Three-wheeled EV manufacturer Arcimoto has been having a rough go of it.
Shares in the company took a dive in mid-January after it was announced that the company had shut down production at its Eugene factory due to a lack of funds. In an attempt to raise the necessary funds, the company moved to sell $12 million in additional shares at $3 each, which was less than half of the previous day’s closing price. As a result, the stock plunged nearly 60% in morning trading, to just $2.51.
In a regulatory filing accompanying the stock offering, Arcimoto warned that it will require substantial additional funding to resume production. The company also warned that financing may not be available on any terms, and if not, “we will be required to cease our operations and/or seek bankruptcy protection.”
Arcimoto makes a three-wheeled electric motorcycle it calls the Fun Utility Vehicle, or FUV. In 2021, the company had briefly been among Oregon’s most highly publicized young companies, and it had a market value that peaked over $1 billion – however, it’s now valued at less than $7 million.
Arcimoto struggled against supply chain issues as its new factory opened last year, and its FUVs have struggled to find a mass-market appeal. In an effort to cut costs, the company laid off 50 and furloughed another 66 employees last fall. However, this wasn’t enough to keep the company afloat. Further financial reports revealed that the company’s bank account was frequently near empty and that it had to sell additional shares to remain operational, thus reducing the value of existing investors’ shares.
The company has also faced internal turmoil. Last year, the company abruptly replaced founder and CEO Mark Frohnmayer after his arrest for driving one of Arcimoto’s vehicles while intoxicated.
The company produced just 252 FUVs over the most recent six months for which Arcimoto reported results and delivered only 115 vehicles to customers. For the third quarter, which ended back in September, Arcimoto reported $2 million in revenue while the company lost $17 million during the period.
In October, Arcimoto said it was seeking “strategic alternatives,” which probably means that business will go up for sale. However, the rapidly dwindling business hasn’t found a buyer yet. With the company’s future uncertain, it remains to be seen what the next steps will be for Arcimoto.
SOURCE | IMAGES: OREGONLIVE, ARCIMOTO
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