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Arcimoto, Inc. (FUV) Q3 2021 Earnings Call Transcript

By Motley Fool Transcribing – Nov 17, 2021 at 12:00AM

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FUV earnings call for the period ending September 30, 2021.

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Arcimoto, Inc. (FUV 2.78%)
Q3 2021 Earnings Call
Nov 16, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Unknown speaker

All right. Good morning, everybody. Welcome to Arcimoto's Q3 analyst and stakeholder webinar in conjunction with our recent filings last night to the SEC for Quarter 3. We're going to start this off with our company, our latest company, a review video, and then a short update on what has happened over the course of the last six weeks or so.

And then we've got an awesome panel of analysts who are familiar with Arcimoto, who are going to be joining the executive team in a Q&A session. So, Eric, you want to go ahead and roll the tape.[Commercial break]

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Mark Frohnmayer -- Chief Executive Officer and Founder

Greetings. I'm Mark Frohnmayer, CEO and founder of Arcimoto. Arcimoto is an Oregon C-Corp, founded in 2007 with the mission to build products that catalyze the shift to a sustainable transportation system. And to start this presentation with an overview video and then dive into Arcimoto's big overarching goals for the road ahead.

You can sign up for investor updates and find supplementary information, including our earnings press releases, financial filings, presentation materials, and webinar replays on our Investor Relations page at arcimoto.com/IR. To start, 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 our forward-looking statements for the reasons that we cite in our Form 10-Q and other SEC filings. Now on to the goods.

At Arcimoto, we build light, electric, ultra-efficient rides that are outrageously fun to drive for a reason. Our vision is a city that doesn't suck anymore. Today's city is dominated by the car. We pave over nearly half our urban land for these giant multi-ton, extractive machines that we mostly drive alone or with just one other person and leave parked rusting for 95% of their life.

That's nuts. We believe that by rightsizing, electrifying, and better utilizing our rides, we can reclaim our space, clean our air and make our cities much more livable for everyone. We've built a new human-scale vehicle platform and a family of products dialed for a wide range of everyday trips, the fun utility vehicle for daily driving, rentals, and rideshare, the Deliverator for last-mile delivery of essential food and goods, the Rapid Responder for emergency services and security. And the Flatbed for general fleet utility.

And the Roadster, a fun machine that drives like nothing else on the road. Every Arcimoto is pure electric, with a range for everyday driving. Have Rockstar Parking as a standard feature and accelerate from 0 to fun instantly. Our experience model is rental first with operations open in multiple destination markets and more on the way to give potential adopters a taste of the ride.

"I've been driving it everywhere. Just like a 16-year-old. I don't even care where I go or why I go there. I go out and I get in, and I just drive around." "That's awesome.

Awesome machine right there. It's quiet. It's got plenty of power. All the power you need and it's just comfortable." "Everybody wants it when they see it and they haven't even driven it yet.

The real joy is when you get to drive it and then you just get the feeling of what it's all about." "I'd also like to give a big shout-out to the Arcimoto team, your workmanship and design is awesome." I'd also like to give a big shout-out to the Arcimoto team. Your workmanship and design in the full future Arcimoto vision adds driverless technology to make shared rides much more convenient. Imagine a city where your personal transportation is available at the touch of a button on your phone enjoy the experience of driving again. And when you reach your destination, you just pop out.

And the Arcimoto is available for its next driver. We're in production now. Every Arcimoto is built here in the ramp, where we transform raw material through cutting, forming, welding, machining, and final assembly, all under one roof. To take the venture to scale, we purchased a new much larger facility, and teamed with Sandy Monroe & Associates with the goal of kicking off mass production late next year.

Finally, we acquired Tilting Motor Works, developers of the TRiO accessory that can turn two-wheel motorcycles amazing tilting three-wheelers. Together, we're building a new ultra-light micro-mobility solution for the rapidly growing global electric bike and scooter marketplace. With our overworking focus on scale, this year, we plan to demonstrate the full breadth of Arcimoto solutions for sustainable mobility and expand our market presence as we prepare for the next decade of the ventures growth. Arcimoto is a public company.

We've been powered since our inception by a community of stakeholders with whom we share a mission to catalyze sustainable transportation. I hope you join us. The name Arcimoto means literally archetype I drive or I drive the future and is the brand identity for the next-generation of drivers. Arcimoto's mission directly inspires the company's values.

Values, we believe, are fundamental to its achievement. We put people first. Our customers, our team, and the stakeholders who propel us along the way. We are lean by design, continuously improving what we build and how we build it.

Our impact on the world is always front and center. And if we're not having fun, it will show up in what we offer. And we are and continue to attract A-Team players, who have the hustle, grit, and collaborative instinct to get the job done right. Arcimoto is a new transportation endeavor, unencumbered by the legacy of 20th century automotive business models.

We generate awareness and sell online and have teamed with DHL for the direct distribution of our products to customers rather than franchise dealerships or company test drive outlets, both of which carry ongoing overhead. We focused our in-market experience on rentals and eventually vehicle sharing as a service. We have rental outlets open in Key West, San Diego, and Eugene as well as through GoCars in San Francisco with more destinations coming soon. Arcimoto's small light footprint platform makes it ideal for mobile service, where most customers' issues can be handled on site.

And for long-term ongoing maintenance, the electric drivetrain's robustness and simplicity mean that most ware items should be serviceable by existing lightweight automotive service companies. The company's big top-level goals are: first, to design and implement the pattern for mass production of Arcimoto's vehicles, such that we can rapidly produce vehicles for the global marketplace. Second, to deploy the intersection of future transportation technologies for shared, ultra-efficient, vehicles with a business model that wins as we demonstrate the full product portfolio of solutions for sustainable mobility, including a multitude of variants on our core platform. And finally, to deliver a new family of solutions for true micro-mobility.

Arcimoto is presently producing vehicles in low volume for early customers, providing us a critical early market presence and depth of knowledge of the performance of the platform on the road. To scale to mass production, we've acquired a new facility with more than 200,000 square feet of production space under roof on more than 10 acres. We've teamed with lean design and automotive production experts to plan for volume manufacture, targeting maximum output of 50,000 units per year. Engineering and production planning are now moving ahead full steam.

And construction on the new site is expected to start in Q4. The planned output of this effort is not just a production facility, but the complete set of plans to scale Arcimoto's output here and around the world; meaning significant effort to standardize all processes and documentation to more easily replicate these 50,000 unit production cores in other locales, sharing a single robust global supply chain. Since its inception, Arcimoto's vision has included the integration of driverless technologies to more conveniently share vehicles and drive up utilization. And for the first time, we've demonstrated driverless technology in the real world.

This summer at our showcase, Arcimoto and partners demonstrated a remotely controllable fun utility vehicle, including the foundational technology layers necessary for autonomy. While we see merit in the long-term aspiration of the perfect RoboTaxi that lets you focus on Twitter instead of the road, Arcimoto's Robo-Valet initiative is focused squarely on near-term shippable intermediaries that reduce the cost of the vehicle sharing business model. One element that separates Arcimoto from every other EV venture we've seen is the true flexibility of the Arcimoto platform for a wide range of everyday driving uses. Each of our products is largely the same, sharing the same battery, drivetrain, chassis, wheels, braking system, and so on.

Which are ultimately additive to our economy of scale. For the consumer market, we produce the fun utility vehicle and the Roadster, with a planned commuter vehicle down the road. We offer the FUV Deliverator and now a flexible Flatbed to the fleet market. And the platform has uses even in very specialized niche applications, such as the cameo we've built for on-road filming.

All of the work we're doing now to demonstrate the flexibility and applicability of the platform is feeding back into the design process for mass production, ensuring that what we build continues to be ever more adaptable for a wide range of everyday uses. As we look down the road, our first platform is just the beginning. We aim to continually lighten the footprint of mobility. To that end, last year, we began the skunkworks development of the mean and lean machine, targeted squarely at the rapidly growing e-bike marketplace.

This vehicle will be chock-full of new electric vehicle technology. We are actually reinventing the wheel this time. We believe it will perfectly complement our go-to-market strategy of rentals and rideshare. And we'll set a new bar for efficiency, utility, and affordability for a wide range of transportation tasks.

We acquired Tilting Motor Works at the beginning of this year to accelerate development of that program. But I want to take a moment to talk about what else we got in that deal, an existing product line for motorcycle riders who don't want to fall over anymore. Our TRiO accessory transforms a motorcycle into an amazing three-wheel tilting machine. And we see giant market potential for this product.

In the US alone, there are more than 12 million motorcycles in use. And the TRiO is already adapted to the leading big bikes, Indian's, Gold Wing's, and Harley's, of which 180,000 were sold last year worldwide. In summary, Arcimoto is shipping and continuing to further develop kickass, ultra-efficient, electric three-wheelers and advanced vehicle technologies alongside a world-class team with whom we share a mission to rightsize mobility as we grow our market presence in preparation for volume production. For the challenges ahead, we will continue to improve the experience for the Arconauts, our early customers, and riders.

The vehicles, the first-time user experience and sales, service and communication processes. We will continue to cultivate our leadership skills as our team and demand expands. And this means continued emphasis on process, culture, and our core values. We will maintain our focus on the health and safety of our team during an ongoing pandemic and the planet's not waiting around.

The IPCC's code red is our call to action. We must continue to step up our production pace amid the churn in order to make the contribution for which we are called. So that's the overview as of about 8 weeks ago. And we just yesterday, this one's hot off the presses.

Got a quick snapshot update for you from the road. And Fritz, you can roll that now, and then we'll dive right into the Q&A. Welcome, Ride of The Ride of the Arconauts quarterly reporting edition, broadcasting from somewhere in the wilds of Arizona. To sum up Q3 to present in two words, massive progress.

On every front, critical for the company's growth we've advanced, the planning and build-out of our mass production facility, our plans for the future of rideshare, including the first-ever demonstration of a driverless Arcimoto, the further expansion of our product family with the launch of the Roadster and first demonstration of the flatbed as well as the on-roading of our first true micro-mobility prototype based on technology we acquired at the beginning of the year, the expansion of our open market regions with the acceptance of quarters from Nevada, with Arizona and Hawaii targeted next. And the launch of The Ride of the Arconauts, our ultra-efficient roadshow plan to substantially expand awareness of Arcimoto and the unique experience of our rides nationwide. And despite supply chain issues outlined in our stakeholder update at the beginning of Q4. We sold a record number of vehicles to customers from our current limited production facility.

The push to volume production continues to be our most important overarching objective. And in the third quarter, we made significant progress toward that goal. We took possession of our new ramp facility and began landing new production equipment, including our new automated plastics production cell as well as began the renovation of the facility that will become general assembly. We plan to pause vehicle production for a portion of Q1 in order to move materials, quality, subassembly, and the assembly line into the new facility, after which we expect to achieve substantially higher unit output for the remainder of next year.

We've also made substantial headway on all of the design, engineering, and planning efforts to move each system of the vehicle to a mass-producible state. This work in tandem with what we continue to learn about the developing next-generation transportation market, provides the foundation of our application to the US Department of Energy for an ATVM loan, the final draft application for which we intend to submit before the end of the year. Now a note about that ATVM loan. We also did a lot of work over the course of the last year working to make changes in the authorization of the ATVM program with our partners in Congress.

And we're very pleased to report that the Infrastructure bill that President Biden signed today, contains a really important modification that we believe, in tandem with the market research that we have done, will really bolster our application for that program. Arcimoto's pace of innovation continues to accelerate as we focus not just on the vehicle itself, but really key technology upgrades throughout the vehicle architecture, including the battery system, the drivetrain, and the low voltage electronics and communications. Our innovation pathway is not strictly limited to improving cost and performance. We see rightsized and better utilized EVs as a critical pillar in our mission to accelerate the shift to sustainable transportation.

Given that the vast majority of rides today in the US have only one or two people traveling a short distance with a small amount of stuff. We think that this lightweight, ultra-efficient platform is really the right win for a huge range of shared mobility trips. As we look ahead to much higher levels of stepped-up production starting at the end of next year, we launched The Ride of the Arconauts program that we're essentially beta testing today, which is, we think, a radically more efficient way of doing vehicle roadshows. A typical way, and we've done this for more than a decade.

You truck vehicles, thousands of miles, people fly in, stay at hotels, and then everybody buggies back home. The way The Ride of the Arconauts work is it's a slow-moving set of convoys of vehicles, demonstrating the unique Arcimoto ride everywhere. We're aiming for every major population center in the United States. We want to cover basically the whole country over the course of next year and make sure that all -- everyone out there who has had a curiosity about the Arcimoto ride experience, gets a chance to get in the driver seat.

We think this is ultimately going to be a much more efficient way of connecting with customers, connecting with investors, connecting with stakeholders, connecting with the partners. There's just no substitute for getting behind the handlebars. So as we've been out on the ride, and this is actually true wherever we go. One thing that happens constantly is that people will stop us on the street and say, "That looks like fun.

Where can I rent that?" And that's just given us a lot of time to think about rental as really the default model for enjoying the Arcimoto, whether you're talking about kind of the niche, high-priced vacation destination rental that is particularly appropriate when we're building at low volume to the rental company-owned rental stores that we have in Eugene and San Diego, that enjoyed their first full quarter of operations in Q3. Our partnerships with GoCars Tours in San Francisco to our first franchise in Key West. And all the way to shared mobility programs like what we launched with Reef Drive, just very recently, where Arcimotos are available by the minute, by the hour, conveniently located. A first instance of that is in downtown Santa Monica, all the way to our long-term plans of the Robo-Valet where you hit a button on your phone, the vehicle that you want, whether it's a flatbed, a Deliverator or a fun utility vehicle shows up so you can jump in, take it where you want to go, do your trip.

There is no other vehicle platform that we are aware of that combines the amount of flexibility for different uses that makes a perfect grocery getter as well as the ideal vehicle for experiencing the beauties of the natural world. As we look forward, that rental-focused model is going to become, we think, a greater and greater part of the Arcimoto story. And then finally, I'd be remiss if I didn't talk a little bit about Platform 2, which is our entry into true micro-mobility. We are building a new vehicle the world has never seen.

And what I think, we haven't really talked about much, is that at the heart of that new vehicle is what we call micro future drive, which is a combined drivetrain system for micro-mobility devices. And we see applications, not just in our first product for Platform 2 but really a whole range of micro-mobility solutions targeted at that whole next level of efficiency. The electric bicycle market has grown by absolute leaps and bounds. It's enjoyed explosive growth over the last couple of years.

And we think we have a set of products and technologies that are going to be fantastic players in that space. We're all looking forward to getting back to base, taking everything that we've learned on this ride, formulating the plans for next year when we're going to scale it up and really bring the Arcimoto experience to you.[Commercial break]All right. Thank you, Fritz. And let's go ahead and bring on the executives and the -- and our esteemed panelists.

Amit Dayal -- H.C. Wainwright

Hey, Mark. Good morning. It's Amit from H.C. Wainwright.

Mark Frohnmayer -- Chief Executive Officer and Founder

Amit, good morning.

Amit Dayal -- H.C. Wainwright

Hey. So this new platform that you just highlighted the electric bicycle micro-mobility. Can you talk a little bit about when timing? And just some color on what the product is actually all about?

Mark Frohnmayer -- Chief Executive Officer and Founder

Yes. So -- well, and you could kind of see it in our first prototype in blurred-out form. The reason for the product is that, ultimately, we see Arcimoto's position in the market as being everything less than the car. We want to run from the daily go-getter platform that is the FUV, all the way down into that whole next order of magnitude of efficiency.

In terms of timing, we're not quite ready to take the wraps off it yet. We think it will be showing up early next year in terms of actually talking in detail about the product features and so on. But in broad strokes, it starts, obviously, with the technology that we acquired from Tilting Motor Works, which is, we think, the right way to do a leaning three-wheeled vehicle. And then we've been building a set of components for micro-mobility devices.

And primarily, our focus has been on the design of really the combination of -- this is the combination of charging and battery and motor control and so on in order to improve performance and drive down cost of that sort of whole combined system. And we're not really looking at it as a solution for existing patterns. So if you look at the products that Arcimoto builds, we are building new platforms. We're not taking -- the electric bike market today is largely bicycles that have been made electric.

The electric vehicle market is, in many cases, cars that have been made electric. We are focused on platforms that are sort of electric from day one. And so that's letting us think a little bit outside of the box. And I can be more -- I can add more vague things here, but I would just suggest that you stay tuned.

We're looking to unveil the platform to sort of product concept really right after the beginning of the year. But this is something that, to me, it sort of ticks all of the boxes for why would I not ride a bicycle class vehicle. And that's for me personally. Obviously, there are a lot of reasons people do and don't.

But I would just add that this is a market space that has undergone just massive growth, particularly over the last couple of years. And I think that it is -- that is indicative of a real shift in market sentiment. And we've discovered this not just from seeing what's happening in the e-bike market. But when we actually went out and did some much more in-depth market research around the fun utility vehicle.

What we've noticed is that in just the last couple of years, the market idea of what a vehicle should be has really shifted, and it's shifted in the direction of sustainability, shifted in the direction of micro-mobility. And we think it's a real benefit to the world and also to our plans going forward.

Amit Dayal -- H.C. Wainwright

And these -- Mark, this new platform, is it meant for highway driving? Or is it meant for just roads?

Mark Frohnmayer -- Chief Executive Officer and Founder

The platform itself is going to be capable of driving a variety of different very lightweight vehicles. The first product that we're building is in the class three e-bike space. So you could conceivably drive it on the highway, but you'd want to be on a very tall hill. Because those are -- their electric [Inaudible] is capped at 28.

Amit Dayal -- H.C. Wainwright

Right. OK. And this comes back to the financials and the quarterly performance, etc. Any updates on how Q4 is going for you guys? Revenues probably still weighed more heavily by rentals, I assume, just any update on the other side of the businesses looking?

Mark Frohnmayer -- Chief Executive Officer and Founder

I think on the revenue side, if you look at Q4, Q1, we're still in the midst of a supply chain churn. And then as we talked in the video, we're going to be spending a big chunk of Q1 actually moving our production -- our main assembly line features into the ramp. As we look beyond -- so from a revenue perspective, I would expect the same thing that we've been sort of guiding for the last five or so calls, which is relatively flat and lots of chop. As we start to get into end of Q1, into Q2, and beyond, we think that we're going to see a substantial increase in number of vehicles manufactured.

We are aiming for a lot of those to end up in rental or rental-type opportunities. So -- but yes, so stay tuned on that front. I think we're not giving yet, guidance in terms of unit production for 2022. But I'm expecting it's going to be a big step-up, multiples beyond what we did in 2021.

And we've got Craig on the call. Craig, are you ready to chime in. This is -- Craig was our very first -- we've actually got two of our very first analysts for Arcimoto, joining us on this call. So Craig and Jim McIlree.

Really appreciate you guys showing up.

Craig Irwin -- ROTH Capital Partners -- Analyst

Hey. So, Mark, I got the opportunity to ride the -- gosh, I'm going to use the wrong name, the Roadster. Your Roadster.

Mark Frohnmayer -- Chief Executive Officer and Founder

Yeah. They are.

Craig Irwin -- ROTH Capital Partners -- Analyst

The first unit, when I saw you in Las Vegas. And just like the FUV, right, the experience of freedom and kind of flying like you do on a motorcycle, it's a little bit more free, but it still has that stability, someone that's maybe a little bit older with a lot of money in their pocket, might be a little afraid of a Harley, but something like that is a natural fit. And the design is just beautiful. How do you expect market visibility to grow for that, right? I mean, I know you've got the original article out there, but how do you plan on marketing this one specifically? Does it go maybe to a different demographic than the original FUV? Do you expect it to resonate differently and when do you expect to have more units maybe to -- for people to ride and drive, so they can make their purchase decisions.

Mark Frohnmayer -- Chief Executive Officer and Founder

Great questions. So there are a couple of features on that. One is that, yes, I think the aging motorcyclist market is much more an opportunity for the Roadster. Although we actually have a lot of people in that demo that are attracted to the fun utility vehicle.

But that -- the ride experience of it is -- I mean, it really is -- I don't know, I feel like it's somewhere between a magic carpet and a broomstick, it's just like -- it's like nothing else I've experienced on the road. And the -- probably, I would say the key touchpoints on that. One is that in California, you don't actually even need a motorcycle endorsement to ride the Roadster. In a lot of states, you can drive the fun utility vehicle with a normal driver's license, but because it has no upper frame, the roadster will require a motorcycle endorsement.

In California, that's not the case. So in places like that, we think our destination rental is going to be a fantastic way for people to get experience of it. The other piece -- and this just goes to, well, how we saw you in Vegas. You were driving on the street.

You're like, wait, that's Mark. That thing looks cool. So -- but the whole purpose of The Ride of the Arconauts is to get -- is to really bring vehicles in the most efficient way that we can to all of our potential customers, people who've signed up. And then ultimately, once we get the market seeded, we think that we're going to see a lot of that pure effect where my neighbor, let me take the roadster out for a weekend, and now I've got to get one of my own.

And then the other piece is that as we look into rentals, as -- we're looking at the opportunities for rentals from renting by the minute, by the hour, by the day, by the week, by the month, and then even potentially longer. So I think that the roadster is going to be one of those items that has the potential for, "Hey, I want to rent this for three months, while I'm a snowbird, I'm heading South for the winter, I want this as a sort of a golf cart 3.0 for my gated community." And that's another piece of that puzzle.

Craig Irwin -- ROTH Capital Partners -- Analyst

Cool. My second question is about the ATVM loan application, right? The loan has some stipulations or at least the loan requirements have some stipulations about having an enclosed cockpit which then, I guess, means you probably need it. Things like maybe -- well, I don't know if you need air conditioning because the airflow is beautiful. But you could, depending on the definition of enclosed, right? I know your heating is fantastic.

Some of the things like windshield wipers and some of these other items that kind of come into play for compliance around the ATVM loan. Can you maybe sort of scope out how this is a match for things you're already planning, you're already developing? And the different phases of the loan, where are you as far as the original application or maybe moving into potentially due diligence for that loan?

Mark Frohnmayer -- Chief Executive Officer and Founder

All good questions. So I touched on a little bit. One of the key pieces that actually happened yesterday with the Infrastructure bill was a change to the ATVM relating to overall qualification for the program and the metric of financial viability. And what has been added is a -- the new target is a reasonable prospect of repayment.

So that's just kind of at the outset, probably the biggest hurdle of the ATVM for any new vehicle manufacturer that doesn't have existing profitability is that -- was that kind of -- that financial hurdle of, can we project out based on your present sales that you're going to be able to pay this back versus what is now the case, which specifically allows for things like detailed market research to help bolster those cases. So that we were doing that piece of it anyway as part of our application. That's been a big effort over the last quarter is just getting what we think is the underlying justification. And then to your point, there are requirements about what types of vehicles are actually supported enclosed, it's fully enclosed vehicles that are ultra-efficient, carry two people, so on and so forth.

And I tease it a little bit in the overview company video that we have what we are considering sort of a mass-market commuter vehicle on the drawing board. We've teased it in very, very broad strokes at the beginning of this year, when we talked about our target for 2024. So as we -- that is really what we are applying for the bulk of those funds for, we're making the investments in the core platform ourselves. And then -- but that major piece and that's the piece that is just some of the big-ticket tooling and machine -- all of the sort of the big expense of going into scale production.

A lot of that is in that mass market, fully embodied commuter-type vehicle. And that's really what we're looking to the Feds for help to get built.

Craig Irwin -- ROTH Capital Partners -- Analyst

Cool. It's nice to see our friends in DC actually fix that so the emerging growth companies can benefit. Congratulations. Good luck with that application.

I'm going to hop back in the queue. Thank you.

Mark Frohnmayer -- Chief Executive Officer and Founder

Thanks, Craig. All right, Jim.

Jim McIlree -- Dawson James Securities -- Analyst

Hey, Mark. Thanks for asking me to join you. I'm wondering about the price of the vehicle in 2022 as your manufacturing increases. Are you going to pass along to customers? The -- I'm assuming that there's going to be a cost decrease as you --

Mark Frohnmayer -- Chief Executive Officer and Founder

Our first goal on cost decrease is -- for us is to just get to per-unit profitability. And we see a couple of ways that, that happens. One is just by getting the -- getting so that we have a positive gross margin. And then the second is that as we look at a variety of rental operations, we want to -- we think that we can drive, in some cases, substantially higher revenue per unit created with a shared-use model than we can with an individual sale.

As we get into -- as the sort of more mass production portions of the platform come in. So we'll see cost reductions. So for example, you saw the backing forming cell was -- there was a short clip of that. That has now landed in our production facility.

We've powered it up. We're starting to run test parts. We'll have production parts on that, we think, in Q1, and that's going to be one of multiple cost reduction programs. The sort of the bigger steps happen starting toward the end of next year, and those are the much higher scale targeted changes that are coming into the platform.

And that's when it would be sort of in 2023 and beyond that we'd start to see some big price reductions on the consumer side.

Jim McIlree -- Dawson James Securities -- Analyst

And then you indicated that the increased production in 2022 is going to the rental markets. So I'm assuming that that requires a substantial increase in your rental outlets? And is that true? And if so, where would that be?

Mark Frohnmayer -- Chief Executive Officer and Founder

Well, so we generally try not to reinvent the wheel. Although on our Platform 2 project, we certainly are. When it comes to rentals, we certainly envision Arcimoto having a number of flagship rental stores that carry our own brand. But there are a ton of companies out there doing destination rental.

I mean, as an example, we're going to be demoing Arcimotos today on The Ride of the Arconauts so that -- at an e-bike rental shop in Phoenix. And so the plan there is really to say, how can we, with the most efficient and in then sort of the most efficient capital pathway, get the Arcimoto vehicles out into the market, establish the right win-win relationships with current end-market players and really drive both unit deployment and then lots and lots of brand awareness.

Jim McIlree -- Dawson James Securities -- Analyst

Is it possible that you would take equity positions in some of these rental outlets? Or is that not in the plans now?

Mark Frohnmayer -- Chief Executive Officer and Founder

I think that's certainly on the table. The simplest equation is us renting a vehicle or leasing a vehicle that is then rerented. But I think that there are -- there are certainly some groups that we have talked to, where we have a longer-term strategic alignment. And right now, it's just really all about identifying and teaming up with the sort of the low-hanging fruit opportunities in the market.

Jim McIlree -- Dawson James Securities -- Analyst

All right. Very good. Thanks a lot. That's it for me.

Mark Frohnmayer -- Chief Executive Officer and Founder

Thanks, Jim. Barry. Oh, wait. I saw Mike Shlisky's hand went up.

Mike. And then we'll get to you Barry.

Barry Sine -- Spartan Capital Securities -- Analyst

OK. Great.

Mark Frohnmayer -- Chief Executive Officer and Founder

Mike, your -- we are not getting the sound. Your headset connected perhaps, Bluetooth. All right. We're going to go to Barry Sine, and then Mike, we'll get back to you.

Barry Sine -- Spartan Capital Securities -- Analyst

Hey. Good morning, Mark and team. This is my first time in the panel, so thank you very much. Really exciting times at Arcimoto.

For me as a financial analyst, nirvana is 2023, you get to 50,000 units production capability. You're producing them profitably. And I'm trying to think about and understand the challenges you still have between now and then getting there. One of them, and you've talked about all of them and talked about the progress.

One of them obviously is a -- I think you've called that 2.0 FUV, you brought in Monroe, nobody better in the industry. The next challenge is going to be selling 50,000 units. To date, I think in your Q, it talks about 5,000 units sold to date. You're doing this Ride of the Arconauts program.

I'd be curious, how many people are you seeing in this program to date? How many would you expect? And then presumably, even that doesn't get you to selling 50,000 units a year. So what are your longer-term plans for sales? Would you do something big like a Super Bowl ad? How do you sell 50,000 units a year once you've done all this hard work to design a production-ready vehicle and build a plant?

Mark Frohnmayer -- Chief Executive Officer and Founder

Fantastic question. And guys on the exec team, feel free to chime in with your thoughts. I think -- what I'd say is there are going to be multiple components to that. One is we're targeting basically a price tag that is truly affordable for the mass market.

So we're assuming an average selling price around $15,000, which would put a base model somewhere where -- the long-term intent is to get the base model as close to $10,000 as we can. That would be really something that is -- as we've seen in the market, there is a niche market for this product family in the 20-plus range as you get close to $15,000 that is a much wider market. And then as you get to $10,000 it's a credit card purchase for a lot of people, and it's just -- it's almost everybody. So the -- in terms of building that awareness, just as one example.

We were in Austin, over the weekend with The Ride of the Arconauts. Over the span of that event, we did more than 200 test drives of the fun utility vehicles with two vehicles. This was at the Electrify America Show. It was definitely the Arcimoto was, I would say, the hotness there, in terms of the intensity of interest in folks.

And there is -- what we would expect to see is sort of that catalytic effect that we all saw with Tesla Motors, which is that as soon as there was one Tesla in the neighborhood, then the neighbor -- they gave their friends rides. They let their neighbors drive it. And pretty soon, two or three or four were sold just by word of mouth. I have never experienced a product in my life that has the same sort of just customer enthusiasm and certainly anything I've ever worked on that the Arcimoto does.

And I think that's going to be a really key piece of the virality focus. And then finally, again, one of the reasons why we're focused on rentals is, one, we think we're going to be able to drive more revenue per vehicle; two, we think utilization of vehicles is really important. So it's not just about lightweighting the platform. It's about making sure that it's in use much more frequently than a car is.

But finally, it's just -- it's all about getting lots and lots and lots and lots of butts and seats to help build the market for when we're at scale production. And ultimately, we see 50,000 units per year as one stepping stone on a path to sort of much, much higher volumes than that if we are to be truly successful in making a meaningful difference in terms of climate emissions.

Barry Sine -- Spartan Capital Securities -- Analyst

So no Super Bowl ads, it sounds like.

Mark Frohnmayer -- Chief Executive Officer and Founder

This is actually, I think -- I don't know, Jesse, you wanted to cut the check on a Super Bowl ad, Fritz? I'd say, my philosophy is keep the money on the road. So we want to -- and this even goes back to why we're doing Ride of the Arconauts in the first place is just the traditional means of vehicle marketing, I think, are crazy and wasteful. And so we're going to try and do it in a more efficient way. But I wouldn't rule anything out at this point.

Barry Sine -- Spartan Capital Securities -- Analyst

OK. If I can slip in a second question and then I'll go back in the queue. On the ATVM, I'm not as familiar with that program. Are there timelines you've talked about by year end, getting what you call the draft application.

So presumably that's not final. And then --

Mark Frohnmayer -- Chief Executive Officer and Founder

Sorry, final draft. We are ready to put this one to bed. We've done a ton of work over the last quarter and half to really refine both our understanding of the marketplace that we're going into and then the planning for all of the pieces that we're asking for help for. And that's the planning for our automated battery production and all of the various constituent components of the vehicle, the new mass producible chassis design, electronics and so on.

So we think that by the end of this year, we will be in a -- have it all tied up with a bow, and we're hopeful that, that can move through their process quickly.

Barry Sine -- Spartan Capital Securities -- Analyst

Can you give define quickly? What milestones should investors hope for on the ATVM? Again, we get initial feedback? When is the final approval? Do they have any mandated timelines on their review of the process?

Mark Frohnmayer -- Chief Executive Officer and Founder

There are two kind of key -- prior to funding there two kind of key milestones. One is the designation of substantial completeness, which is at the point that it is designated substantially complete, then we can begin accruing costs against future loans in the event that, that is a successful application. And then the second kind of key milestone is a conditional commitment to fund. And then finally, is sort of closing it and signing all the docs.

I don't believe there is a fixed timeline. What we have heard from the department is that they -- all the way to the top of the loan program is that they want to be moving very expeditiously on their side. So I would expect somewhere in the -- once it's all tied up with a bow, my best guess would be somewhere in the six to nine-month range. But again, I don't want to speak for the DOE.

They have their review and their process.

Barry Sine -- Spartan Capital Securities -- Analyst

I have my fingers crossed for you. Thank you for taking my questions.

Mark Frohnmayer -- Chief Executive Officer and Founder

Thank you, Barry. All right. Mike?

Unknown speaker

Real quick. Actually, just sorry, Mike, in the chat, Scott asked for clarification on the 500 sold that was talked about. I am pretty sure Barry was -- yes. Go ahead.

Mark Frohnmayer -- Chief Executive Officer and Founder

Thank you. Now we have very -- In terms of that 5,000 number, I think you're thinking of our pre orders and indications of interest, those are not actually sold vehicles. We have now many -- I think as at the end of Q3, we had manufactured in total, what, 424 vehicles, is that right, Doug?

Doug Campoli -- D.A. Davidson -- Analyst

Correct. 424 vehicles manufactured and 298, sold.

Mark Frohnmayer -- Chief Executive Officer and Founder

Almost 300. All right.

Doug Campoli -- D.A. Davidson -- Analyst

Of course, the difference is either in inventory or in rental or marketing vehicles. So definitely being utilized.

Mark Frohnmayer -- Chief Executive Officer and Founder

So that is -- yes, those indications of interest, we expect those have basically increased quarter over quarter for well, since we started taking reservations, I think. But we're -- part of the goal here is really, again, just to build the marketplace further in anticipation of much higher volume of production. All right, Mike, you got a mic?

Mike Shlisky -- Colliers Securities -- Analyst

Do you hear me now?

Mark Frohnmayer -- Chief Executive Officer and Founder

Yes, sir.

Mike Shlisky -- Colliers Securities -- Analyst

All right. Excellent. I did miss a few of these questions. I've been hopping back and forth on another conference call.

So, if I ask something, just tell me to go to the transcript so I can get the replay later. My first question is about the Infrastructure bill that was signed yesterday or even just general state subsidies for the EVS. Do you know of any subsidies, federal or state that now include three wheel, whether along with a two-wheel or with a four-wheel subsidy, that we should be aware of this changeover, let's say, over the last nine months or so?

Mark Frohnmayer -- Chief Executive Officer and Founder

Yes. So I did talk a bit about the infrastructure bill. And so you can't hit the transcript for that. In terms of tax credits, Oregon has 2,500 up to, I think, a $5,000 credit.

Is that still in their [Inaudible]? And then state of California has a $2,250 credit that applies to Arcimoto. We were -- we have been pleased that for the first time in, I think, more than 10 years, the latest draft of the reconciliation bill. Now at the federal level, includes a $7,500 tax credit for two and three-wheeled vehicles that are electric. And so when you start to add that into the equation, things look pretty amazing.

Of course, anything can happen in D.C. that bill has not passed. There's much sausage making between now and the promised land. So -- but we take it as a very positive sign, of course, that it ended up in a bill.

And we're hopeful that our partners in Congress will be able to push that through and make it happen.

Mike Shlisky -- Colliers Securities -- Analyst

Outstanding. I wanted to ask secondly about your pursuit of autonomy, and there were some parts of the moves of the video that had that. But can we tie it in with potentially what's happening with the Deliverator? We're starting to see autonomous delivery vehicles come out. And I'm wondering if the platform that you have right now can fit a different shape than a single driver vehicle instead could it have just a giant box on wheels and what will be capacity of that vehicle.

Mark Frohnmayer -- Chief Executive Officer and Founder

And actually, the company that is sort of -- has been driving driverless on the Arcimoto platform, a company called Faction. Their whole, I think, what they've articulated publicly is that they're wanting to go after that last mile, last 10-mile delivery with a driverless solution. And we use driverless because driverless encompasses a range of technologies from remote operation to limited autonomy, to some other stuff that's even, I think, lower-hanging fruit than that. But yes, we definitely see an opportunity for the platform in that space.

And so that's -- we are focused initially on the Robo-Valet and even some precursors that get there, which is hit a button on your phone, whichever one of the Arcimotos you need pulls up, you jump in the driver seat. And that distinction is really critical just because it is a substantially lower hurdle, right? If you have a Robo-Valet that only needs to go on some of the roads or it can go on designated pathways or designated loops only at low-speed and is only in driving driverlessly when there's no human in it, that is an easier technical problem to solve than the full RoboTaxi that goes on all roads at all speeds with human cargo. And yet that element, just the Robo-Valet piece is what is the cost reduction of the roboticized taxi fleet. It takes that logistics problem of getting your ride to you out of the equation.

And then when an Arcimoto shows up, most people prefer to jump in the driver seat.

Mike Shlisky -- Colliers Securities -- Analyst

Sure. I'm just -- I'm curious as to what -- if you didn't have a driver, what could -- how much cargo could the platform go without a person on it.

Mark Frohnmayer -- Chief Executive Officer and Founder

I think about. Just off the top of my head, I'd say you could have upwards of 500 or 600 pounds of cargo on our present platform. And then could have lots of different storage boxes, you could have -- there are a bunch of ways to attack that problem. I think the advantage that the Arcimoto has is that it can -- that, that platform can go 100 miles of driving and can achieve higher speed certainly than like a neighborhood electric vehicle.

So we see opportunity there for the fully nonhuman opportunities for delivery, again, all on the same platform. So the -- and one of the things I think that really -- that we have heard from Faction is just that it was -- the fact that we had aimed this platform for autonomy, really from day one, has made it a lot easier for them to do that integration.

Mike Shlisky -- Colliers Securities -- Analyst

That's outstanding. This has just developed in so many different ways. Thanks for answering my question, Mark. I really appreciate it.

Mark Frohnmayer -- Chief Executive Officer and Founder

Thanks, Mike. Hey, Fritz. Do you want to -- we've got a few minutes left. Can we get some of the questions from --

Eric Fritz -- Chief Marketing Officer

Sure. Right at the top here is a question about South Korea. We recently put out a release highlighting our work there and our presentation there. What specifically is Arcimoto looking for in South Korea? Is there any specific progress that you can share?

Mark Frohnmayer -- Chief Executive Officer and Founder

All right. I'm going to turn over the mike to Dilip here to talk about South Korea. And then also, Dilip, if you can give just a general lay of the land in terms of what we're seeing on the international front without getting into any, obviously, specifics that we haven't talked about yet.

Dilip Sundaram -- Chief International Business Officer

Sure. Thank you, Mark. So yes, Mark had this opportunity of making a presentation of Arcimoto and our products in one of the EV conferences in South Korea that are sponsored by KOTRA, which is the investment agency of the Korean government that -- to attract investment into South Korea. So our -- what we are looking at in South Korea is, it's one of the most innovative markets in the world that is really, I mean, from an adoption of innovative products, I mean, that really stands out.

South Korea really stands out. So it just made sense for us to make the presentation and just test the market. Of course, from a international perspective, I think one of the things that we are looking at as FMVSS markets, which is basically the Federal Motor Vehicle Safety Standards market, which is the US safety standards that is being accepted. Many of the Caribbean countries, accept the American US standards.

And those are the countries that we are targeting because then we don't have to homologate our products, it is easy. From an international perspective, we definitely see a tremendous amount of potential here. Europe has great potential, of course, other than FMVSS markets. Asia, some other countries in Asia, really has a great potential.

Now -- but in all cases, we have to homologate the product. So that is going to take some investment, and we're going to wait for that to make that right level of investment to go into the market. Sorry, Mark.

Mark Frohnmayer -- Chief Executive Officer and Founder

No. I just think this is -- you can probably kind of get a common theme here with Arcimoto, which is that we are trying our very best to stay as capital-efficient as we can and to take the low-hanging fruit that's out there first. Ultimately, we do see this as a global market play that it is easier to enter a market where our current product is already legal to operate on the road. And so we've got, I think, quite a few exciting opportunities coming down the pipe on that front.

Thanks, Dilip.

Eric Fritz -- Chief Marketing Officer

Thinking long term, could Arcimoto explain to us their strategy on how their ridesharing business will be able to benefit from economies of scale, while also capturing significant back-end revenues during the vehicle's life. Where do you see it being in approximately three years?

Mark Frohnmayer -- Chief Executive Officer and Founder

So I -- so I would say one of the real advantages of the electric vehicle typically is that it's just a longer lasting, requires less maintenance. At the end of the day, we want to build artifacts, things that go for 500,000 or 1 million miles of good use. That is a long-term cost reducer component of the rideshare business model. But the sort of the nearer-term would be just reducing the logistics cost of shared vehicle fleets.

And the -- what we've seen in the market is that there have been a bunch of different rideshare business models that have been tried, only a few have actually worked for shared vehicles. The others just end up being perpetual cash things. But one of the real challenges with any shared-use fleet is just the logistics of moving vehicles around and getting vehicles to where customers are going to want to ride them. And that's where we see some real low-hanging fruit opportunity in the driverless/autonomous space.

And those are the pieces that we're going to be going after first. Sorry, what was the last piece of that question?

Eric Fritz -- Chief Marketing Officer

Where do you see it being in approximately three years?

Mark Frohnmayer -- Chief Executive Officer and Founder

So in three years, we are -- we've said at the beginning of this year, we set 2024 as our target for both that kind of fully embodied Arcimoto being on the road as well as meaningful deployments of driverless Robo-Valet type fleets. So that's the three years out vision is that you -- three years out, our target is that you hit a button on your phone in one of our several, if not many, Robo-Valet markets and the Arcimoto you need for your days trip or your hours trip, shows up in front of you and you jump in the driver's seat and go. That's the three years out vision.

Eric Fritz -- Chief Marketing Officer

And then the follow-on on the same subject. When scaled how much does Arcimoto believe it would cost on a per-mile basis to operate a semi-autonomous or fully autonomous ride-sharing fleet of FUVs. We've taken some kind of very back of the envelope numbers of this. Jesse, are we thinking -- I mean, the sort of the near-term would be $1.25 a mile, something like that.

But ultimately, we want to reduce the cost of driving even well below that. We want this to be effectively personalized mass transit, something that is -- that has a -- not just a real environmental component, but truly an equity component as well.

We are at 6:30, how are you feeling, you want to take a couple more? Or --

Mark Frohnmayer -- Chief Executive Officer and Founder

I've got to jump back on to a -- jump back on the bus and go do some demos in Scottsdale, but let's take one more question.

Eric Fritz -- Chief Marketing Officer

OK. What are the possibilities to make a strategic alliance with a company like Hertz that is looking to reinvent itself, many tourist locations that could be a good match for such a deal?

Mark Frohnmayer -- Chief Executive Officer and Founder

Yes. I would say that I think Arcimoto provides an opportunity for many companies looking to reinvent themselves in how they do business to team up. And I've been certainly very pleased to see that Hertz's making a big move into electric vehicles with their commitment to buy, I think, 100,000 Teslas in relatively short order. So -- and yes, we see opportunities for partnership certainly in rental and rideshare and then, of course, all up and down the vehicle architecture.

At the end of the day, sustainability is a social networking exercise. It's going to require all of us working together to solve really what is the truly pressing challenge of our times. And that's -- I think that type of collaboration is really baked into the DNA of the company. And I think that's a fine closure.

So really appreciate you all coming out here this morning. I want to thank our panel of analysts for joining the executives. Apologies for the 5:30 wake-up. And to all of you who joined us, thanks for tuning in.

We'll see you soon.

Duration: 57 minutes

Call participants:

Unknown speaker

Mark Frohnmayer -- Chief Executive Officer and Founder

Amit Dayal -- H.C. Wainwright

Craig Irwin -- ROTH Capital Partners -- Analyst

Jim McIlree -- Dawson James Securities -- Analyst

Jim Mcilree -- Dawson James Securities -- Analyst

Barry Sine -- Spartan Capital Securities -- Analyst

Doug Campoli -- D.A. Davidson -- Analyst

Mike Shlisky -- Colliers Securities -- Analyst

Eric Fritz -- Chief Marketing Officer

Dilip Sundaram -- Chief International Business Officer

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