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Arcimoto, Inc. (NASDAQ:FUV)
Q4 2020 Earnings Call
Mar 31, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Mark Frohnmayer

All right. Good afternoon. Welcome to Arcimoto's 2020 full year and current events webinar. This might run a little bit long.

We have a lot of ground to cover today. Going to start with a recap of 2020 and some current events, layout Arcimoto -- what I would call, Arcimoto's not very secret plan, which I've been talking about now for 13-plus years. But we've got a lot of new folks who have joined in as stakeholders, and so I want to make sure and put it all out there, particularly in light of our recent acquisition of Tilden motor works. In a chart, the 2021 road ahead.

So give some clarity on what our top level goals are for 2021, take investor questions from the say platform, which will be our first time using that platform to let our shareholders put in questions directly. If you didn't have a chance to do so at this time, it's something we plan to keep forward with in subsequent earnings calls, and like we did last time, we're going to bring a panel together of analysts of Arcimoto stock and our executive management team in order to answer sort of round robin style Q&A. There were a number of folks out there who requested a musical portion of the events. I'm sorry to say, my uncle John is traveling today, but he did say that for our Q1 earnings call, he's got some special in store.

But first, guys, if you would like to support the brand and enjoy some fine, fine outerwear, I'd like to direct you to the shop arcimoto.com store. You can find hats, socks, shirts and a variety of other items. One thing that you won't find are shorts, which brings me to something I want to address right up, which is we Arcimoto has been received from a number of our stakeholders, concerned messages about a recent short seller report by the ironically named Benitas Research Company. And I want to address sort of heads up, straight up the elements of this report and then put it into a little bit of context.

So the report carries very serious allegations about the company's practice, and I want to say straight up, it is a report that is chock-full of falsehoods and misrepresentations. Starting with the very first one, the ledgers that the company has faked preorders in order to fake demand. This is laughably false. We consider Arcimoto's practices regarding preorders -- now to be clear, Arcimoto has accumulated something getting near 5,000 net preorders in the course of its existence.

We consider our practice regarding preorders to be best-in-class for the industry. We have never considered email sign-ups to be preorders, for example. We have seen other companies go out there in the vehicle space, collect tens of thousands of email sign-ups and then claim that they had tens of thousands of preorders. We have not done that.

We have seen companies build preorder books based on nonbinding letters of interest alone collecting tens to hundreds of thousands of indications of interest. Arcimoto has not done that. To date, our preorder numbers do not include at all any nonbinding letters of interest, although we do reserve the right to go look for nonbinding letters of interest from potential fleet customers as indications of market demand. And going back to our IPO, we have always characterized preorders as strong sales leads.

When an individual customer cracks open the wallet, puts down $100 fully refundable at any time for any reason, we consider that a strong sales lead, not a booked sale, and we have never characterized them as such. The report goes on to allege that Arcimoto has deliberately hit our relationship with one of our key early investors, who also is our first franchisee for rentals in Key West. And again, this is a gross distortion. Arcimoto has been clear about our relationship with FOD capital.

It sends our disclosure of their investment in Arcimoto in 2018. And the idea that this franchise is a 2018 scheme to pump and dump in 2020, we think, is utterly absurd. And the report went on to make what we think is a gray accusation that Arcimoto has failed its obligation to report its recalls through NHTSA, to its customers. Again, this is totally false.

They made mention of one of our customers, GoCar Tours down in San Francisco that they had contacted GoCar Tours and GoCar, had said that we had not notified them of recalls. So I'm just going to quote what Nathan, the CEO of GoCar said, he said, "I was never contacted. And as far as I'm aware, no one in the company has been contacted by anyone regarding recalls on any of our vehicles, certainly not anyone who has any relevant knowledge on the matter. Further, we would never share that kind of information with an unknown third party.

We suspect this was a fabrication. We are in frequent communication with Arcimoto and have been notified of all recalls. We have preordered 40 Arcimoto vehicles, and we have so far converted two of those preorders into final sales. Like many businesses in San Francisco, we were forced to close during the pandemic and the timing wasn't ideal to move forward with the purchase of 38 new tourist rentals at one time.

Arcimoto is a valuable partner, and we look forward to adding more FUVs to our fleet when the time is right." So the question, I want to let our investors know about because again, a number of you have written to us and asked about the allegations in this report. And then, of course, the follow-ons from legal firms who posted repeated press releases on our ticker. And to understand that we believe that this report and the other five short seller hit pieces that have come out about Arcimoto since our last earnings call, are an effort to deliberately mislead investors, cause investor lack of confidence in Arcimoto's stock and depress Arcimoto's stock price in order to profit. This is something that is known.

It's sort of a dark secret of this particular market that we're in, scheme called short and distort. And so at this point, all we're really recommending is that our investors familiarize themselves with short and distort schemes. And to understand through the context, so what we noticed since our last earnings call, and really all throughout 2020, Arcimoto has seen a tremendous appreciation in the value of its stock, particularly after the November call, and we started to notice in public filings on NASDAQ, an accumulation of significant short interest in the company. And as that short interest increased, we saw an increasing volume in these so-called hit pieces.

So we think this is a transparent attempt to manipulate Arcimoto stock, shake confidence in the company. And to those of you out there who are attempting to manipulate Arcimoto's stock with hit pieces in order to profit, we believe that you are barking up the wrong tree. And so as one of the reasons why I am happy that we have a new merch item available in our merch store as of just yesterday, our Go Long Johns. They're great for those that's cold long runs and perfect for covering your shorts.

So let's get back to it. Again, going to recap 2020 and current events, articulate Arcimoto not-so-secret master plan, get into our 2021 road ahead and then dive into questions. So what did we do in 2020? Despite production shutdowns actually in every quarter of the year, major supply chain challenges as all of our suppliers were going through the same pandemic, Arcimoto managed to deliver 97 vehicles to customers, which was a 110% increase year over year. We also introduced new products.

We launched pilots of the Deliverator and the Rapid Responder, our solutions for last-mile delivery and emergency services. As we get toward the tail end, I'm going to talk about some of the feedback that we've gotten from those pilots. We introduced the Cameo, which is actually a vehicle that we use for our on-road filming. I'm pleased to report that the Cameo is now through our certification testing process, which also has implications on another product that I'm going to talk about.

And then finally, we introduced the Roadster, which is our pure on-road fund machine. We're targeting production launch of the Roadster in the first half of this year, and we had a chance to show it off for the very first time publicly down in Daytona at Bike Week, and I'm going to talk about that again at the end of the presentation. We launched key pilot programs with early adopters of the Deliverator in particular. And again, we build out a handful of Deliverator to date.

We're increasing the production rate of Deliverators for fleet demonstration that throughout this year. But we had early pilots with a group called carry it forward here in Eugene, delivering COVID relief supplies to the unhoused. We have gig delivery drivers with our partner, Hire Car, doing deliveries in Deliverator, got a lot of great feedback from them. Walberg Key West, a new Walburg franchise, bought a Deliverator as a sort of a mobile branding platform.

We launched a pilot with the city of Orlando, and we've gotten some great feedback from them as well as our pilot project with Eugene Springfield's fire department with the Rapid Responder. We teamed with DHL, global logistics giant for the efficient delivery of our products. This was a major win because it gives us a very consistent platform for getting vehicles out initially to the Lower 48 as we begin to open more and more states, and ultimately, we see them as a viable partner for international shipping as well. We teamed up with Munro & Associates.

And we made the call in about the middle of last year that we see the market potential for this product family to be a mass market solution. We teamed with Munro and their team in order to get to scale production. This is their bread and butter, and it gives us great confidence as we look at the next steps. I'm going to have a little bit more detail on the team up with Munro later in the presentation, but this was a major win for Arcimoto, and it has continued to bear fruit ever since.

We announced the opening of our very first market outside of the West Coast, our first East Coast beachhead, if you will, with the opening of Florida, and we have now delivered vehicles into Florida this quarter. We entered into a purchase agreement for a new facility that we believe will be capable at maximum capacity of producing 50,000 vehicles per year. And we've now gone through the first step of due diligence on that facility, the kind of the early planning work in terms of materials movement and logistics, and we are expecting to close that transaction next month. We made our first corporate acquisition with the purchase of motor works in order to bring both their existing product line, as well as technology that we believe will be foundational to Arcimoto's second platform, which is squarely focused at micro mobility.

And by the numbers, I think it's hard to understate what a transformational year 2020 was. On the revenue side, we more than doubled. Our cash position went from being a real challenge to being well funded for our next steps. We've eliminated all of our corporate debt in terms of our senior secured and convertible notes.

The only debt that we carry today, we've got a little bit that's a PPP loan that's going to be forgiven, we believe, and then some insurance and equipment financing. And then finally, we did everything we could to help preserve the health and safety of our team through a global pandemic. Our team is our lifeblood, and we're proud of the fact that at Arcimoto, we had only a single confirmed case of COVID that was asymptomatic that we were able to detect using advanced surface testing techniques developed actually by one of our peer start-up companies here in Eugene. And this is, the health of our team and the relationships we have with the people we work with are truly paramount, particularly as we look to go to scale.

So that's the short review. The next, I'd like to really talk about kind of the big picture of Arcimoto, and why Arcimoto exists, and where we're going and really lay out what's the 10-year game plan for the company. Starting with what is Arcimoto as a name? Arcimoto, arc, it means architype or the arc of the future, I moto means drive. So the Arcimoto brand means Future I Drive.

It's the brand identity for the next-generation of drivers. And what we are fundamentally doing is mining the gap between the bike and the car. We see this space as being the real growth opportunity for vehicles over the course of the next decade. If you just sort of think about what the disconnect between the car and what we actually use cars for.

So cars are these giant machines, capable of carrying five to seven people, hundreds of miles at a time, and yet, we typically use them by ourselves or with just one other person. So I'm going to get to the final why at the end of this, but what I also wanted to say right out front, this is a question I've gotten asked multiple times, which is, what is Arcimoto's durable competitive advantage? And I think, to me, it is summarized in mission, values and culture. The challenge of getting a vehicle company on the road into scale is enormous. And so that what we have that is durable is our adherence to our mission to catalyze the shift to a sustainable transportation system, the values by which we measure our decisions, continuous improvement, aiming for the utmost in environmental efficiency and making sure we've got a lot of fun on the road.

I'm going to pause for just one second because someone is knocking on my door. I should also add that this is the final earnings call from my living room. So the barking dogs and the unintended knocks will be a thing of the past from May going forward. To think about just the Arcimoto from an economic product lens is really disruption theory 101.

Arcimoto is building a canonical disruptor. A disruptor is a product or service that meets the utility threshold of a market and does so at a much lower cost. And that is the goal from an economic standpoint, that is the goal of building a platform that is a fraction of the weight of a car, the fraction of the battery capacity of a full-size electric card so that we can ultimately deliver on a product hits a price point that is a mass market price point. Ultimately, what we're shooting for at very large-scale is something in the realm of $10,000 for an everyday capable electric vehicle hitting the wide swath of the marketplace.

One of our analysts calls this multiple shots on goal, and we now think of this as really many shots on goal. That is a single vehicle platform, low center of gravity, dual motor front-wheel drive that is capable of solving a wide range of everyday trips. Something like, what I call, the 80% niche. So today, we've introduced the Fun Utility Vehicle, Deliverator, Rapid Responder, Cameo, Roadster.

What you see there in the lower right corner is our first iteration of a flatbed version of the Arcimoto. That's actually feedback that came directly out of our Orlando pilot. And the ultimate endgame of our first platform is something that we have talked about for a long time, which is what we call Personal Mass Transit. So a lightweight, ultra-efficient platform that is you can summon from the touch of a button, most efficient, most convenient, most fun, most affordable form of transit.

This is about transportation equity. It's also about environmental efficiency and really rethink of our urban fabric. We are targeting a three-year time horizon to demonstrate this platform one end game in a meaningful way. So that's platform number one.

Platform number two is what we're calling now our Arcimoto Tilt division. And I should say, at the outset that ultra-light electric vehicles are absolutely core to the Arcimoto mission. That is the micro mobility scooter, bicycle, low-end motorcycle type of vehicle, that is, again, an order of magnitude more efficient. This is why we acquired tilting motor works.

And this begins a multiproduct strategy, and that we will just begin to touch in on in 2021 and continue as we look to the global marketplace. So if you think of the Arcimoto platform one is to the -- Arcimoto platform one is to -- Arcimoto platform two is to Arcimoto platform one, what Arcimoto platform one is to the electric car. It's that next order of magnitude of improvement in efficiency, weight, cost and again, designed to really go after and really understand the core usage pattern of vehicles on the road. We are incredibly excited about what that product family is going to represent, and we're going to have a lot more to share about it later.

And so sort of the big picture, why of Arcimoto, is that we don't get to where we need to go, if all we do is electrify old ideas that it is going to take a fundamentally next level of materials reduction of utilization efficiency to get to the carbon reduction that we must get to as a culture, if we are going to avoid the worst effects of climate change. So my data always said, face the danger and roll away from it. I think that's a piece of it. I think the other part is that we are rolling toward an opportunity of a fundamentally reconsidered city, parking lots to parks, a more livable world for all of us.

That is why we do this day in and day out, and that's ultimately what 2021 is all about, is laying the foundation for this next decade, which is to say, we are going to be demonstrating sort of all of the pieces of the overall Arcimoto business model and plan in order to really provide the basis for Arcimoto's growth over the course of the coming years. I'm going to run through a few of our top level goals before showing a couple of short videos, and then we're going to dive into the Q&A. So first one, articulate the full Arcimoto product family. We've done pieces of this.

We've got a few more on the way that we will be refining to show really what sort of the breadth of opportunity that our first platform represents. We'll be introducing our first platform two product. So stay tuned on this. This is something that I personally am incredibly excited about that the SkunkWorks team that's developing it is incredibly excited about, and we will have a lot to say about that going forward.

We're going to demonstrate our shared Arcimoto business models. So we think that the Arcimotos are fantastic vehicles for individual consumers. We also think that Arcimoto has a place to play in rideshare, in fleets and so on, and that's something that we intend to show this year. We also plan to demonstrate our first autonomous Arcimoto.

And this is, again, we have developed the platform from day one with the idea of autonomy in mind. We believe that, that technology has matured enough and that the time horizon is close enough from when it can be meaningfully deployed that now is the time in partnership to show that. We plan to open experience rental centers in key destinations. So this is something that we talked about for at least the last couple of years that was curtailed almost entirely by the onset of the pandemic.

As we come out of the pandemic as vacation travel resumes and as our [inaudible] team is able to travel, this is something that we expect to make great headway on in the near future as we open additional states for sales and service. So Arcimoto is presently only selling vehicles into four states. We are going to add additional states to our sales and service capabilities over the course of this year, ultimately aiming to make sure that we've got really good coverage for the bulk of our preorder customers by the end of 2021. We aim to acquire the scale production financing that is going to be necessary to build at a much higher scale.

We have entered into significant dialogue with the Department of Energy. We've been working furiously on our application for the advanced technology vehicle manufacturing loan program, and we expect its submission very shortly after the conclusion of this quarter. We plan to expand our campus to achieve scale production. As I mentioned earlier in the call, we've now gone through that first stage of due diligence, primarily for the purpose of planning, transportation, materials movement and logistics on and off the site.

We're anticipating closing that transaction next month. We will have some initial production work happening in that facility, we believe, in 2021 with the spin up of our automated plastics manufacturer. And we're presently targeting October of 2022 as our start-up production for what we're considering the mass production version of the platform. And if you'll recall, in our earnings call in summer of last year, this was August, we set a big harry goal of getting started production within 24 months.

We're now tracking about a month behind that original big goal. And again, as we get closer and closer to SOP, we'll have continued refinements of what that schedule looks like and the meaningful accomplishments that we've made along the way. And what we're ultimately doing with this factory is prototyping scale replication. So the idea with our, what we're calling the ramp, is that we are going to be demonstrating higher volume production that we can replicate into other market regions as a production operation that we are figuring out in partnership with a fantastic team, how to produce our vehicle platforms at scale, and then how do we bring those platforms into market into production in various other markets all around the world.

So finally, our goal from a production side, is to substantially increase our year-over-year production from 2020. We are targeting the production and delivery to customers of more than 500 vehicles this year. The big supply chain stoppages that we talked about last quarter are easing, but we expect knock on pandemic glitches at least through the end of this year. And so even considering those, we think that 500 is a target that we can hit.

We are also aiming on the production side for a smoothly flowing river which is to say that we've had a lot of that. Even into this quarter, a lot of the sort of accordion effect all the way from sales through production, materials, delivery and so on. And so really for 2021, getting a smoothly flowing river from the sales process all the way through to final customer delivery is a huge priority because that really sets the stage for much higher volume delivery in 2022 and beyond. And then in addition to vehicles that we build for customers, we plan to deploy additional vehicles for shared fleets and for pilot deployments, that will again help build that queue for mass production sales.

As I mentioned on the call last quarter, we were targeting by the end of Q1, which is today, to demonstrate four units per day of production. Today, it is the day that the production team was slated to do that four in four out of four vehicles beginning on the line four coming off of the end. And we will hear from Terry later this afternoon on whether we expect that we are going to achieve that goal. Finally, the plan is to continue to refine our products through pilot feedback and get a lot more butts in seats.

We have our on-road marketing activities have been essentially completely curtailed for almost the entirety of the last year. We did our very first sort of on-road marketing. We had a couple of our team members able to get vaccinated early and send them out to Daytona for bike week with the Roadster. We have a short video clip here in a second that describes that experience.

But what we found in addition to experiencing the vehicle online, for the Arcimoto sales process to flow smoothly, potential customers need to be able to actually experience the vehicle for themselves. It's a critical part of any electric vehicle story, but particularly, when we consider the feedback that we get from prospective customers once they've had a chance to try it, we think it's a critically important part of the Arcimoto story as well. So one of the very first pilot studies that we did was with the Eugene Springfield fire department. And I just wanted to share a little bit of the feedback that came from Chris Happel, who is the fire chief, and one of the questions we asked him was, things like how satisfied were you with your experience, that was a nine out of 10.

To be the ideal vehicle for your desired use case, what improvements can we make to it? And what they said is, if they had a cargo version, it would be more in line with their present needs. And that they would be unlikely to purchase it in its current form, but would be likely to purchase it with the cargo version. And so that is what prompted us to develop something we're kind of tentatively calling the Rapid Deliverator, which is emerging of the Rapid Responder and the Deliverator. And based on that, he says, he's nine out of 10, likely to recommend the Rapid Responder to other fire departments and departments within the cities, loves the attention that it gets.

And really, the only piece of feedback that I think should be obvious is that he said, our ability to deploy the unit during COVID was extremely limited. Our intent was to use it at special events, sport games, marathon, trials and so on. And that just hasn't happened because those events have all been pushed back. So again, as we look on our pilot deployments and Orlando is another great experiment in terms of the feedback we got and what that is doing to the development of the product, and we'll have more to share on that front in the coming weeks, we think.

So that's sort of the big picture story of where we are now, what our goals are for 2021. Fundamentally, we are building the foundation for the next major chapter of Arcimoto's growth. The team is very excited about these next steps. And I'm just going to leave off with a couple of quick videos.

One is more focused on the feedback that we're getting on the delivery vehicle and then the other is our piece from Daytona. So with that, here we go.[Commercial break]

To Mike's point there, that is, we've obviously been -- as with just about everybody had a real challenge of having direct customer relations over the course of the last year, we expect that now that our team is eligible, as of Monday, for vaccinations here in Oregon that we will be able to get our away team vaccinated and back out on the road in relatively short order. And so the final clip, I'm going to play before we jump into questions. This is, again, this is our very first on-road marketing tour in more than a year in terms of putting actual potential customers into the driver's seat for feedback. This is our experience at Daytona Bike Week.[Commercial break]

And with that, again, we see as we look at the path ahead, we think there are a number of pieces that we need to put into play, obviously, to really scale this business to make sure that we've got the customer pipeline that's going to be able to fill our production queue. But we take our early indicators of market traction, both from people who've put down a little bit of cash sight unseen to the very consistent responses that we get from people who try Arcimoto products as very good indicators of the future potential of the product, the platform and ultimately, our ability to succeed in the mission that we've been cranking away at for now more than a decade. So with that, I'm going to invite the executive team to unhide themselves. And we'll jump into some of the questions from Say, and then transition over into the -- let's see if we've got this, put this into your gallery view.

So I think it looks like we've lost Doug Campoli. He's been up since six in the morning yesterday, furiously getting this earnings release out. So we're going to rely on the rest of our management team, Eric Fritz, chief marketing officer; Jesse Fittipaldi, chief strategy officer; and Terry Becker, chief operating officer; to run through the Q&A. And Fritz, do you want to be the sort of the reader of the questions here from the wilds?

Eric Fritz -- Chief Marketing Officer

I would love to. Let's start by going over to Say. All right. So you touched briefly on the ATVM loan, please provide an update on status of the ATVM loan program application.

If not so yet, please provide an expected data solution. Also comment on how long these loan applications typically take to receive their response?

Mark Frohnmayer

Great question. So in terms of where we are, we are in the final push on polishing of that document for submission. I think the submission is imminent potentially even before the end of this week. So watch for that among our filings.

When that goes in, that will have likely a little bit more detail about the full contents. And there are a number of pieces that go into that. One is, obviously, all the due diligence that we did on the new factory, the progression of the planning work with Munro for the actual production, the mass production version of the vehicle. In terms of how long it takes to actually get funds dispersed, we've heard from the DoE, it could be six months.

It could be a year. What the really important marker there is, when they determine that our application is "substantially complete" because that's the point at which we can begin to accrue costs to the loan that would then ultimately be repaid out of the proceeds of the loan grant. So that is a timeframe that is likely to be much sooner than either the six or 12-month time horizon. But what we're doing is, it's going to be basically a whole lot of work to get all the planning done and the research done and then really push go and make sure that we're in very tight communication to move through that process.

Next?

Eric Fritz -- Chief Marketing Officer

Mike, congratulations on a new building purchase. How long is it going to take to retrofit the new building for full utilization of full manufacturing buildout.

Mark Frohnmayer

So as I mentioned, we're targeting a start of production of the mass production version in Q4 of 2022. That is our present target. Jesse, do you want to offer any additional color sort of on how you see? Jesse has been really spearheading the initial site due diligence and some of the construction planning for the new factory. Do you want to share maybe a little bit about how that's going to roll out?

Jesse Fittipaldi -- Chief Strategy Officer

Hey, everybody. Thanks, Mark. Before I answer that question, I'd like to comment how awesome, I think, the chat is in the positive aspirations going on over there. It's been fun to watch.

And it's been great listening to you, Mark, telling the successes of last year and what our goals are for this year. I think it's been a great journey, and there is a bunch of people that are making this happen. One of those groups is the Rockstar consulting team that we put together to do the due diligence on the factory site in short order. And the mission was to validate whether or not we can do what we need to do on that site from a city's perspective, zoning occupancy, environmental, all those things look good.

And then from a manufacturing standpoint, can we meet the goals that we have set up for, and is that site capable of doing it. It looks great. And the mission is to start once we have acquired the site, immediately start working on the logistics, and how we're going to solve moving stuff in and off the property. And I think we're going to see some pretty major headway in the beginning of next year where that place is looking good and ready to start putting equipment in for production.

Mark Frohnmayer

All right.

Eric Fritz -- Chief Marketing Officer

Great. Jesse, what is the bottleneck of production at the current facility? When do you see that being resolved? What's the projected run rate by the end of 2021?

Mark Frohnmayer

So I mean, Terry, do you want to address this? I mean, I think I would say sort of supply chain, supply chain, supply chain at the moment. But I'll let you.

Terry Becker -- Chief Operating Officer

Sure. I'll jump right in there. Thank you. Thank you for the great questions.

This is good. As a lot of you might anticipate, the answer to the question of what's the bottleneck is just that. It's the bottleneck of getting supply chains to flow like the river that they need to flow to feed our factory. It turns out that building an assembly line in a factory to assemble the vehicles is not the biggest challenge by any means.

The bigger challenge is to have all of those factories that build components and parts and pieces that have to get on boats and trucks and trains and come to your factory and then get fed to the line. That is the biggest challenge. I don't want to overplay the pandemic card at all here because we take these challenges, and we tackle them and we solve them. But it is kind of true that this year has been challenging.

The last year has been challenging because of some of that. Going forward, we have means to mitigate those things and unstick those bottlenecks. And I'll go ahead and just jump in there and about the run rate that Mark alluded to earlier. We did a test.

We did a test today actually just to make sure that we're getting ready on our run rate in the assembly line, 13 station assembly line that builds an FUV from station one to the end of the line. We very intentionally did this test a few weeks before we intend to go to the next incremental jump, which is to four vehicles per day. That's one vehicle popping off the end of the line every 135 minutes. So it's not [inaudible].

And here, again, the key is not putting them together so much, but be sure that the river is flowing toward that. We successfully achieved the assembly of four vehicles per day quite handily. My manufacturing team and materials team, they are stellar. When the parts are there, it flows.

So I'd really like to give a shout out to them. They are ready to go to that step when we pull that trigger here in the next few weeks. And then by the end of the year, I think I heard that question as well, is we intend to jump up again from the four to at least five per day. And as sales pick up and the demand is there, we will be able to go to second shifts and double that quite handily.

So we're ready for it. And to answer that question, though, what's the bottleneck and the unknown, that would be the supply chain.

Mark Frohnmayer

We'll take a couple more from Say and then let the Wall Street hear us get their moment.

Eric Fritz -- Chief Marketing Officer

Sure. I had a few that got voted. I'll kind of consolidate his three questions. Two of them were regarding technology.

Specifically, any thoughts on partnering with Tesla for supercharger technology. What is our plan for autonomy? And then his third question was regarding a previous slide that we've shown that showed the global expansion and can we shed any light on our strategy for international development?

Mark Frohnmayer

Definitely. So I'll take on these three as it relates to partnerships with Tesla. On technology, we we've not talked publicly about anything along those lines. It's obviously something that we would be interested in they have the leading charging network.

They've got a great charging adapter. They've got amazing battery cells. They've got amazing autonomy technology. And all of those could be significant additions to the Arcimoto platform.

So it's a conversation where certainly would have interest in engaging it. When it comes to Arcimoto's strategy related to autonomy in particular, we have planned the Arcimoto platform to be an autonomous foundation for mobility. And so the work that we are doing, our focus area is on the vehicle platform itself, having a very lightweight, ultra-efficient vehicle platform that can be driven by wired. And the next piece of that, obviously, is the sensor and software stack that actually lets drive on the road or in particular areas.

And for that, we're actually looking to a number of different potential partners out there in the ecosystem where that is their core focus. There are actually quite nearly dozens of different folks taking, in some cases, very different approaches to autonomous piloting of vehicles. And we think that the Arcimoto platform will provide an ideal platform for those ventures that are looking for the right pathway for autonomy into the marketplace. One other thing I'd like to add there is just that we think we have a new twist on autonomous vehicle sharing that is going to bring the potential for the deployment of shared autonomous vehicles into a much closer term than if we needed to have a full level five all the time robo-taxi type approach.

And as I mentioned earlier, we intend to demonstrate this year, our first autonomous Arcimoto vehicle. And at that point, I think we'll have a lot more to share about our vision for autonomous vehicle sharing. And then the final question was related to international expansion. As you might have noticed, today, I was actually the starting day of Dilip Sunderam, who's our new chief international business officer.

Dilip comes to us from Mahindra, where he led multiple projects opened up the U.S. office or the Korea office, and we are very excited to have him on the team. And particularly, as you look at not just Arcimoto's platform one, but our second platform that is targeted at, again, an even lower sort of lower cost portion of the market, we think that will have applicability truly globally. And so that's going to be, I think, a piece of the overall story as we get through to the mass production version.

We are designing it with international regulatory compliance in mind, and we think that we'll have a fantastic second platform that will have truly global reach. So stay tuned on all of those fronts. And I think, Fritz, with that, I'd love it if our panelists could hit their cameras on, and let's do some round robin. I said, we'd go a little long.

Let's plan on going until 15 past the hour, if that works for folks, so you can each get a couple of few questions in. I see hands raised. Michael, you've had your hand raised for the last 45 minutes. So let's go to you first.

Mike Shlisky -- Colliers Securities -- Analyst

That sounds about right. Thank you Mark. Can you hear me OK?

Mark Frohnmayer

Yes, loud and clear.

Mike Shlisky -- Colliers Securities -- Analyst

All right. Great. I want to maybe first ask about a little bit more detail about the marketing outreach for your products.

Mark Frohnmayer

And by the way, if you wouldn't mind introducing yourself first. I think that would be great.

Mike Shlisky -- Colliers Securities -- Analyst

Good point. We have the logo here. Mike Shlisky of Colliers Securities. I'm on the analyst covering Arcimoto.

It's been a little bit over a year now, right, Mark? One and a half years, maybe. So again, thanks for all the answers along the way, hopefully, today as well. So I wanted to start off asking about the marketing plan for your products going forward. You had mentioned there is going to be some kind of road team or team it goes from place to place.

I guess two things, are there any fixed marketing points you've got planned besides a rental fleet where it's just one activity? And secondly, do you have to market the Roadster differently than the other products? And is there any additional cost there to kind of get more matched channel marketing?

Mark Frohnmayer

Great questions. I think I'm going to take a little bit of this, and then, Fritz, if you want to add some more color on it, that would be great. So we've got a multifaceted approach to market development that starts with learning about the brand through online videos. We've made video sort of core competency of the venture because that's we found the absent actually driving the vehicle.

That's the closest we can get to showing you what it's really all about. The experience rental is another really key component of that. So targeting destinations where people can rent the vehicle for a half a day or a day or in the case of rideshare, maybe just for 20 or 30 minutes. And in order to get an experience of the vehicle in a way that is, for us, long term, we think going to be a revenue generator rather than a perpetual cost sync.

And then on the fleet side, our goal is to get particularly for the next 18 months, is not to sell vehicles to delivery-type fleets, but rather get what is now a very limited number of delivery-focused vehicles into the hands of key potential fleet adopters that can try the vehicles for two weeks to two months in order to first give us feedback about what works and what doesn't so that we can feed that into the development of the mass production version of the Deliverator. And then second, begin to collect letters of interest for more substantial fleet purchases that give us additional confidence in the market tractability of those products. First, did I leave anything out on the Roadster side? We had a fantastic feedback from our trip to Daytona, I mean this is bikers who love big loud gas burning bikes. And I think our team out there was pleasantly, even potentially a little surprised at just how positive the reaction was.

But Fritz, have you got anything more to throw on there would be great.

Eric Fritz -- Chief Marketing Officer

Sure. Michael, you were asking about difference in marketing those two products, and there we will be targeting different segments and a slightly different strategy just based on the regulatory requirements around the two different vehicles: One is most clearly in motorcycle, one kind of straddles the line between motorcycle and some states have an on a cycle definition and kind of straddles the line between motorcycle and cars. So there are certainly considerations that we're thinking about, both on the marketing side and the regulatory side there.

Mike Shlisky -- Colliers Securities -- Analyst

Right. OK. Great. Can I ask secondly about your cash burn? You've seen plenty of cash.

Thanks to some recent activity in the capital markets. I'm just curious if you can give us any kind of quarterly or monthly feel for how you might go through that going forward.

Mark Frohnmayer

I think we'll have more to talk about. I mean, we've maintained a pretty steady cash burn. Actually, maybe a little bit of a decline in that in 2020. I'm obviously expecting that to go up.

I think we'll have a little bit more clarity to communicate on that front at our Q1 call. But I would say that Arcimoto has, I think, made a point of being incredibly efficient with cash. We spent a grand total of $42 million from the napkin sketch to first production vehicles off the line. I think it was in terms of generating return on value for shareholders.

It's been a pretty extraordinary ride. And that's a discipline that we intend to keep as much as we possibly can as we go to scale, that is that in the event that we dilute shareholders minimally in order to increased value. The goal is always to increase the size of the pie way ahead of the shrinking of the slices.

Mike Shlisky -- Colliers Securities -- Analyst

Got it, Mark. And maybe my last question for you here is on the gross margin and EBITDA breakeven outlook. You work with [inaudible] associates for quite some time now. You've got a new facility coming soon.

But the current AMP, where you can update us on whether you've pulled down the volumes that you need to get to breakeven on the gross margin or EBITDA wise?

Mark Frohnmayer

I think we made a decision last year that we were going to go for a much higher scale. And we said, OK, we're just going to stick with the current AMP and push maximum production capacity out of that. That would have been a substantial undertaking just to ramp up our sort of the way that we presently build vehicles, and we saw the potential to achieve positive cash flows in the end of 2021 kind of a timeframe. I don't think that, that is going to be the case with the addition of the plan for the ramp.

I think now we're looking at basically, we'll be sort of well into our first production year out of the ramp at the earliest before we would see things start to flip positive. And again, I mean I would just anticipate that Arcimoto is going to be growth focused for the foreseeable future. All right. I think the second one was from Amit.

If you wouldn't mind turning on to cam and introducing yourself, if that's --

Amit Dayal -- H.C. Wainwright -- Analyst

Can you see me?

Mark Frohnmayer

Yes. Yes.

Amit Dayal -- H.C. Wainwright -- Analyst

All right. Thank you. So with respect to sort of the preorder book or the sales leads, however you want to define that, is there an opportunity to start taking advantage of that list and using the balance sheet that we have to maybe deliver orders to or vehicles to folks who have shown that level of interest?

Mark Frohnmayer

Yes. And Amit, if you wouldn't mind introducing yourself real quick.

Amit Dayal -- H.C. Wainwright -- Analyst

I'm with H.C. Wainwright. I've been covering Arcimoto for a couple of years now.

Mark Frohnmayer

And so if I understand your question correctly, you're saying with our indications of what we call our preorders or our strong sales leads, is there an opportunity I mean we're definitely looking to deliver vehicles particularly some of the folks out there, some of you have been waiting a very long time for your Arcimotos. And that's a piece of that is, there's been really two pieces of that: One is the major scale push that we're doing that has the knock-on effect of substantial cost reduction, and then the other is making sure that we open new state markets as quickly as we reasonably can. Those efforts have been a significant challenge, particularly during the pandemic, but we expect that, again, as we sort of hopefully begin to come out of COVID that we will be able to both expand our geographic reach to hit a much wider piece of our preorder book and then, again, the real big push, and this is the overarching push for the venture is get to scale. And that's consuming, obviously, the bulk of our attention over the course of '21, even as we are demonstrating the breadth of the venture and what we're planning to do for the next decade.

Amit Dayal -- H.C. Wainwright -- Analyst

Mark, can you remind us which states we are certified for currently?

Mark Frohnmayer

Well, so the vehicle is certified on the road, it's for all 50 states. But in terms of where we are presently selling, and this really has mostly to do with making sure that we have that we have service in place for our early customers and this has been, again, a substantial challenge throughout this last year. We have had certain circumstances where customers have had to wait far too long to get their vehicles repaired or to get warranty work done. And so we want to make sure that our customers have the best possible experience with the Arcimoto product, and that really has a lot to do with not just how awesome it is on the road, but the care and feeding of the product after the sale.

So as we are able to scale our service network, that will also allow us to open up new states.

Amit Dayal -- H.C. Wainwright -- Analyst

Platform two versus platform one, is there any cannibalization in that? Or are these very different products and you don't expect much over now?

Mark Frohnmayer

They are very different products. The principal overlap would be on sort of materials construction, and I think on the things like the battery and the battery management system technologies. We'll have a lot of shared effort between those, which of course, makes up the bulk of the single largest item on our bill of materials. And so the one advantage, I think, that we will get by producing a larger vehicle that has 20-kilowatt hours plus on board is that the economy of scale that we will be able to achieve from battery purchase will be advantageous to the cost structure of our much lighter weight, lower-cost vehicle products.

Amit Dayal -- H.C. Wainwright -- Analyst

Understood. And just one last one for me. On the quality issues, are those addressed or resolved already? Or are you still working through them? Any color on that would be helpful.

Mark Frohnmayer

I would say that we believe they are largely addressed. There has been one real challenge that we've had with one of our electronics components, and we are hopeful that this last rev from our supplier addresses those issues. But we're aggressively testing those new components, and we will not stop, obviously, until we've got a vehicle that is truly exemplary for all. All right.

I think Jim McIlree, you might have been net.

Jim McIlree -- Chardan Capital -- Analyst

Yes. Thanks Mark. I'm with Bradley Woods. Mark, can you share with us how much tilting motors will contribute revenue and cash flow for 2021?

Mark Frohnmayer

I think we will have a much clearer picture of that at our next earnings call. Unless, Terry, if you want to take a while to swing that, but --

Terry Becker -- Chief Operating Officer

I actually have to calculate this in my head, so don't hold me to anything, but we're selling a kit about every couple of days. And it's roughly a $15,000 kit. However, we're moving the company from Seattle down to Eugene. We're bringing in-house a lot of the manufacturing of components.

We will need to hire people to assemble them. So there is a lot of infrastructure that we need to put into place. And so we will likely intentionally not get too crazy with numbers, but our goal is to let it ramp up at a pace that we can be sure we get the quality in check, the vendor supply chain in check. And then, of course, the dealers and distributors that sell the tilting motor works products out there into check.

Mark Frohnmayer

And just to clarify, so we acquired Tilting Motor Works. They had an existing product line that is a conversion kit for large motorcycles to turn them into tilting vehicles. That was not ultimately the driving reason for the acquisition was their existing product line, although we think that it is going to be additive to the overall Arcimoto picture. It gives us a nice beachhead, additional beachhead into the motorcycle market, but that is distinct from what I talked about earlier as far as our sort of platform two product family that we are going to be introducing the first product in that new product family, but that won't happen likely until late this year.

Jim McIlree -- Chardan Capital -- Analyst

And the recommendations that Munro is making or has made, when will those be integrated into the product?

Mark Frohnmayer

So it's going to be a mix. Some of the insights have actually already made it into the product. And I would say that there was one, they've got a notion that Sandy talks about, Bob, the [inaudible] one-arm builder in terms of how you design parts to be easy to assemble and to be able to be assembled without error. And we have taken some of those approaches through existing parts on the vehicle.

And in some cases, those have been applied to all the vehicles that we built. So we'll see some of those development insights make it into the vehicles that we're selling now and in the near future. But the real bulk of the effort that the Munro team is doing is on planning out higher volume production for lower cost in our new facility. And again, the start of production on that is October of 2022.

That is our target, and we will obviously continue to keep folks updated as we move down that product development path. All right. Rommel, welcome. Please introduce.

Rommel Dionisio -- Aegis Capital -- Analyst

Great. Thank you very much Mark, I'm Rommel Dionisio, one of the other sell-side analysts coming to stock, and I'm at Aegis Capital. So Mark, obviously, you've got a lot of irons in the fire, but just wanted to ask about the federal opportunity. Obviously, you've already been targeting some state, municipal agencies.

But with the new Biden administration, does seem like they're making a big push for electric vehicles, emission-free type of vehicles. Can you maybe talk about the long-term opportunity that you foresee there? And how your product might be tailored for that?

Mark Frohnmayer

Well, I would say, stay tuned. We've got some things that we have not talked about yet that we think might turn into opportunities in the relatively near term. But in the long term, I think I've been very heartened by the bold goals that the Biden administration has set forth for vehicle electrification, and we think that the automotive platform family has potentially a very big role to play in that push. And it could be anything from vehicles driving around Army bases to last-mile delivery for postal services and anything in between in terms of campus fleet-type vehicles.

So we look -- we're engaging on a number of different levels with the federal government. We've joined the Zero-emission Transportation Association with the goal that, that group's goal is to go 100% electric by 2030. And I think the combination of all that will push the relevance of Arcimoto's platform with the Federal Power.

Rommel Dionisio -- Aegis Capital -- Analyst

Just one follow-up. You I think a couple of days ago, we saw a press release in the hiring of international executive. Yes, I wonder if you could just maybe just give us a little more color on what the low-hanging fruit there might be. Obviously, there's a lot of countries around the world, who, some of them frankly are even maybe a little further down the curve in terms of electric vehicles than here in the United States.

And I wonder if you can just share some color there in terms of long-term opportunities.

Mark Frohnmayer

I would think of that as sort of the midterm opportunity for the company in the bigger picture sense. The near-term opportunity is that we have -- we continue to have substantial amount of inbound inquiries from all over the world for Arcimoto's platforms and products. And so having the reason that we moved to bring Dilip on board in the immediate term is just to really begin to understand the dynamics of market entry in different areas in the world, size out the market opportunities in various different areas. and understand the potentials for partnership for manufacturing to distribution, sales, all the rest, all over the planet.

And I think we build out really for that. All right. Jeff Campbell, coming to you. You're up, and then we might have time for one more question, if you had.

Jeff Campbell

Can you hear me, Mark?

Mark Frohnmayer

I can hear you loud and clear.

Jeff Campbell

OK. Great. The first question was just a follow-up on something that you talked about earlier in the call today. I was wondering if the changes that the fireman test that you talked about, the changes that they recommended, would that end up increasing the cargo capacity of an Arcimoto?

Mark Frohnmayer

What they were looking for is really just the Deliverator that we've already got, but as he specified it in more detail, it was sort of like they want to have one Deliverator and one Rapid Responder as we've currently articulated it so that they can have a three person team with a bunch of gear go out in terms of a Rapid Response. And the one thing, I guess, I would also add is just that one of the advantages, I think, that we really have at this point of this sort of new wave of electric vehicle companies is that we actually have vehicles on the road in the market, and we're able to test those vehicles with potential adopters, really understand what their needs are as we look to much higher scale production. And that's really it's part of our mantra of continuous improvement. But it's really all about gaining as deep as possible, an understanding of what our customers need in order to build the right solution for daily mobility for them.

Jeff Campbell

OK. And it's getting late, so I'll limit myself to one follow-up. I wanted to ask about the recently announced hire of Dilip Sunderam as chief international business officer. He formally worked from Mahindra, which itself offers commercial three-wheel vehicles, including an electric last-mile delivery solution.

I was just wondering, was he hired specifically for his three-wheel experience? Or were there other aspects in his background that was important to Arcimoto?

Mark Frohnmayer

I think his depth of experience in electric vehicle deployment was certainly one big part of key to bring him on board. And this is true of the vast majority of Arcimoto's hires. It's just that when Dilip came to us and expressed a profound alignment with the mission of the company, sustainable mobility is something that he has been passionate about for many years. He looked at what we were doing and said, this is the solution for the global marketplace, and I want to lead the charge.

That was a pretty compelling intro.

Jeff Campbell

OK. Great. Thank you.

Mark Frohnmayer

All right. We want to do a lightning round? Mike, any quick follow-ups?

Mike Shlisky -- Colliers Securities -- Analyst

Mark, you can hear me OK?

Mark Frohnmayer

Yes.

Mike Shlisky -- Colliers Securities -- Analyst

All right. I'll ask it with the camera off to keep it up to work. All right. So my other question is, I was curious, you have been talking a lot about micro mobility recently.

I think you've got a speaking engagement coming up in that sector. Are you waiting for platform two to put a product into fleets? Or does the current SUV in its current innovation have some potential there? I see where your competitors in the [inaudible] is now doing the fleet in Phoenix. Are you talking with any cities FUV to roll out that product in micro mobility applications?

Mark Frohnmayer

So we see the current sort of platform one family of products as being really kind of on the edge of micro mobility. I think the technical threshold is 1,100 pounds, and our 1.0 is about 1,300 pounds. But yes, we absolutely see opportunity in deployment of the FUV and its variance in micro mobility type fleets. And really, it's those combined fleets, where you're going to have the bicycle class vehicle as one option, the pickup truck as another option, an FUV-type vehicle, where there is a quote that I love that people aren't looking for quarter inch drilled, they're looking for a quarter inch hole.

So the real potential for vehicle sharing is having the right tool for the job, whatever your job might be. And we think that the Arcimoto platform one products feel a huge potential swath of the on-road vehicle needs as we go forward. And really, the platform too is all about the other side of the gap between the bike and the car. All right.

Who wants to take the last question?

Jeff Campbell -- Alliance Global Partners -- Analyst

I will.

Mark Frohnmayer

All right, do it.

Jeff Campbell -- Alliance Global Partners -- Analyst

Can you hear me?

Mark Frohnmayer

Hit it, Jeff. You got it.

Jeff Campbell -- Alliance Global Partners -- Analyst

OK. Arcimoto filings note that its R&D spend focuses in large part on reducing the cost of products, and that sounds like a pretty smart goal. I was wondering, what are the major cost nuts to crack between now and mass production?

Mark Frohnmayer

Well, the big cost centers of the product are the battery, electronics and everything else. So those are the three buckets. And I would say that we've got major initiatives focused in all three areas and some very interesting technology developments that we're not quite ready to pull the wraps off of yet. But that will certainly be a part of our story going forward.

Jeff Campbell -- Alliance Global Partners -- Analyst

OK. Thanks.All right, guys, with that, I'm going to call it. It is we're an hour and 20 minutes and really appreciate everybody tuning in. 2020 was a year that's hard to put into words.

I'm incredibly proud of the accomplishments of the Arcimoto team during that time and going forward. I'm very excited about the road and deeply grateful for all of our stakeholders. Some who've been with us for a very long time. Some of you who are just tuning in.

We appreciate your support, and we do look forward to seeing you on the road, and that will be happening soon. So thanks a lot. Cheers.

Duration: 41 minutes

Call participants:

Mark Frohnmayer

Eric Fritz -- Chief Marketing Officer

Jesse Fittipaldi -- Chief Strategy Officer

Terry Becker -- Chief Operating Officer

Mike Shlisky -- Colliers Securities -- Analyst

Amit Dayal -- H.C. Wainwright -- Analyst

Jim McIlree -- Chardan Capital -- Analyst

Rommel Dionisio -- Aegis Capital -- Analyst

Jeff Campbell -- Alliance Global Partners -- Analyst

Unknown speaker -- Alliance Global Partners -- Analyst

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