Nathan Fillion gets his spaceship, as Arcimoto’s revolutionary EV “Fun Utility Vehicle” wraps up a successful IPO
With just days to go in their Initial Public Stock Offering, we caught up with Arcimoto founder Mark Frohnmayer to talk about the IPO, the future of electric and autonomous vehicles, and how he is trying to revolutionize transportation with a fundamentally more efficient platform.
And also a more fun platform. When TV actor Nathan Fillion (who plays a spaceship captain on Firefly as well as a mystery writer on Castle) spotted the first-generation Arcimoto SRK, he tweeted, ““I think I’ve found my spaceship”. And Business Insider says “It may be the ultimate city vehicle.”
How has the IPO been going?
It’s been going really well, especially as we’re now in the final sprint.
We opened it late August and we’re closing this Friday. We’ve well exceeded the minimum we need to trigger the round, and that’s been picking up the pace in the last several days, and then our underwriter has indicated it is very likely that we’ll achieve enough on the raise to qualify for NASDAQ. Anything north of $10 million for us is a total home run, and it’s looking like we’re going to get there comfortably. We’ll know once we get the final commitments coming in on Thursday and Friday.
We’re going to come through with a significant amount of capital on board to implement the next phase of the venture.
And the next phase is – actually delivering vehicles.
The Captain is going to get his spaceship. At long last.
Is Nathan Fillion getting the first one?
I consider myself customer #0. He’s customer #1.
We are building both his and mine right now in the shop. We expect them to be delivered early in the 4th quarter of this year. I don’t want to pin a date just yet.
I’m not sure you can even legally discuss this, but – are Nathan Fillion or any of your other celebrity backers investing in the IPO?
Some of our celebrity backers have invested in prior rounds [non-public, private offerings]. I can’t say whether any of them are investing in the IPO. Like everyone else, they have until Friday night to decide.
You’ve said that one of your primary goals with Arcimoto is “Moving the needle on environmentally sustainable transportation.”
For me, the numbers that really hit are: 1100 pounds, and 230 MPG equivalent.
One is a measure of embodied energy – how much highly-refined stuff, how much steel and aluminum, battery materials and copper and plastics and all the rest – do we really need to extract from the world to get from point A to point B in reasonable comfort.
And the second is, on an ongoing basis, how much energy are we consuming to get from point A to point B.
Those are, to me, the fundamental measures of a transportation solution. Do you really need 4,000 pounds of steel to get to the grocery store by yourself? Or will a thousand pounds, well designed, actually suffice? at a quarter the weight, at 10 times the efficiency of the fleet average – I look at that as a step in the right direction.
And if you lose less stuff and make it simpler, it costs less. So it’s kind of a win all around. We’re using old-school materials and methods for the vehicle chasis, just using a lot less of them.
We could have gone the other way – used more expensive stuff, more esoteric materials, higher-strength steels – to deliver something like an SUV or an F150 truck. But that’s gonna cost lots more.
And most people are using their F150 to commute 30 miles to work and carry one bag of groceries, not to haul dirt or rocks of cattle.
The pattern since the dawn of automotive has been to buy the “what is your worst-case transportation scenario” and make sure you’ve got that covered. But we live in a world now where there are 300 million passenger vehicles on the road now in the US, one for every man woman and child.
But also vehicle sharing has become ubiquitous. We have Airbnb for staying in someone’s extra room, we’ve got getaround for borrowing somebody’s truck when they’re not using it. We still need the solution for efficiently getting the common case covered.
The common case being: one person driving solo 30 miles per day for their commute.
That’s the big gap as far as we’re concerned.
The video talks about Arcimoto as having some “core innovations” for the SRK.
The biggest innovation is the platform architecture itself – where do you put the heavy things in a three-wheeled electric vehicle in order to make it incredibly efficient and have a stable ride? And we just got the notice of allowance from the patent office on this just last week.
Drilling down, we’ve also designed a unique dual-motor gearbox. In a typical car, you have one motor, and it connects to the wheels using a differential gear. What we’ve done is we’ve actually split the drive train in two. There are two independent gear trains, one for each of the front wheels. And so we have one motor that independently controls each of the front wheels.
So the “differential function” is actually handled in software, in the controller for the two motors. Initially, that uses the angle of the handlebars to give more power to the outside wheel. And eventually – and this will probably be via software update – we’ll have full torque vectoring. We go into this in some detail in the offering circular.
Torque vectoring allows us to offer greater stability control, traction control, and regenerative anti-lock breaks, all within the software of the motor controllers.
We’ve been seeing, particularly with Tesla, a revolution in battery technology. How is that changing the electric vehicle you’ll be bringing to market?
The last decade has seen exponential improvements in the battery since we’ve gotten started. In terms of costs, particularly.
For example, compared to when we built the alpha prototypes of [their current vehicle, the SRK] generation 8 in 2015, we’ve got basically double the power, double the energy storage of what we had. We had 9.6 KWh batteries in 2015, cost was $500 per KWh, and now we’ve got companies like Tesla that are shooting for $100 per KWH and GM is buying at $145 per KWH for the Bolt today.
Those sorts of economics aren’t quite Moore’s law, but they’re significant. And if battery technology stays on this trajectory, there’s not indication that it’s anywhere close to hitting a theoretical maximum, then within the next 5 years we’ll see cost parity between electric and gasoline vehicles.
For us, the goal is to short circuit that process, since we’re building something that is a quarter the weight of a car. Our highest-end model has 1/3 the battery capacity of Tesla’s lowest-end model S. That’s the gap. But we reduce costs by using less of everything, while still being on the cutting edge.
Tesla is making a car. You guys are doing something completely different.
We’re building the world’s first “Fun Utility Vehicle.” The FUV. Which is partly because the 3-wheeled electric motorcycle, which is what it is in a regulatory sense and in a classification sense – there are many different ways to build within that architype. A sedan is a sedan. You’ve got one way to do that. It’s a well-established platform. But there are a lot of different ways to architect a 3-wheeled vehicle. And we’re building our own unique configuration.
So what do we call it? Is it an EV?
It is certainly an electric vehicle. It is a 3-wheeled electric motorcycle. And it is the world’s first Fun Utility Vehicle. It is also the world’s ONLY Fun Utility Vehicle because we trademarked that term.
You’ve focused on what you call the “fundamentally more efficient platform”. How is it more than just a glorified golf cart?
If you want to take “golf cart” to full glory, what’s wrong with that? [laughs]
A golf cart is under-powered, it looks weird, and doesn’t have a very good ride. If you solve all those problems, why not?
We are delivering a vehicle that is in the same weight class as a golf cart. You could drive it on a golf course and not wreck the grass.
But it’ll also do 80 miles and hour.
It carries two people very comfortably, it has a really nice refined ride, it has a 3-point harness and a 2-point harness for both passengers. It’s got a working roll cage.
For us it is all about meeting on the utility threshold for the mass market. A product that actually meets the daily needs of most drivers. And golf carts, and typical motorcycles, don’t do that.
The only vehicles on the road today that have met the utility threshold for American drivers are automobiles. And so the question for us is can we build a motorcycle-class vehicle that still meets the utility threshold of the daily driver.
Because that will allow a lot of people to rethink really how they get around. And “Do I need 4,000 pounds of steel to drive by myself to get a bag of groceries?”
Critics point out that you’ve got limited cargo room, though. Could you carry a set of golf clubs? Or 5 bags of groceries?
We have attachments. Surfboard rack, bike rack. You’ll be able to carry a stack of 2x4s on the surfboard rack. It is actually a very useful daily get-around.
With the backseat folded down, you’ve got 10 cubic feet of storage. Which is a Costco run’s worth of storage. Now, I know some people go grocery shopping together. I tend to do my grocery shopping solo.
In a sense, it’s the ultimate “honey-do” vehicle. You get the “honey-do” list and then you go do it. The SRK gets you there in half the time and it has plenty of storage for groceries, for taking the dog to the dog park, for whatever.
And the other concern folks have is safety. They like having that 4,000 pounds of steel around them in case they get in an accident.
The reality is, you don’t want to get into an accident. Any time.
We took a very close look at motorcycle accident statistics, and the #1 issue is when a car does not SEE the motorcycle and takes a turn in front of it. You’re not going to have that.
It sits up 3 or 4 inches higher than the roof of a typical sedan. That means that YOU can see better, and you can be seen better by other drivers. And it’s got two front headlights. Which means the other driver has better depth perception on where you are and how fast you’re coming. That’s a big problem with motorcycles and scooters.
More than that, you have two front wheels, so your stopping power is significantly improved vs bike. If you try to slam on the brakes on a motorcycle, and you’re going over the handlebars. With the SRK, you slam on the brakes and you have FULL stopping power.
We have a front crumple zone, a roll cage, dual harnesses for both passengers, so you’re not going to get ejected from the vehicle.
You also have incredible maneuverability. You have a vehicle that is very nimble on the road. Having all of those features makes it a radically safer vehicle in its class.
You still don’t want to get in a wreck with a vehicle four times its size, but that’s true of anybody. You don’t want to be in a Tesla sedan hitting a semi-truck, either.
There are those who believe that autonomous vehicles will really change the way we drive over the next ten years, and in fact, most people, particularly in cities, will find themselves not needing to own a car at all. Do you think the Arcimoto SRK could be a game-changer for the autonomous taxi market, particularly in big cities like New York?
Ridesharing services, taxis – 80% of their trips are just one person. In that case, 80% of the fleet of vehicles should be optimized for carrying one person very efficiently from point a to point B. Because then, all of a sudden you can reclaim huge swaths of asphalt for more productive uses.
Autonomous has been on our radar since before the beginning of the company. In a sense we have been building this platform 1) to prove out a new product category, but 2) to provide THE platform that makes sense for 80% of those vehicle trips.
You’ve been talking with Uber?
Uber invited us to participate in their Uber Electric Program in Portland – the first electric vehicle launch that they’ve done with their exchange leasing program. When you think about something like Uber Eats, where you have somebody picking up food at a restaurant, driving across town, and dropping it off at a home – to do that in a car is insane.
When we were trying out the SRK in New York City, we could get across town twice as fast as a car. You can maneuver in ways that cars can’t, you can make lights that cars can’t, you can fit in parking places that cars can’t. So for any small-form package delivery company, SRK makes amazing sense.
We were in New York last week, and met a guy who told us he was developing the first motorcycle ambulance. His medics can get to the scene four times faster than an actual ambulance, because they don’t get stuck in traffic.
Something on a motorcycle platform like the SRK can do that as well.
So there are all those ancillary uses – delivery, police, ambulance – that today are really not well-served by full-size cars.
There’s a common thread to the way people use vehicles. We typically drive them by ourselves, sometimes we have another person along. Typically we have a pretty small amount of stuff. And Arcimoto has been really optimizing for that use case.
Our target market broadly speaking is: Drivers. In the way that drivers actually use cars today.
Do you really see people buying an Arcimoto SRK for their daily use, and then using a rental for the occasional times they’re taking longer trips?
I think for a lot of folks their SRK will start out as an extra vehicle. A toy.
But then when your main car is just sitting there for three weeks straight and you realizing you’re making car payments and insurance and all the rest and you start doing the math, I think in a lot of cases you won’t need to own a full-size car when you can just get one from Zipcar or Enterprise.
You’ve commented that the city of the future could be a garden compared to today’s cities.
If you stand on a busy street in New York, it’s kind of a horrible experience. It’s loud, the smell of automotive fumes is everywhere, the sound of internal combustion engines is everywhere.
Think of what it could be like if all those single-occupant vehicles were off the road. There’s a great photo set that compares a city street packed full of cars, the same street with the same number of people on bicycles, and then buses… image we don’t get all the way down to the bus level of density, but at least we get most of those single-occupant trips down to single-occupant or dual-occupant vehicles. That are driving themselves. That are highly utilized. So you can get rid of most of that parking.
Once most of the vehicles on the road are autonomous, then it opens up the opportunity for more active transportation.
People don’t want to ride bikes in the city because they’re afraid of getting hit by cars. Once that fear is gone, there’s no reason not to ride your bike, or your electric bike, around town. You could use half the road for vehicular transportation. The rest of it could become greenways and trees.
So yeah, there’s no reason not to have our cities become gardens, compared to what they are today.
40% of today’s cities are paved over more dead than a desert. In some of the most verdant lush places on the world. Just so we can move these giant machines around.
It’s the most absurd thing.
This has been a fundamental purpose of Arcimoto from day 1. The challenge has been developing the right product, that actually met the vision. That’s what took us seven years and eight generations of product development. We found that, as we kept adding capabilities to our basic product, it kept getting heavier. We ran it seven generations into a dead-end course, and then we realized we had to do something radically different.
That was: ditching the steering wheel, ditching the pedals, ditching the standard automobile ergonomics, and going with the handlebar controls.
Coming back to the motorcycle base.
Exactly. Returning to the motorcycle roots of the platform.
But in the meantime we had done a ton of work on the drivetrain, on the battery, and on really figuring out the dynamics of the three-wheeled vehicle platform. It wasn’t a wasted effort. But it did take a while.
How have you found people have responded to the more motorcycle feel, rather than the car feel?
We were concerned that people wouldn’t like it. But people LOVE it. It makes it a much more engaging experience. Everything about it became better.
For the IPO, are you offering prospective investors the chance to drive an SRK?
Getting people in the driver’s seat is a really good way to get people to invest in the company or put in a pre-order. Because they love it.
That’s what we were trying to do with the videos [you can see the video at the bottom of this post] – to try to communicate the experience of driving it. When we first went out to shoot videos, it was all about “efficiency and saving the planet.” But every time we put someone in the driver’s seat they’d have this big ol’ grin on their face and saying “This is the most fun thing I’ve ever driven.”
Ars Technica wrote in August “This is still the most fun vehicle we’ve driven all year.” The “Fun Factor” just kept coming back. Which is what led us to the branding of “the Fun Utility Vehicle.” It was just staring us in the face. “Lead with the fun, that’s what everybody says.”
We’re entering the market at a good time. The market as a whole is really waking up to the fact that future of transportation really is electric, it’s autonomous, and it’s efficient. How many more summers of cataclysmic wildfires and storms will it take for us to truly buckle down and get serious about climate change?
From a timing perspective, that really helps. It’s a story people are ready to hear.
Long-term, beyond the current IPO, what do you want to see happening in the coming years?
The production lay-in happens in a few phases. We’re going to be assembling vehicles for delivery, that’s our first step. Then our plan is to bring in sub-component manufacturers and vertically integrate all the custom components that we’ve designed, as a way to increase volume and reduce cost.
Finally, the real big-picture vision, once we’ve really got that part figured out, by late next year, is to really look at franchising the production model. Typically, with vehicles today, the distribution is franchised but the production is centralized. What we want to do is keep distribution within the company but franchise the production all over the world.
Because this is a product that fits markets everywhere. It fits the small streets of Europe and Thailand and China and South American and all the rest.
Ultimately we want to bring local sources of capital, local talent and labor, into solving local problems. And do that globally.
(For more information on Arcimoto and the SRK, check out their website, which lays out all the product details as well as additional videos.)