rentals OpEx own the objects our shared for are and needed Our profitability the have offset and centers. sales delivery models - And

sales continue centers to growth will on both all to our we revenue and experience rental of and needs. consumer expand support So our types delivery

Lynn. Thanks,

enclosure? full what that development front, some of and kind fast around can development product I with we the on specifically expect or questions aggregated, then And charging product DC

Dwayne?

that handle one. I'll Sure,

market wants desires. to constantly and needs engaged we're and So listening and customers, with the

repetitively To the really a need customer both so on. by but control, those driven key enclosure requirements. in extreme that and as we're heat heard for end, environments, prioritizing we've so recognize And climate cool and is that product we're full our development working priority

things body or know, that systems, we can opportunities. at in new performance address you look like we variations market and Additionally, requirements types so body

charging DC we've directly fleet to In and that feature them. from fast is addition for others heard that, key customers a

open As and AC three charging to both for such, US. combine and AC, we're high DC vehicles single universal phase working Europe for and the speed standards electric phase with

Dwayne. thanks Awesome,

what get more funding? In way exact the will company

Doug?

thank you. Yes,

funding about can't the specific which ongoing, sense, is project the and So talked in is about until been past talk opportunities closed. we've we has

will the to give funding fill finance any shout We externally Arcimoto big work like a ATM to teams, in on meantime. to for legal these using gaps tremendous internally fronts. the been doing We'd and the in and continue out our both they've

healthy like our Me in to about difficult take that a say this this the talk acquaintance. phase aren't, stuff we're in to or have for not, to we're good, or growth words and we're doing important things And is time too, understand a long capital company than All what Tesla it's to that? all about efficiency, we to Ford I different Arcimoto's know, a those so, it's been folks team. understand a like relevant. companies most we you perspective. lot. moment finance, it's smart that very that a I'd great regards companies position for in to because of is talking sets up, according a sometimes think But we're things And

many Too forward startup, too much not of much most traditional conditions. CapEx without deployed, inventory deployed is customers. deployed. not customers, customers. Without CapEx manufacturing killer customers, large companies, many the enough Too deployed to frequent enough enough enough inventory Okay,

going made in have to sales build will a when thinking factory, come many should they're way, have you payroll. billion see times, of their So bunch a $X companies they

that cadence think We've Arcimoto is us reasonable at market by a do. of profitability looking production dictated can so to Okay, we the a of with what gets created number that expenditure isn't some capital.

in is, love is when financing harder to much that what it, or or And out so, moment, place where in a and we get Frohnmayer. reasonable, built I profitability, what doing of making and the production truly hard are the step right it. about the take to cadence work available reasonable really given any level, to is? it talk agreements recently the side, and what I going at I has our at to at to the next that marketplace capital can't say a put pace both believe that ourselves the path the is, is love to to Frohnmayer. here something we us of we side product to is friend we we funding? the have okay. Mark want company, company positioned he use what Arcimoto talking opportunity about culturally to truly best worked I strong this Okay together capital team really all the a a is make at amazing So that the change that has deployment on has, mission where are market Want that sales he Mark that with matters awesome here after

on to for driving years. for doing. a your Steel? Thank I amazing an of today? been great this face. have today team. with. are gets has a in we doing you forward see he can't Officer hope we a a think figure Did direction. great will you much us work our best of on Blue fun improving what create doing steadily off true he's looking we out on mission I call Thank you that, Are one Do it you, the up a right light. I day we this the impression friend XX as sign see after to love. the team, Chief I saw Mark see needed break a return venture all smile hope for things Vision I great Fritz and Mark He's We're to I you shining all inspiration every our with to a you our things the wait

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Thanks everyone.

Thanks, everyone.