Arcimoto, Inc. (FUV) Q4 2021 Earnings Call Transcript

Arcimoto, Inc. (FUV 3.73%)
Q4 2021 Earnings Call
Mar 31, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Mark Frohnmayer

Welcome to the RAMP. In 2020, we laid out the big hairy audacious goal of opening a new factory by the end of this year that once at full capacity would be able to build a targeted 50,000 vehicles per year and provides a template for global replication. One bit of housekeeping. Arcimoto is a public company with a public mission.

So before I go further, I'd like to draw your attention to our safe harbor disclaimer. We took possession of this facility in Q4 of last year and transformed it at light speed, reconditioning Building A, where we are now, moving the assembly line over from the AMP, and booting up our automated plastics line and new machine shop by the middle of the first quarter. In spite of a global pandemic, Arcimoto doubled year-over-year production in 2020 and tripled production in 2021. Even considering downtime due to the transition to our new facility and validation of new battery cells, we plan to triple production again this year, after which we take the big steps up.

The foundation of every Arcimoto we build today, the root of our many shots on goal product strategy is our unique ultra-efficient EV platform that packs an incredible ride, outsized carrying capacity, and flexibility for a wide range of daily trips in a rightsized human scale footprint. All of our products, the Fun Utility Vehicle for everyday driving, rideshare, and rentals; the Deliverator, the last mile delivery; the Flatbed for general fleet utility; the Rapid Responder for emergency services; the Roadster, a pure On-Road fun machine; and the Cameo for filming and events are largely the same, sharing the same production line parts and economy of scale. The key to scaling Arcimoto to mass production, therefore, first and foremost is to make the platform itself more scalable. At our factory opening event earlier this year, we showed the first computer renderings of 1.X.

Arcimoto's refined platform design, the ongoing development effort of Arcimoto and its critical industry partners featuring both mechanical refinements and major simplifications in the electrical system, 1.X will unlock the big steps up in scale. We're aiming for a 7x increase in production next year up to maximum output for the facility in 2025. As we accelerate our push to scale, we are also accelerating the growth of our market presence. The FUV and the Roadster continue to receive rave reviews from demo riders and journalists alike, adding confirmation to our belief that Arcimoto delivers the most joyful ride experience of any vehicle on the road in order to maximize the number of people who get to enjoy our unique ride and drive exposure for the Arcimoto brand on our demo rental program.

But the long-term goal of turning that first-time new user experience of a vehicle into a profit center for the company instead of a cost sync. Late last year, we began earmarking a significant portion of our limited production output into this program, and we plan to accelerate that this year. For our commercial and government fleet options, early trials of the Deliverator, Flatbed, and Rapid Responder have provided invaluable feedback as we aim for volume production of these products. And at our ramp launch, we gave the first sneak peek at the Smokejumper initiative, a rapid response, first on the scene Arcimoto, augmented with a firefighting technology portfolio that uses significantly less fluid to extinguish blazes.

We are now working with ecosystem players to flesh out the full suite of offerings, including leasing options and broad service to provide turnkey solutions for fleet adoption. As we look forward, we see the platform itself becoming a key stand-alone part of the portfolio. We aim to make the platform accessible to a wide array of users, other vehicle makers, schools and research institutions and EV enthusiasts. This Arcimoto platform initiative will be a true hardware API for sustainable mobility.

And at our RAMP IT UP event, we announced that Faction, a Bay Area driverless vehicle endeavor, is our first API partner as we jointly demonstrated Faction's driverless delivery vehicle prototype publicly for the first time. All of this is Phase 1 of the RAMP expansion plan. Phase 2, starting next year is the next step. This will include a new logistics hub on the site, the reconditioning of Building B, the lay-in of the automated assembly line we've been designing with Munro and team as well as an extensive tool up of key parts the chassis and body that we believe will allow us to achieve maximum unit throughput on this site in 2025 and launch the Robo-Valet mass-market consumer end game, we started teasing last year.

Now the conventional wisdom in the electric car space is that the shift to clean transportation is constrained by raw materials, the precious extractive, highly refined metals, and rare earths in the battery and EV drivetrain. Let's unpack that. It became public earlier this year that GM's new electric Hummer clocks in at a whopping 9,063 pounds. That's enough material to build two model-wise.

We hit our 1.X targets. It will be enough to build 8 fun utility vehicles. We truly want to move to a sustainable transportation system. We do.

Electrification of the drivetrain is only one part of the solution. Rightsizing the footprint is equally critical. And while an 8x improvement over GM's flagship is a good start, we believe we can push the envelope way further in order to take the next order of magnitude leap in terms of efficiency, size, and use of materials on a three-wheeler while maintaining stability it needs to lean. In early 2021, Arcimoto acquired Tilting Motor Works and its world-class tilting trike technology portfolio.

At RAMP IT UP earlier this year, we showed the true fruits of this collaboration for the very first time, Arcimoto's mean lean machine.

Unknown speaker

So the feeling of riding it, it's very natural, just like a bicycle. You have an enormous amount of stability at high speed and at low speed. A lot of this is imported from the tilting motor work suspension. So each wheel is equipped with a high torque hub motor.

Torque vectoring will allow us to deliver the exact amount of braking force or driving force that each wheel needs as the vehicle adapts to the conditions of the road. This will provide greater stability, shorter stopping distance, better turning, and better acceleration. In terms of traction, your front wheel traction is incredible. I've ridden it on gravel, on wet roads, on bumpy stuff.

It filters out everything. You kind of forget that the world is slippery and bumpy, and the feel of pedaling this thing is extraordinary. Notice the hand bars. There's nothing on them.

There's no shifter, no throttle. I don't have to shift. I don't have to think about throttle inputs. I just pedal and it goes.

The pedal generator is putting useful energy into the drivetrain. It can also be used in stationary mode to recharge the battery without moving the trike. It's ergonomic. It's stable.

There's no learning curve. So this is the version three prototype. The final model will have a battery packaged in here. Drivetrain will be compact and enclosed.

There will be options for a double seater. So you can have a passenger and flip-down footpegs. So the team at Arcimoto is super excited to bring this to market and deliver an excellent product, unlike anything you've ridden before.

Mark Frohnmayer

The MLM will be an e-bike class vehicle like no other, including features never before seen in a vehicle of this class. At the heart of the MLM is a new technology platform we call Micro Future Drive, which includes Arcimoto's new cylindrical cell battery design and co-packaged electronics suitable for a wide range of micro-mobility solutions. Available for preorder now, we plan to launch the MLM into market before the end of the year. Going back to the bar graph, one Hummer, two Teslas, eight FUVs.

The same amount of material can be used to produce 100 mean lean machines. For transportation, sustainability is micromobility. And this transition doesn't have to be a sacrifice. The move away from the idea of the car is more fun, less hassle, and more livable for us all, and I hope you join us.

All right. So if I do summarize Arcimoto in one word right now, it would be momentum. The team is rocking, and this has been just super exciting for me to be a part of the -- I think part of this is our focus that we started talking about last year on culture, on leadership development, on process. It's starting to pay big dividends in terms of the pace -- the accelerating pace of the team, and also we continue to attract really amazing talent to the venture as we move forward.

I am incredibly proud of the Arcimoto family that continues to deeply embrace our mission to cannibalize the shift to sustainable mobility and step up every day to meet the challenges of a growing endeavor. We're also really leaning into -- distributed work tools have been become common during COVID to de-silo even as we grow and deepen our share of connection even as we expand the geographic footprint of the team. So I'm going to start out with just a couple of notes on -- first on the Mean Lean Machine. Interest in the Mean Lean Machine has been considerably higher than I anticipated.

I was targeting in my head about 1,000 preorders by the time we launched production. In just, I think, about five weeks, we now have more than 700. And I tribute that to a few factors. One, it's totally kickass as a career product developer.

I can say it is always awesome when an early prototype exceeds your own expectations. Second is that the e-bike market continues to rocket. Fueled by the rising gas prices, I think, in a growing awareness that we, as a culture need to rightsize mobility. And then the third thing is that we see a huge potential for commercial delivery using this platform.

A number of the organizations we are talking about -- talking to about large deployments of the Deliverator are saying, "Oh, hey, we would also like to look at the Mean Lean Machine for areas where we're currently using e-bikes for delivery." Better carrying capacity, more stable, higher speed, there's a lot of benefits that the Mean Lean Machine will have versus current electric bikes in areas where -- very dense metropolitan areas. So we are aiming for our first multi-prototype run in May. That's coming up real soon. And while we won't announce actual final pricing until we get much closer to launch, for stakeholders to sort of think about our strategy here, I'm anticipating a tiered approach.

So if you look at the e-bike marketplace today, you have sort of very premium e-bikes in the $8,000 and up range. Of course, we think the Mean Lean Machine is going to be a premium vehicle in this class like no other. Then the kind of the sweet spot that we see in the market is in that anywhere in the $3,000 to $6,000 range. And again, we would see that kind of mainline being probably closer to the high end of that range as we get to sort of true mass production of the Mean Lean Machine, we want it to be -- and this would be more of a very base model, we'd be aiming in the $2,000, $3,000 range.

So just as you start thinking about this from a numbers perspective, we think this is -- the MLM is going to be a big boost to the already significant financial potential that we see of the FUV platform family. If you think back to that vehicle graph of one Hummer, two Teslas, eight FUVs, 100 Mean Lean Machine, and then look at it through the lens of revenue per pound of material, I think the EV Hummer is like $115,000. Two model-wise today, maybe $130,000. Eight-scale production of the FUV is more like $150,000.

For that same amount of material, we see the revenue potential in the $400,000 to $500,000 for the Mean Lean Machine. So big win for the planet, big win for the bottom line. And speaking of financing, this is a topic that comes up regularly for our stakeholders. For 14 years, Arcimoto has been financed incrementally, building value far in excess of our spend, and our ATM facility that we have with Canaccord serves as really as a backstop for this approach.

It lets us be opportunistic when conditions are favorable for our investors without entangling us in toxic deals that plague the microcap market. That being said, we think the time is right for a holistic solution to fully fund the business plan to scale, including the right tools for the job. This includes targeting the DOE for big production capital expenditures, and most of that will land in what we're calling Phase 2 of the RAMP development process. So that's -- the build-out of that does not start until next year.

Also fleet financing for our rental vehicles, proper real estate financing, and then also long-term, strategic equity partners. I have great confidence in the team that we have assembled to tackle this effort, and I look forward to sharing more on this front sit. And then finally, my last note, and then I will turn it over to Kevin, is that Arcimoto continues to grow its executive team. with key top-level hires to help lead the extraordinary growth path ahead.

For these stakeholder updates, we are going to start rotating in new members of the executive team to give added color on the areas that they're leading. And so today, I would like to introduce our new VP of commercial operations and strategy, Kevin O'Rourke. So Kevin, meet our stakeholders.

Kevin O'Rourke -- Vice President, Commercial Strategy

Thank you, Mark. And more importantly, thank you to all the stakeholders that have joined us here this afternoon. My 15 years of experience in the automotive industry comes in many different arenas. But for the last five years, my focus has been on helping fleet operators decrease their costs and maximize the potential of their assets out in the field.

As a recent addition to the Arcimoto family, I feel it's important for each and every one of you to understand what brought me here. The answer to that question is vision. Arcimoto is set forth on a journey to change the way that the world used commercial fleets, last-mile delivery, and sustainability as a whole. So what does that mean? And how does Arcimoto provide a product that will ensure companies can not only meet their electrification goals but do so in a profitable way? Rightsizing of a business's fleet can drastically change their efficiencies for the better and day-to-day operations.

We all see large diesel delivery vehicles every day, trying to navigate through dense traffic and narrow streets. With the expense of fuel, maintenance, and upfront acquisition costs, the impact that these types of vehicles have on businesses and consumers is obstructive, not to mention the amount of raw materials required to build the vehicle itself. Now let's look at Arcimoto. We have the ability to provide a fully customizable solution to our commercial customers that will not only help them deliver packages or provide services but to increase their bottom line profitability.

How do our platforms do that? By providing a substantially lower acquisition cost, decrease in vehicle maintenance, eliminating the use of expensive fossil fuels, and allowing for additional vehicles to be added into the fleet to increase productivity. Now how do we take that one step further? We are looking at ways to provide our customers with an all-encompassing vehicle package that not only provides the vehicle itself, but maintenance, logistics, telematics, insurance, and much more. Eliminate the need for fleet operators to control expenses with many different vendors and provide them with a way to do everything in one place. The voices of fleet operators around the globe have been heard, and now it's our job to help them get it done.

Before I turn the call back over to Mark, I'd like to touch on one more thing that's extremely important to me, and that's our team. As you heard earlier, I referred to Arcimoto as a family because that's what we truly are. The members of this family bring the experience, knowledge, and dedication that is desperately needed to make the changes to this industry that I previously spoke about. I'm truly honored to be here, and I'm looking forward to all that we're going to accomplish together.

So, Mark, I turn it back over to you.

Mark Frohnmayer

Thanks, Kevin. And man, it's very good to have you on the team. You've been making a dent in our universe in very short order. So great to have you on board.

And I will introduce the rest of the executive team for those who are here today that you -- and those of you who've been with us for a long time know Eric Fritz, our chief marketing officer; Doug Campoli, our chief financial officer; Terry Becker, our chief operating officer; and Jesse Fittipaldi, our chief strategy officer. We're going to take a few questions that came in from stakeholders over say. And then we are going to bring on the rest of our panelists, our analyst panelists, and get into a Q&A that's live. I would also offer that for those of you in the Wall Street analyst world who are following along and on the call, who would like to be a part of a future panel, please email [email protected], and we will bring you into the fold.

Unknown speaker

I am already looking at -- let's get a few questions rolling here. What do you see as the greatest challenges to scale up to mass production?

Mark Frohnmayer

So for me, I would say probably the biggest challenge of scaling up to mass production from my vantage point is getting an ever-growing team to continue to work together better and better to hit the goal. And that's what I talked about a little bit earlier in terms of our focus on leadership, on culture, on process. That's all about accelerating our individual contributions even as we scale the size of the venture. And I guess, I would say I'm incredibly pleased at both the talent that we continue to bring on board and then the way that we are growing together, and working together gives me a lot of confidence that we're going to be able to tackle this problem.

And then you add a layer on to that, things like we're facing a topsy-turvy supply chain for the next several years, depending on which piece you're looking at, chips or batteries or everything else. You've got geopolitics that play a role in that sometimes in very negative ways. And then just the challenge of continuing to develop and refine super cutting-edge products and then bring them into serious production. hat Terry has talked about is that -- and then production is one piece of that, right? So the production is cranking them out the door, but then there is the logistics of getting them to customers, there's ongoing building out of the service network, and then continuing to build the market presence required to actually support that production operation in the first place.

All of those are big challenges, but it starts with leadership, culture, process.

Unknown speaker

How long until the FUV can be sold at sub-$1,500 prices?

Mark Frohnmayer

So we have targeted a sub $15,000 kind of entry-level base model price for when we are at that full capacity output of the RAMP, which is 2025 is where we are targeting that kind of maximum amount of output capacity. I would say this, no need to wait. You're talking about a few thousand bucks versus a couple of years of delayed joy, not worth it.

Unknown speaker

Tesla said they will be letting other providers use their charging network. Will Arcimoto use Tesla chargers?

Mark Frohnmayer

So this is something that actually a number of our customers have asked for. We have -- many of our early adopters are also Tesla customers. And so to us, it makes a lot of sense that they would be able to share the same home charging plugs. And then as we look at the 1.X program, we're looking at being able to add much higher capacity charging to the FUV.

So that would be -- you could do more of a DC fast charge. At that point, it would make a lot of sense, and then it's a matter of just building the business relationship to make that happen. So we are strongly in favor. I think Tesla has done an absolutely outstanding job in terms of building out a charging network that is -- really covers the world.

And it's very easy to -- it's easy to use, trip planning. I mean they've really made that piece of the puzzle elegant and simple, and that's something we would like to support and be a part of.

Doug Campoli -- Chief Financial Officer

Are there any plans to expand into markets or build factories in India or China where motor-type vehicles are extremely popular?

Mark Frohnmayer

Yep. We see the world as ultimately the Arcimoto market. It makes -- the platforms we are building, whether you're talking about Europe or Southeast Asia, you've got dense cities with crowded streets and already high adoption of smaller form vehicles. We build vehicles in that category that are super awesome.

And so we think those markets make a ton of sense not just for distribution, but for production as well. And we hired Dilip Sundaram, who is our Chief International Business Officer, last year. And I think later this year, we'll have some interesting steps to talk about on that front.

Unknown speaker

When will the RAMP start rolling out new units? And what is the expected output by Q3, Q4, and into next year?

Mark Frohnmayer

So we -- RAMP has actually already output new units. We are -- the two pieces of that of Q1's production that will -- that are keeping that very constrained are: one was the shift over to the RAMP; and then second, the validation of new battery modules. The move over is done. The validation of new modules is almost done, and we expect that early in Q2.

So we are slow rolling out the door today but starting, I believe, the internal target is April 20 for the new modules to begin production again. And at that point, we'll be cranking it up. We have not given guidance and are not giving guidance on quarter by quarter this year. But we are -- as I said in the video, we are planning on basically tripling production this year, which is -- so we did, I think, 331 units of production last year.

Doug, is that right?

Doug Campoli -- Chief Financial Officer

Yes. That's correct.

Mark Frohnmayer

All right. So we want to break into four digits in '22. And then as we get 1x on the road, that's going to be what unlocks our big scale steps forward, so aiming for a 7x of this year. Next year, up to maximum capacity by 25.

Unknown speaker

When will the new project launch? And I assume that's referring to the Mean Lean Machine.

Mark Frohnmayer

That would be my assumption as well. We are targeting end of the year for the official launch and sale of the first units of the Mean Lean machine. And again, we're likely to start with what I would call a very signature series version of that product. When we show you what we're doing with the next round of prototypes, I think you will understand why.

Unknown speaker

When do you plan on getting doors with windows?

Mark Frohnmayer

So we actually showed doors with windows in prototype form at the RAMP IT UP event of a few different varieties. And some of those -- we're testing a few different approaches for the current FUV platform, one or more of which may make it into production. And then as we look to the products built on 1.X, those will have windows as an option out the gate.

Unknown speaker

Can you go in depth on how Arcimoto could license its new technology to other manufacturers? Between batteries, general assembly, and other patents, how large of an opportunity do you see this being an accelerating growth and financial stability?

Mark Frohnmayer

So we -- well, there are a few pieces of this. The Arcimoto platform initiative really is all about driving adoption of the Arcimoto platform by other companies by research institutions, even into the enthusiast realm so that people who are really interested in making experimental vehicles could be a part of that effort. The one piece that we sort of really teased at the end of the RAMP IT UP presentation was both the new cylindrical cell battery pack architecture that we're developing and the agreement that we have entered into with DW Fritz to explore pairing both the license of the design with the actual automated production line that goes along with building those batteries. And so we are exploring.

That will be likely the first real exploration because we see that as that new pack architecture is really having the potential to be an industry-leading solution that has applications for anything from micro-mobility devices all the way up to very large vehicles. And we will have -- we've still got a lot of work to do to get our own piece of it into production and truly proven out. But I expect that we will have a lot more to share on that topic later on this year.

Unknown speaker

Where is Arcimoto app in the ATVM loan process? And when do you expect a decision?

Mark Frohnmayer

So what -- as I kind of mentioned in the financing section, there are a couple of pieces of this. One is that what we are putting together today is really a holistic approach to fully fund the business plan to scale. The ATVM is one part of that. We see that really coming in.

And Jesse, I think you can add a little bit of color to this, which is that as we have continued to bring on rockstar talent and refine with Munro, it's really meant a cost-shifting of a lot of the big, expensive pieces of the program until next year and beyond.

Jesse Fittipaldi -- Chief Strategy Officer

Yes. I think you nailed it, Mark.

Mark Frohnmayer

That nod -- I'll take that nod as the additional color. All right. Perfect. All right.

Well, let's say, our OG analysts have been very patient. Let's bring them on.

Unknown speaker

Do you want to call on them, Mark? So they know --

Mark Frohnmayer

Yes. We have Barry Sine. Mike Shlisky, Jeff Campbell. Is that -- there were -- did we get -- I think there were a couple of folks who are dialing in.

Are they -- did they get booted somehow? Well, all right.

Unknown speaker

If we have Craig, Irwin, or Jim Mcilroy somewhere in the chat, let us know.

Mark Frohnmayer

All right. Jeff, are you camera-ready? You could complete our Hollywood squares here if you are. All right. Well, Barry, since you came out and joined us for RAMP IT UP, why don't we start with you?

Barry Sine -- Spartan Capital Securities -- Analyst

I was going to say it's more like a Brady Bunch-type layout.

Mark Frohnmayer

We don't have a choice.

Barry Sine -- Spartan Capital Securities -- Analyst

Either way. I have two questions if I can squeeze in, please. So one of the things I was able to talk to dozens of Arcimoto people and just a great attitude. And one of the things that I heard quite a bit that you didn't talk too much about today was the rental program, and rental will give you a recurring stream of revenue.

You've talked about rental first. I think there's two company-owned locations and then 5 partners, but you've said you want to unintended ramp up that program as well. So could we talk a bit more about that and how significant might that be in terms of revenue generation in '22 and '23?

Mark Frohnmayer

Well, I would say the first goal for us is -- and I think we're now up to eight rental either -- or company stores or rental partners in the market. We have Hawaii coming online here very soon. I believe we're targeting May 1 to get our lease in place, and then that's going to let us actually unlock Hawaii, both for sales and for rentals. Hawaii, Southern California, Florida, those really are beachhead markets, no pun intended.

But the first goal is brand awareness and sort of the try before you buy that is pretty much a requirement for almost everybody purchasing a motor vehicle, right? Almost everyone wants to actually try it before they are willing to sink a lot of money into a purchase. And we think that long term, that rentals is not just a way to provide a way for people to try it in beautiful places, enjoy it for a day, but actually to become breakeven and then ultimately profitable. The typical new user -- first-time user experience of a vehicle actually comes at great cost to a traditional vehicle manufacturer, whether you're talking about the sort of the franchise model of automotive or the company store model of -- I mean, this is -- Tesla has been the real pioneer here, but then you've got Rivian stores and Solo stores and Lucid store. So you're -- in those scenarios, you are either putting out a chunk of the margin or you're putting out a lot of opex and capex that never comes back other than the sale of the vehicle.

And we see that rental model as being, why don't we turn that piece of the business into a profit center? We are -- so our first goal is butts and seats. Next is drive awareness on the road. And then third is profitability for that piece of business.

Barry Sine -- Spartan Capital Securities -- Analyst

And if I could squeeze in just one more, please. The -- getting to profitability starts with a positive gross margin. So why don't you talk about that and maybe see you guys expand upon that a little bit? So there's a couple of things that I'm wondering about. At the RAMP IT UP event, I was able to spend a lot of quality time with Sandy Munro and his team, and you've talked about vehicle designs.

The second thing is, and I was able to get a firsthand look at the new assembly line, but there's more to come with automation. So automating the assembly line would be the second part. And the third part, you've talked about getting the volume unit numbers. As you put more volume to that line, a big part, Doug, of cost of goods sold is always fixed cost depreciation.

So it seems like there's a lot of drivers in place to get to positive gross margin. And then that would be the key to getting to positive EBITDA and then EPS? Could you just talk about that, please?

Mark Frohnmayer

Yeah. And I think, Barry, the one I would add to that, so it's volume, it's assembly optimization. But -- and then sort of the hat vehicle design that is the simplification of things like the chassis and then ultimately as we move to that mass production stage, it's really a change in material production method. But what we have -- as we look at the bill of materials today, it's -- the big chunk is battery, electronics motors.

I mean that's our -- that's the majority of the cost in the vehicle, and that's really what the 1.X program is all about. So it's really driving the simplification and ultimately automation of those core components of the platform. That will be the first big step in the push to positive margins. The other piece of that is that -- and this is really where the work that Kevin and team are doing on growing the commercial opportunity is that when you look at the pricing structure of our commercial offerings, they're actually higher than our consumer offerings by a good stretch.

And as we put in place the tools that let fleet adopters actually adopt Arcimoto vehicles as an opex rather than a capex, then you start to look at it in terms of what is total cost of ownership, but then also what is my monthly on the Arcimoto solution versus a delivery truck or a van or whatever. And we think that even with a higher sort of intermediary retail price that we're going to be able to deliver a dramatically lower cost to businesses for those solutions. And that's why I think as we go particularly into next year, that's going to become, I think, a very big part of the business story of the FUV family.

Barry Sine -- Spartan Capital Securities -- Analyst

OK. Thank you. I'll let somebody else ask questions.

Mark Frohnmayer

Mike?

Mike Shlisky -- Colliers Securities -- Analyst

Hello, Mark. How are you? Everybody else. How are you doing? So maybe I can start off with a question just on the -- I guess sort of a feel for the cash outlook with the margin outlook for the year. Any kind of ballpark you can give us how much it might burn this year would be appreciated?

Mark Frohnmayer

All right. So Doug, do you want to take a swing at that one? In terms of the -- what we have looked at, and I'll just preface it with, as we look at the spend over the next 18 months to get to what we see as sort of positive run rate on the company, we look at that total over 18 months as being in the, I want to say, $100 million ballparks. The bulk of that is in capex. So that's -- I don't consider that burn.

That is -- and actually, I don't consider even the spending on the people and development is burn, I consider it investing in the future. But that's the -- as we look at all of the different pieces of that sort of holistic financing puzzle, that is the number that we're landing on. And that gets us -- we believe if we execute well, and this team has been executing at peak performance that we think we can -- that, that would get us to a positive run rate for the company. Now there will be additional scaling and investment that happens after that, but that's a significant near-term milestone.

Mike Shlisky -- Colliers Securities -- Analyst

But it's not lost on me that your outlook for 2023 is 21x what we saw in 2021 as far as production. You're suggesting that, that would be a good level of we could get cash flow positive?

Mark Frohnmayer

That is our goal, and I think that's what we put in our K, if I recall correctly, Doug. Is that right?

Doug Campoli -- Chief Financial Officer

Yes. And to add, if you look at our operating expenses and our R&D, that R&D is increasing substantially, and that's part of the investment in the future that Mark was just talking about.

Mike Shlisky -- Colliers Securities -- Analyst

OK. I don't want to ask for any quarterly guidance, but because it's March 31 now, you tell us maybe how many you might have produced the shifts in the quarter that's ending in a few hours.

Mark Frohnmayer

Terry, how many did we build and ship out of the RAMP? These are non-audited numbers for 2022. But if you've got a ballpark.

Terry Becker -- Chief Operating Officer

So we built and completed about 25 vehicles in Q1 in spite of the fact that we were moving from one factory to another setting it up doing all of that. And I think about 8 of those have come off the line in the ramp. But that's where we're at. It's all testing.

It's dialing in the processes. It really wasn't even expected to be any this quarter but in the act of making the move and dialing it in. We did pull that many.

Mike Shlisky -- Colliers Securities -- Analyst

So the goal is to get to the four figures.

Terry Becker -- Chief Operating Officer

Yeah. How many went out the door, there could have been some left from Q4 last year that went out the door in Q1. So I don't know the final number of what actually went into revenue in Q1.

Mike Shlisky -- Colliers Securities -- Analyst

Got it. So clearly, there's going to be a much better run rate probably in Q3, Q4?

Terry Becker -- Chief Operating Officer

Absolutely.

Mark Frohnmayer

Yes. And by the way, this is consistent with what we talked about on our Q3 call was we were really expecting basically 0 output in Q1 with the move and with the battery validation. So I certainly look at this as the team actually getting vehicles out the door in Q1 in addition to those steps as being a good thing. But we see the bulk, obviously, the bulk of the output coming in Q2 and beyond.

Mike Shlisky -- Colliers Securities -- Analyst

Thank you for that, Mark and Terry. My last question is on the Smokejumper product. I recall I asked you this question before. But do you have to go through any kind of special certification or special R&D to make sure that, that is available to license firefighting operations? Or are these going to be for private customers like an airport or a nongovernment entity?

Mark Frohnmayer

Jesse, do you want to -- Jesse has really been leading the charge on Smokejumper. So I don't think that we've gotten to that stage yet. But Jesse, if you can offer any more on the program, that would be great.

Jesse Fittipaldi -- Chief Strategy Officer

Yeah. Mike, we've got a team that we just brought in to help us understand the requirements of that product officially from the standpoint of the folks who actually use it. So it's just become -- as you know, it's become more and more of an exciting product offering that we have that has a lot of potential for it. And so we've -- over the last couple of months, we've been working with some folks down in California to kick that off and make it real both on the testing side, more configuration, and then whatever the regulatory stuff we have to go through.

Mike Shlisky -- Colliers Securities -- Analyst

Got it. [Inaudible] I'll pass it along to somebody else. Thank you so much, guys.

Mark Frohnmayer

All right. Jeff, you're up. You're muted. All right.

While Jeff works with technical challenges, Barry, you got any more?

Barry Sine -- Spartan Capital Securities -- Analyst

Let me unmute. Yeah. A lot of questions on the ATVM. Not sure about the -- what is the government process who goes through that? When do you submit the final? And then what steps do they have to take to vet that out? And what might the time line be? And I assume once you submit the final, we'll see a press release on that?

Mark Frohnmayer

I would expect that we will let our stakeholders know when we submit that final application. And to me, this really comes down to submitting an application is not the actual goal. Submitting a successful application is a goal, and that means basically making sure that we have the holistic package put together to fully fund the business to scale, and that -- part of that comes down to, obviously, the continued development of our market and then also that we have the pieces that the ATVM can't pay for that those are covered by other sources of capital. So those are all elements that are going to come into play, we think, in the very near future.

And that's -- so that's another one where -- we've got another call coming up with stakeholders in 6 weeks, and I expect that we'll have more updates on lots of good stuff at that point. But as we said at RAMP IT UP, we've got a sort of a, I think, a plan for a continuing stream of good developments. A lot of it have been cooking for a long time. So certainly, stay tuned.

And it looks like Jeff got it figured out. Jeff, welcome.

Jeff Campbell -- Alliance Global Partners -- Analyst

Can you hear me?

Mark Frohnmayer

We can.

Jeff Campbell -- Alliance Global Partners -- Analyst

OK. Great. Ignorance is triumph by technology here. Doug noted that the 2021 R&D investment was significant with the lean mean machine development apparently well along.

Do you expect a similar R&D spend in 2022? And if it's possible, will the trend continue in 2023? Or do you think it will moderate?

Mark Frohnmayer

Well, I think when -- I guess I would say to that is that the R&D spend of Arcimoto -- the actual -- the spend of Arcimoto as a whole relative to the industry that we're in, the problem that we are trying to solve and the potential for the products that we're building in the market is so much smaller than any other organization that we see in this field. And yet the yardage that we make continues to -- I would say I think that we are that our accelerating pace and the super cool stuff we're coming up with ways that we are deploying those resources wisely. Now to the point of the Mean Lean Machine, that's actually a very small part of our overall R&D spend, although we do see giant potential for that product. And although you'd certainly have to factor in the acquisition of Tilting Motor Works when you think of the cost of the Mean Lean Machine development program.

But that's a small piece. When it comes to scaling up to mass production, when it comes to developing with partners, our Robo Vale initiative, I think we're going to be continuing to invest in the future and in the mission going forward, likely at levels equal to or exceeding what we did in '21.

Doug Campoli -- Chief Financial Officer

A lot of the investment in 2021 was improving the electronics in the existing FUV vehicle, too, to make it more cost effective.

Jeff Campbell -- Alliance Global Partners -- Analyst

OK. That's helpful. And I just wanted to follow up with a less financial one. I thought the directed technologies pilot in Australia was quite interesting.

I was just wondering if you could speak about the time line there. And also what might be involved in the "eventual homologation" to Australian safety standards that was mentioned in the press release?

Mark Frohnmayer

So I've been on now several calls with the directed team and with some of their customers. And I -- without violating confidence, I can say just the excitement that they've expressed now not just for the Deliverator family, but moving into the Mean Lean Machine space as well has been very high. So we see -- I think our challenge is going to be just making sure that we are able to tune the product family to their requirements. And that we've got a bit of, what's the term, belt and suspenders work on getting the homologation pathway figured out for that market.

I don't have a lot more detail to share other than that we are in very active conversation with them, and we see that as a huge opportunity for Arcimoto, for the Deliverator for the Mean Lean Machine family and that we're super excited about it.

Jeff Campbell -- Alliance Global Partners -- Analyst

OK. Great. Thank you.

Mark Frohnmayer

Do you want to add, Jesse?

Jesse Fittipaldi -- Chief Strategy Officer

I just -- a little bit more add to the ATVM maybe. I'm seeing some chat stuff in there. There might be some confusion of what the ATVM LP funds can be used for. That program is for scale.

And what Arcimoto has done really well over the last two years is organically growing the company in a way that we think we can achieve success on our -- mostly on our own and use the funds of the ATVM to build out the factory and scale from there. So that is -- those funds get used next year. So again, to Mark's point about the mission is a successful application to the ATVM LP and the DOE program so that we can show them we have a really good plan and that we can execute something that program was intended for. And with adding people like Kevin on the team and getting his knowledge and understanding about how fleets work and how we might be able to pivot the company in a little bit here and there to have a better plan has been what we've been working on.

So it has been getting worked on. There is a lot of documentation that we have in the works and ready to submit, and I'm feeling really good about where we are with that. So a little bit more time is worth it, and I just -- this is going to be good.

Mark Frohnmayer

Thanks, Jesse. And I understand that as we progress along, we are certainly a learning organization, and we adjust accordingly to hit the plan that we think is going to be best to achieve the mission. And I'm going to go ahead and leave it at that and wrap up the call, but just to say, once again, we -- Arcimoto would not be here without the support of our stakeholders. You all have brought us from a napkin sketch to a production vehicle operation with, we think, global impact potential, a product family that is world-class in terms of environmental efficiency footprint, utility, and certainly the fun factor.

And we -- yes, I just want to say thank you again to everyone out there who has continued to push us along, continue to fight with us. So yep, you guys have a fantastic rest of your week, and we will see you next time. Cheers.

Duration: 51 minutes

Call participants:

Mark Frohnmayer

Unknown speaker

Kevin O'Rourke -- Vice President, Commercial Strategy

Doug Campoli -- Chief Financial Officer

Jesse Fittipaldi -- Chief Strategy Officer

Barry Sine -- Spartan Capital Securities -- Analyst

Mike Shlisky -- Colliers Securities -- Analyst

Terry Becker -- Chief Operating Officer

Jeff Campbell -- Alliance Global Partners -- Analyst

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