Mark Frohnmayer: I originally started our company in 2007 [because I was] looking for an efficient everyday ride. I wanted something electric, something affordable, high quality — and I didn’t want a full size car. When you think about the way that we transport ourselves, almost all the time, it is either alone or with just one other person carrying a relatively small amount of stuff. And so the idea of using 4000 pounds of steel to move, on a good day, 200 pounds of dude around town to get a cup of coffee… it’s crazy, particularly when you multiply it by everybody following that same pattern. And so the Arcimoto quest really began when I saw a small three-wheeled kit vehicle in a parade in 2007. And it was just like, that was the lightbulb moment.

And what the lightbulb illuminated was the giant gap in the market between the bike and the car. On one end, you’ve got these two wheelers that are very lightweight, very, very efficient, fun to operate, but lacking in basic stability, protection from the elements, carrying capacity, all the rest. And then on the other end, you’ve got full size 4000 pound hunks of steel, typically powered by internal combustion. And so that is now where we sit today. There are a number of interesting products that we have aimed at landing somewhere in that gap… But what we did is, we spent about seven years iterating over eight different concepts [to] land on what we think is an ideal platform for for everyday mobility. And what I think what really separates Arcimoto from other options in the space is that the product of that refinement [is] a very flexible platform for daily trips.

So a year ago, we set out on what we thought was a big, hairy, audacious goal, which is to open a mass production facility that would ultimately have the full capacity to produce 50,000 vehicles a year. And we wanted to kick off that new facility by the end of next year.

So we teamed up with a company called Monroe and Associates out of Detroit, a storied engineering firm, that has achieved a lot of notoriety for the reverse engineering work that they’ve done on almost every electric car out there. And we brought them in to help with the planning for getting to scale and driving down cost. Cost is directly related to having a scalable manufacturer. So as you buy more parts at higher volume, you get significant price breaks at each order of magnitude. 

And then the second piece is really all about simplification. So, making sure that every part and every combination of parts that we’re using, is simplified to the absolute maximum, so that we can have fewer parts, fewer things to buy. It makes [the vehicle] lighter weight, it makes it more efficient and ultimately, it makes it a lot lower cost…

We’ve continued to articulate that goal of opening our mass production facility late next year. We actually purchased a facility for that purpose, we closed on that in last quarter. And we actually get the keys to the castle end of this month, assuming that the previous owner is successful in completing their move out on that timeline. And then we’ll have a lot of work to do to upfit that facility… At the same time, we have our present production facility, still outputting vehicles at very low volume [in order to] satisfy our early adopters, some of whom have had pre-orders in the queue for a very long time, and also to really build the market for scale production…

[It’s] all about keeping the overarching goal very front and center, which is to get to scale. And then build out every piece of the business, from the purchase process to financing to the ability to experience vehicles in market. [Getting] all of that groundwork laid so that we can achieve our volume from a sales perspective as well as a build perspective.

Any physical product over the course of the last 18 months has had some greater or lesser giant challenge with the supply chain [due to the pandemic]… Every company that’s a participant is having to re-evaluate and make much more robust that flow of goods and parts. And I’m expecting that choppiness and that challenge will continue for the next 12 to 18 months.

I think the really good news for Arcimoto is one, we’re already in production. We’re delivering vehicles to customers, we’re delivering vehicles into a place where people can experience them… And then second, is that our plans for going to higher volume production actually coincide with the end of that window in time, we hope. But we’re going to have to be very judicious about where we place vehicles in the market today for maximum effect. At the same time, [making] sure that the supply chain for scale is very robust [is a ]non-trivial challenge.

Absolutely, we are in conversations with companies. We have run a pilot with a company called Hyrecar that is specifically about gig drivers doing last mile delivery. We’ve had very positive feedback on the use of the Deliverator for last mile delivery applications. What we’re working on now is really being a good ecosystem partner. And that means making sure that we’ve got the right tools in place for people to use the vehicle that they need when they need them.

I’ve ordered Grubhub and had people show up in minivans dropping off a little bag of food, it’s crazy. So from an operating cost perspective, from a vehicle purchase cost perspective, particularly as we get to scale, we think that the Deliverator has huge advantages in terms of last mile delivery. And right now, it’s just all about making sure that the business model is fully aligned, so that it works with existing restaurants and existing food delivery enterprises, as well as looking to the future of what food delivery will really look like from a business model perspective.

Well, I actually addressed those head on in our March 31 earnings call. And I would refer anybody back to that webinar… I don’t have much more to say on the topic.

We have aimed to be best-in-class in terms of how we talk about our pre-orders and our indications of interest. We have avoided some of the techniques that we’ve seen used out there by other companies, and really, hyping our pre-orders has not actually been a part of our Arcimoto story, period.

Second, when it comes to safety, we take the safety of our customers incredibly seriously. And so there were some allegations in that report regarding how we communicate to our customers about recall issues that were just false.

We articulated a goal of 500 vehicles at our Q1 call and then again in May. We will likely have an update of that on our earnings call on Monday. Vehicle deliveries today are obviously subject to all the stuff we talked about in terms of the supply chain. We’ve forecasted a lot of chop and a relatively flat unit growth curve up until the point where we get to mass production.

But that’s something that’s going to change on a week- by-week basis as a result of things that are, you know, on some level– particularly at the scale that we’re at– a little bit out of our control.  An e​​ight week delay of a container coming out of a port over the ocean can have a substantial effect. So we outlined some very significant top level goals for the year: continue to push to scale, get our mass production facility outfitted, build out our rental model. And deliveries [are] certainly an important component of that.

Someday down the road, we’ll have the full Level 5, perfectly driving autonomous robo-taxi that can go on all the roads at all speeds under all conditions, no matter what sort of weird corner cases come in. We don’t think that that’s actually necessary to derive a huge portion of the value of driverless technology…

The way that I get myself to the grocery store, I wouldn’t want the computer doing it for me. What I would like is for a vehicle to show up when I need it. And ideally, it’s the right vehicle for the job.

So if I need a flatbed, a flatbed shows up. If I need a delivery vehicle, the delivery vehicle shows up. If I need a fun utility vehicle, one of those shows up, I jump in the driver’s seat, I take it where I want to go.

And then I jump out and it goes on and sorts out somebody else’s trip. And so that piece, that  concept is something that we have been chewing on for quite a while. One of our top level goals for this year was a demonstration of that basic technology. And what we showed at our summer showcase just a couple of weeks ago was the first driverless Arcimoto in operation, in partnership with [Faction Technology] down in San Francisco…

If you think about rideshare — Uber (NYSE:UBER), Lyft (NASDAQ:LYFT), taxis — you almost always have two drivers in the vehicle, right? You’re sitting in the backseat getting driven around by another driver… One of the big human cost pieces of [rideshare] is just paying somebody to drive a perfectly capable driver around…

You take out a big chunk of the cost just by letting a driver drive themselves. And then the second piece is, what’s the most efficient, lowest cost, safest way to get to have a vehicle conveniently available for you. And so that’s the part of the nut that we’re chewing on right now.

We’re driving on average about 30 miles a day here in the U.S. I think the median trip is something like five miles.

[But] the thesis of the electric car is it needs to do everything that a car can do. It needs to be able to go 300 plus miles on one charge of gas or electrons. It needs to carry five to seven people in It needs to have ubiquitous long distance charging all over the place. And that’s a [mindset] that creates this giant chicken and egg problem.

When you think of [a vehicle designed] for all of your daily trips, which is a big part of the emissions and driving problem today, you can just charge it from your driveway with a normal 110 outlet… Of course, the other advantage of a small lightweight vehicle is that you actually it’s it’s more efficient, particularly in our case for city driving, than a full size electric car. So you actually go farther on the same number of electrons.

I think some are getting it right, some are getting it wrong… The public market is set up to look at the value of [a company] based on, “what is today’s quarterly revenue” and blah blah blah… [but] it’s a lot harder to really understand what the future potential is…

I think what’s probably being missed in the bear case scenario is one, just the inevitability of that shift, and how rapidly consumer behavior patterns can change when presented with new evidence. You’ve got the IPCC (Intergovernmental Panel for Climate Change) saying, it’s “code red” on the climate guys. These are the most intense words that I’ve seen out of that body. You’ve got 14,000 climate scientists signing on saying there will be unmitigated human suffering, if we don’t act really fast.

That will filter in. And particularly [against] the backdrop of here in Oregon, you’ve got massive forest fires, flooding all over the place. Crazy weather events all over the world. The idea that that’s not going to change how people behave is, I think, a little bit myopic.