Atlis Motor Vehicles, an electric vehicle startup based in Mesa, said Tuesday that it had gained conditional approval from the Nasdaq Stock Market to list its shares, but public financial documents show that company still faces several hurdles before reaching production.
AMV, which was founded in 2016, is still years away from putting one of its electric trucks on the road, according to a filing with the Securities and Exchange Commission dated August 26.
The company predicts it will need an additional $418 million over the course of four years to finalize its prototype, obtain regulatory approvals and scale production before reaching profitability. To date the company has raised about $32 million.
“Uncertainty exists as to whether our business will have sufficient funds over the next 12 months, thereby making an investment in Atlis speculative,” the company wrote in the filing.
If the company completes the Nasdaq’s listing requirements, it will trade under the ticker symbol “AMV.” The company originally announced its plan to go public in May.
“We have been working with the team and collaborating with our many investors to reach this important inflection point,” Atlis CEO Mark Hanchett said in a Tuesday statement. “We are looking forward to closing our Reg A+ financing round very soon, and to listing on the Nasdaq exchange. We are grateful to those who have supported us along the way to this incredible milestone and continue to strive to provide value for our current and future shareholders. Going public is an important step in our quest to realize the Atlis vision.”
Starting with a grand vision
Hanchett founded AMV in 2016 with a grand vision of becoming the next electric vehicle luminary, offering its own electric battery cells and packs, rapid charging stations and pickup trucks designed to weather rugged work environments.
Other EV startups, such as Tesla and Arizona-based Nikola Corp., rely on other companies to provide the critical battery cells.
Six years after its founding, AMV claims a self-determined valuation of $1.9 billion, according to its fundraising website. There has been no independent valuation of the AMV shares, the company wrote in the Aug. 26 filing.
“Any valuation of Atlis at this stage is pure speculation,” the company wrote in the Aug. 26 filing. “Atlis’s business success, timeline, and milestones are estimations. Atlis’s production projections, sales volume, and cost models are only estimates. … All such projections and timeline estimations may change as Atlis continues in development of a plug-in electric vehicle, charging station and manufacturing facilities.”
The company is still developing its flagship Atlis XT pickup and has not yet started production, according to the filing. In the photos below, the company presented an early prototype of the XT at an unveiling in September 2021:
The startup has historically relied on crowdfunding to finance its operations, raising more than $32 million from more than 20,000 investors. As a comparison, other EV startups — including the likes of California-based Rivian and Lucid Motors — raised billions before starting production.
AMV set ambitious goals while raising that $32 million, including writing in a summer 2020 SEC filing that it was aiming to build 1,000 vehicle base frames, (basically the chassis with battery and wheels) and 100 of its XT trucks in 2021 and another 4,000 frames and 1,000 XT trucks in 2022.
The following summer, the company lowered those projections in another SEC filing, to producing 50 frames and 150 XT trucks in 2022, a goal that has still proved unattainable.
In its most recent annual report, filed on May 16, AMV scrapped specific production targets and instead said it expects to produce trucks for delivery and sale by 2024, three years later than its original rollout plan. That timeline has since been bumped back even more in the August 26 filing.
‘Hurdles are vast’
Analysts who closely follow the electric vehicle market told the Business Journal in interviews this summer that any electric truck startup looking to penetrate the consumer pickup truck or utility truck market that is still years away from commercial production faces an uphill battle.
Ivan Drury, senior manager of insights with California-based Edmunds, said that besides the in-house production issues faced by EV makers for the vehicles or the batteries needed to power them, a smaller company doesn’t have the same scale as big EV companies for securing supplies of computer chips, not to mention the lack of a repair network.
“The hurdles are vast, but the potential rewards are amazing,” Drury said. “It took a long time for Tesla to become the only vehicle in a driveway.”
As for the electric truck market, Drury said that with Ford and GM getting into the game, they can bring plenty of marketing and production muscle to bear.
“Look at Rivian. Even with as much money as they have behind them, and getting advice from Ford, they’ve still stumbled,” Drury said. “With EVs it’s not just important being first, or second or even third to market. Everybody has to one up each other. So with [the electric] Ford 150 and the Silverado coming with a lower pricepoint, that’s pretty amazing.”
Facing stiff competition
Kevin Tynan, new vehicle and auto part manufacturing senior analyst with Bloomberg Intelligence said the U.S. auto industry is focusing on trucks due to one simple factor: Each truck unit is far more profitable than a passenger car.
“Most of what Ford is selling now is light trucks and Mustangs. The future in the U.S. for automakers is trucks whether electric or internal combustion,” he said.
Still, building electric vehicles in 2022 is still not profitable compared to cars with internal combustion engines or even hybrids.
“It doesn’t matter how much the consumer wants electric vehicles. [The automakers] simply aren’t building them at this kind of scale. Tesla may dominate but it’s still only 3% penetration of the market. To get to 5% or 10% or even 20% it’s going to be Ford, GM, Stellantis, VW, Hyundai and Kia. And they aren’t catching up to the wave; they are the wave,” Tynan said.
“It all has to get to scale. This isn’t a margin business,” Tynan added. “If you’re a pure-play EV company and it’s going to take you three, four, five years at this point to produce 100,000 vehicles, that’s troubling.”
Indeed, Atlis conceded in its latest SEC filing that it faces plenty of competition.
“We face significant barriers in the development of a competitive EV in a crowded market space. Incumbents, also known as legacy manufacturers, have substantially deeper pockets, larger pools of resources, and more significant manufacturing experience,” the company wrote in the filing. “There is a chance that other competitors may release similar full-sized electric trucks before we exit the research and development phase. If several competitors release full-sized electric trucks before Atlis, it will be exceedingly difficult to penetrate the market.”
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