The Wall Street Journal reported that electric vehicle (EV) sales reached a global milestone in 2022, with a market share of around 10% for the first time. Strong sales in China and Europe drove this significant growth.
Despite the market's overall performance, some players are falling behind. One of them is the EV startup Arcimoto, which is said to be on the verge of going bankrupt.
What Happened to 3-wheeled EV Maker Arcimoto
The Oregon-based electric vehicle startup Arcimoto has struggled since 2021 when it was valued at $1 billion. The company, famous for its three-wheeled electric vehicles known as the Fun Utility Vehicle (FUV), was once hailed as a more affordable option to expensive electric cars.
The trike design, which was classified as motorcycles or autocycles even though they could travel at highway speeds, helped keep prices down when compared to "real" electric cars. Still, it never seemed to translate into the kind of demand that Arcimoto had envisioned.
According to Electrek, the company hoped that reaching mass production would lower the price to $12,000, but despite grand declarations, that mass production never occurred.
The company has faced financial difficulties due to this and its pricey US-based production. Arcimoto relocated to a more extensive production facility last year but is currently forced to halt production due to a lack of funding altogether.
Over 100 employees were let go and placed on leave last year, but Arcimoto could no longer maintain the company's costly US-based production.
According to OregonLive, the company produced only 252 FUVs in the most recent six months for which Arcimoto reported results and delivered only 115 to customers.
Meanwhile, Arcimoto reported $2 million in revenue for the third quarter, which ended in September 2022. During that time, the company lost $17 million.
$12 Million Public Offering
Arcimoto announced the sale of $12 million in stock at just $3 per share, or less than half of the stock price at the time, as a desperate effort to secure funding.
Due to this, the stock price fell, and the company later stated in a regulatory filing that without funding, its future was in jeopardy and that it would have to stop operating and/or file for bankruptcy.
According to Electrek, Arcimoto's share price on the NASDAQ fell to just $2.48 by the time the market closed the following day, despite the fact that it had closed the previous day at $6.21 per share.
Uncertain Future
Arcimoto was working on a new three-wheeled micro-mobility vehicle to improve the stability of more traditional electric bicycles, but the project's future is uncertain due to the company's financial situation.
This highlights electric vehicle startups' difficulties and the need for sustainable business models. Arcimoto's financial struggles show that developing and manufacturing affordable luxury electric cars is difficult and expensive.
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