Good afternoon, everyone, and welcome to Arcimoto's Q1 2022 stakeholder update webinar. To start, I wanna 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 we cite in our SEC filings. Today's format is going to be a bit different from prior webinars as we have a lot of ground to cover, including the introduction of the two newest members of the executive team. We are going to save the analyst panel for the Q2 webinar. We've folded answers to many of the questions that came in over the Say platform, and we'll take a few more at the end of the call as time permits. Here we go.
While we usually start with a long form video update, in the interest of time, I asked Carl to compress the last decade and a half into 30 seconds of video narrative. After that short intro, I'm gonna give a little bit of founder's perspective, talk about the leadership growth, financing, and the focus of our many shots on goal strategy into our first shot for the win plan for scale, followed by a factory update from Terry, the introduction of Dwayne Lum, Arcimoto's Chief Product Officer, Lynn Yeager, Arcimoto's Chief Experience Officer, and a Q1 financing and future look update from Doug.
Arcimoto. We build light footprint, outrageously fun electric rides to transform how we live and move. Two platforms, many shots on goal. Daily driving and rentals, delivery and security, and the most advanced e-bike class vehicle in the world. A quad motor tilting trike that flies the road like no other and can be recharged while stationary. We've been producing for two years, and it's time to ramp it up to mass production and deliver on the Arcimoto endgame of the RoboValet and a sustainable transportation system for the world.
All right. Short and sweet. I just wanna give you all a little bit of founder's perspective. I said it, Ramp It Up, and I'll say it again. Arcimoto is an ultramarathon being run by a 270-strong team who wear the brand and a whole host of critical industry partners powered by a community of stakeholders with whom we share the vision of a truly sustainable transportation system. Our pace continues to accelerate, and I wanna start by thanking each and every one of you for all of your hard work and support over these last 14.5 years, and for your continued commitment to finishing the run. I have been asked on a number of occasions, what is the biggest challenge for Arcimoto?
To be clear, building an EV endeavor from prototyping to get the right idea through product development, regulatory compliance and initial production to constructing the right business models and scaling approach is an incredibly difficult and complex undertaking. While each of those elements provides a significant challenge, perhaps the biggest challenge from my vantage point is one of leadership. Making sure that all of us are rowing in the same right direction, even as we take on more in parallel and dramatically expand the team. That's why, just as an anecdote, I am pleased to report that Friday, I had the best executive meeting in the history of Arcimoto, and I believe that we now have the right top-level leadership in place to accelerate through the next big steps of the company's growth. See this as a result of a few things.
Our focus on building a winning culture, defining and enhancing our shared values paired with a deep focus on process, how we communicate and work together across the organization, and the recruitment of incredibly talented veteran industry executives focused on each of the key initiatives that are driving the path forward. We introduced Kevin O'Rourke, our new VP of Commercial Operations and Strategy, on the last call, and we'll be introducing two more, the newest members of our executive team during this call. Before I get to that, a lot of the questions that came in were related to the financing of the venture. I wanna clarify and further expand on some of what we talked about last call.
A number of you have been looking for more answers, so I thought I would further clarify the approach. With partners, Arcimoto has put in place a multi-pronged financing strategy for growth. The foundation of this approach is the at-the-market facility we put in place with Canaccord Genuity at the beginning of the year. This ATM allows the company to sell shares into the market at the current market price. This foundation allows us to access liquidity at will, at times we think are favorable to the company and to our stakeholders, as well as avoid the toxic financing structures that are endemic to the microcap market.
The next piece is the long-term convertible structure we've put in place last month that allowed the company to onboard additional capital on terms we believe are favorable to the company and to our stakeholders, and it introduced no near-term dilution to shareholders. The final piece of our near-term capital formation strategy is a program we call Project Ascent in collaboration with Ducera Partners. Ducera is a leading investment banking advisory practice that has advised more than $750 billion in transactions since its founding in 2015. Arcimoto's Lead Independent Director and Ducera partner, Joshua Scherer, has been on the Arcimoto board since 2018 and has helped guide the company through incredibly turbulent times and growth from a pre-production vehicle startup to where we stand today.
Members of the Ducera team have been long-term investors in the company with real skin in the game. Ducera will be leading the approach we articulated on the last call to put in place the right funding mechanisms for the long-term growth of the company. Specifically, we are aiming for the right tools for the job. Debt financing for real estate, real estate improvements and capital equipment, fleet financing for Arcimoto-owned vehicles, and long-term equity with strategically aligned partners. Longer term, as most of you know, we are further targeting the federal government's Advanced Technology Vehicles Manufacturing Loan Program for additional financing of the mass production of the fully enclosed two-seat consumer Arcimoto vehicle, and are in the pre-application process for what we believe will be our final application to this program.
As we discussed on the last call, we see the ATVM funding as being appropriate for the acceleration of scale starting next year. The preparation for this overall capital formation strategy has involved an incredible amount of work on the development of the mass production plan for the company, as well as market research and our commercialization approach. I'm very excited about the opportunity we have crystallized. One aside related to the capital structure of the company. As a matter of best practices, Arcimoto has engaged a compliance-driven SaaS provider to track and monitor its shareholder ownership and trade settlement. We wanna make stakeholders aware that ownership and settlement analysis over nine months suggests there are sizable and persistent settlement fails and imbalances in Arcimoto's stock.
We have identified a handful of banks, broker-dealer and clearing firm participants that feature the most persistent and significant settlement imbalances, and we've begun a communication strategy to both alert these firms and request explanations for and resolution of these imbalances. Moving on. As many of you are aware, Arcimoto's core product strategy revolves around our unique EV platform that packs significant carrying capacity on a lightweight, small footprint foundation that shares the vast majority of its parts with every variant of that platform. As we laid out earlier this year, the key to achieving platform scale, first and foremost, is to make the platform itself more scalable, an initiative we call 1.X. We are on track to have the first 1.X prototypes on the road later this spring, focusing first on ride, suspension and steering.
I want to acknowledge all of the hard work done by the Arcimoto team and our critical industry partners, Munro & Associates, Stoffel Systems, DWFritz Automation, and our many supplier partners to help us hone in on this winning scale three-wheeled EV platform for the future. The second piece of the push to the next big step up in scale is a focusing of our many shots into a first shot for the win approach. The discussions we are presently engaged in with leading fleet management companies and large scale commercial clients that are operating with global footprints lead us to believe that the Deliverator is the correct focus for this first shot. The rapid growth of the last mile delivery market, coupled with the fleet mandate for environmentally responsible products and the unique characteristics of our product further confirm this approach.
To that end, I'm very pleased to welcome and introduce Dwayne Lum, Arcimoto's Chief Product Officer, who is driving this first shot on win effort to bring the Deliverator to scale production on platform 1.X. Dwayne, welcome to Arcimoto.
Thanks, Mark, and thanks to all of the stakeholders for your continued support. In my many years of product and product development across a number of industries and customer segments, I've learned that ideation and innovation are not synonyms. The former deals with the generation of ideas, while the latter deals with their implementation, and the object of innovation is success. Whatever the goals of a business may be, it must make money. To do that, it must get things done. Ideas do not implement themselves, people do, and it takes an organization with know-how, energy, daring, and staying power to implement those ideas. I believe at Arcimoto we have these ingredients, and it's incumbent upon us to deliver the right mix to the company to take the company to the next level, and we are.
My colleague, Kevin O'Rourke, mentioned on the last earnings call, and Mark just called the first shot for the win by tailoring our products to suit the needs of business customers. We can offer commercial customers a substantially lower vehicle acquisition cost, decrease in annual vehicle maintenance, eliminate expensive fossil fuels, and increase their bottom line. For many of our current owners, this is also true. As we enhance our product mix, add capabilities, reduce the cost, and develop new platforms, we will intensify the use of our product lifecycle thinking. We'll leverage market-based instruments and improve professional service reliance, as well as enable other key strategies. Arcimoto set forth on a journey to change the way the world views sustainable transportation. Let's revisit something from our Ramp It Up event.
With the same material, and in some cases, cost consumed to produce one conventional vehicle, we can produce eight FUVs or 100 Mean Lean Machines. We're not only materially benefiting customers' bottom line, we're right-sizing the footprint of transportation while doing so. How can we build on this? Well, without disclosing future product plans, that is, no matter the business, there's common critical factors in the most successful product development processes. One, product development is a team game. We're leveraging interdisciplinary teams to focus on our development efforts. Two, process is key. We're applying the use of structure to order and discipline the ascension from ideation to development and launch. Three, speed to market. Agile practices help us produce new and marketable products more rapidly, often making the difference between profitable and non-profitable activity. Lastly, number four, listening to the market.
During all stages of development, we will engage directly with those who can influence our direction the most. At the moment, we're actually acting on some of those key inputs with a strategic cost-down initiative enabling us to offer our products at a new price point and serve even more customers. Taken together, these four disciplines will help Arcimoto deliver great product experiences to the variety of customers we can serve. I appreciate your time today and look forward to expanding on our drive to innovate in the future venues that we have. Thank you.
Thank you, Dwayne. Very glad to have you on board. In just the short time that you've been here, we've continued to see an acceleration on the product development front, and I think we've got great things ahead. Wanna shift gears from the future to the present moment and our current product family, specifically focused around our maturing fun utility vehicle and the push to really hone in and streamline the customer experience from, you know, when you first hear about an Arcimoto all the way through all of the touch points to trying it, buying it and taking care of it over time. I'm very pleased to introduce Lynn Yeager, who comes to us again with deep industry background and expertise.
Lynn is now. I see behind you our San Diego rental and experience center. Lynn, in just a couple of short weeks, has already made a significant impact on our customer experience processes, and we expect that pace of awesomeness to continue. Lynn, say hello to our stakeholders.
Thank you, Mark. I'm very grateful to be on the team. We have a really talented group of individuals here at Arcimoto. I wanted to just give a little bit of background on my career a little bit. I've spent the last 20 years or so in a variety of sales and client experience leadership roles, specifically within the automotive space. I spent a few years back in Tesla in 2016 through 2019, with a few different roles leading our sales and operations strategy for West U.S. I was director of sales for California, Hawaii, and also leading our global retail performance, which was our engagement strategy, leading programs to support scaling the organization towards the launch of Model 3. My focus and my role here is really gonna be around evolving our brand experiences from all channels.
As you can see, I'm in an experience center right now in San Diego. That will be basically from building out the thoughtful customer experience that we have now to scaling that from first engagement all the way through to delivery, being very strategic in how we reach our customers and how we sell our products. We are currently expanding on our channels from rental to drive experience and also the way that we engage in the holistic brand approach for Arcimoto. I sort of see our product having five different channels. We have our, you know, our individual consumer channel, we have our commercial, we have small business. We also have the rental piece of it, which is another revenue stream, as well as a really fun and recreational piece that sort of ties all that together.
You know, as Mark said, we're really challenging the way that people think about moving around. Right now we are trying to look at how we will expand and drive demand to scale our business, you know, getting from a few hundred deliveries to a few thousand deliveries and beyond, and sustaining that growth as we go. We currently have an experience center in Eugene as well as San Diego. We have a few rental partners spread out through Florida as well as California and Oregon, and we are also gonna be opening Hawaii, coming up right now. We're in the process of launching Hawaii as well. Shortly to come after that, we will be launching engagement in sales in New York. I'm, again, very excited to be on the team.
I truly chose to come here for two important reasons. One, the quality of products. I think we have an incredibly thoughtful platform of products that really reach multiple different applications for customers and really the people. This is a really talented organization, and there's such a fun aspect of our product to really reach multiple different types of client profiles. Thank you again. Appreciate everybody's time.
Thank you, Lynn. Before we dive in, I just wanna explain a little bit. The reason why Friday's executive meeting was the best one I'd ever had is 'cause I got to sit through two hours of people smarter than me in every single piece of what we're doing at the company and watch as every problem that I thought I had the answer to got said before I could get it out of my mouth.
It was truly awesome to sit around the table with both the grizzled veterans that we've had at Arcimoto that have been tested through year in, year out, push from startup to public company, getting ready to build at scale. Bringing in industry veterans in both automotive and adjacent fields that have filled in the gaps in such a phenomenal way. You know, I have great expectations for where this team goes. Switching gears once again, Terry, are you live there? Can you. You're in the factory. What's going on with production now?
Good afternoon. I'm the roving reporter today. Welcome to the Ramp. This is our final assembly plant, where we do the final assembly of the parts and pieces that we make in our fabrication facility and our battery facility and vacuum forming, machining. Those parts come here to the Ramp for final assembly. I'm on the line which is in full motion, 18 stations of people putting together the FUVs. We're at a rate right now of four per day. By the end of the month, we intend to go to six per day, and then toward the end of the year, we will actually double that and do what we need to do to hit our 1,000 for this year. These guys are stellar. Super proud of these folks that are putting these vehicles together.
It's good to be in motion. The river is flowing. I wanna give a shout out to all these people that are just doing a great job.
Awesome. Thank you, Terry. Great work. Doug Campoli, CFO, would you like to share your perspective on the growth of the finance team, some of the milestones and wins we've got, and then, just to look at Q1 through what we expected versus what we did?
Thanks, Mark. Q1 FUV sales revenue was a half million dollars better than planned due to manufacturing completing the move to the ramp and getting back into production faster than anticipated. We believe this puts us on target to achieve our full-year production plan. As we look to exit emerging growth status at the beginning of 2023, I'm very pleased with the growth of talent on the finance and accounting team and their abilities to successfully navigate tighter reporting deadlines and SOX compliance. As part of this growth, on April 26th, we announced the engagement of Deloitte with their global talent presence as Arcimoto's independent external auditors. We wanna thank dbbmckennon, our prior auditors, for guiding Arcimoto from a private startup to a public production company.
As of this Q 1 10-Q, Deloitte is on board, and we believe they will guide Arcimoto's growth to becoming a global manufacturer. Back to you, Mark.
Thank you, Doug. I'd just like to echo that thanks to dbbmckennon . Those guys have been with us from before we went public through present moment. They've helped guide us as we have grown from a team of 20 in a small design studio to a sprawling footprint manufacturer, and it's been fantastic to have them on the team. Likewise, to welcome Deloitte as our auditing partner, a team that we believe can be with us through the foreseeable future as we grow to scale and a more global footprint. Before we dive into Q&A, Jesse Fittipaldi, do you have any thoughts that you'd like to share with all assembled?
Hey. Thanks, Mark. Yeah. Now that we're coming out of COVID and people are starting to be able to visit the factory, I've. It's hard for everyone out there that isn't able to see truly what we've created. I gave a tour two weeks ago to an international team, and when they came out of the tour, their statement was, "This is what American manufacturing looks like." I was really struck by that statement because usually we hear how good our product is, and we give the test drives, and people get in it, and they get out, and they're like, "That was super fun. I love it.
To give the tour of the facility that's creating the product and for folks that understand what it takes to get to where we are, to have them come with the answer that we are American manufacturing is a dream come true for this team. Just wanted to share that, and strongly recommend getting out here and doing a tour to see what we're doing.
I'll echo that. Both Jesse and I have had the opportunity, particularly as we've come out of the Omicron wave, to play host to a number of our significant partners, potential partners, potential customers. We've almost become desensitized, I think, to the joy factor of people experiencing the ride. It is very heartening to see just the level of stoke from people who have walked through Arcimoto's facilities, getting a very close look at what we are doing on the ground, and just the reality of our present and future plans.
This has been very gratifying. One of the reasons I'm off the road for the foreseeable future is that for the next coming months, we have a large stream of folks coming our way, to see what we are doing and how we're doing it, and look forward to sharing with you all the full Arcimoto experience. With that, let's go ahead and open it up to Q&A. Thank you all again for being here. We'll take at least a handful or two of questions before we wrap it up.
All right. Looking at the questions on Say, I just wanna make a note that some of these were addressed in the comments, so particularly around funding. If you don't see that question or those questions in particular are answered, then invite you to go back and take a look at the comments that Mark gave at the open. Let's see here. What is the biggest concern currently in achieving mass production for any of the Arcimoto products?
I would say again that the biggest challenge that I've seen on this space is one of leadership, and that gets bigger, the bigger the team gets, the bigger the problem we're trying to solve gets. But when it comes to the specific development challenges, it is, and again, Leadership is kind of a fuzzy word, but it is getting all of the various initiatives that we have. 1.X includes major changes to the drivetrain of the vehicle, a new the ability to integrate a new battery system, changes in the hard points for where we mount the upper chassis and so on.
Getting all of that to be a cohesive plan and effort that is moving along on all of those fronts at the same time is that coordination puzzle, to me, the biggest challenge in the push to scale. On the other side of that is making sure that we have the facilities moving forward in the same manner. It's a monstrous challenge, and it really is only by having a truly excellent team on board, all aligned around values. I would say the other side of this is just the incredible work that the Arcimoto team has put in on process development.
We are aiming for Arcimoto in a box, which is not just the product, but the production plan for the product and our product family, so that we can more easily replicate our production facilities both domestically and internationally. It's a huge amount of documentation, communication, development, and we are by no means done, but making very good headway on that front.
Next question: Is Arcimoto currently running one, two, or three manufacturing shifts to meet demand? If not, how do you expect to hit 7K production? Not sure if they're asking exactly about demand of the product or about our plans to get manufacturing more efficient, but go ahead.
The 7,000 target is next year's production target. The target for this year, 2022, is 1,000 units produced, which again, is like triple what we did last year. Terry, to that point, I believe we're on one shift now and moving it to two shifts over the summer.
Yes. We're one shift now. We'll be to two shifts toward the third, late Q3 in order to meet 1,000 vehicles. The other thing to know here is the fact that we've put together a line that has enough stations that as we pick up speed, we simply put more resources into the stations and make the line go faster. We won't have to rearrange the line, the final assembly. We do have in the plan everything it takes to ramp up the fabrication of the parts that feed the line. That's how we'll be ready for next year.
Excellent. There's a question here about battery technology related to recent repackaging. Does it have any improvements associated with it? Can you speculate on new improvements coming down the pipe?
We've actually got multiple battery initiatives underway. The first is essentially the present module design that we use required certain tweaks for a form factor change in the pouch cell that we use, as well as some changes to the interconnects. That first set of modules is now through testing and compliance and is being assembled into vehicles that we're shipping out of the door today. That work will continue through this year. There's a longer-term process which we talked about very briefly at Ramp It Up, which is our new cylindrical cell packing architecture to use the common form factor 2170 cells, the canned cells, and in our packs from.
This is, we've developed what we think is an incredibly flexible, low cost, high volumetric energy density and thermally safe packing architecture for 2170 cells that will scale from all the way from the Mean Lean Machine up to very large vehicles. We have teamed with a company called DWFritz who are automation experts to work with us to design the automated mass production of those battery modules and packs. That program will not come online until next year, and that's part of the overall 1.X development effort. It is in place to give us flexibility on form factor, flexibility on in terms of range optionality, and supply chain redundancy for what is arguably the most critical part of an electric vehicle, the thing that provides the juice.
What progress is made in scaling partnerships with market leaders in food and goods delivery?
Say that one more time.
Progress made on scaling partnerships with market leaders in food and goods delivery.
You might have seen the JOCO pilot announcement this morning. Beyond that, this is stuff that we have alluded to now over a couple of calls, conversations that we are having with some major players in the delivery space. Particularly what we're aiming to get in place in the near term is fleet management for Arcimoto vehicles. This is financing, you know, sort of that what Kevin O'Rourke talked about on our last call, which was comprehensive turnkey solution for fleet adoption of Arcimoto's fleet products.
That's everything from financing, so being able to lease by the month instead of having to eat the sticker price up front, through turnkey solutions for service, for fleet management applications for the users themselves, and really providing robust packages for fleet adoption. This is something I expect that we will have a lot more to talk about in the near future.
When can we expect further expansion in the U.S., specifically states like Texas, which should be a huge market for the FUV?
Lynn, would you like to talk a little bit about the rollout approach and the opening of new markets? I believe we've got.
Sure.
Lake coming very soon and then some more on deck.
Texas is a special state for me, too. I'm very excited once we are ready to go into Texas. Our plan is to ensure that when we do launch in a state that it's very strategic in our approach to our engagement, as well as what our logistics and delivery experience looks like for our customers, ensuring also that we have it mapped out with service, so your ownership experience is well thought out as well. Right now, our focus is currently on the states that we're already open in and making sure that we're reaching all of those markets within the densities of the states like California, launching more formally in Florida, as well as scaling throughout the West Coast. We are opening up Hawaii, which we're in the process of doing now.
We will have an experience center there, which essentially will be a hub for a rental center experience delivery to really focus on the holistic market approach. Rolling out in New York after will be the next state that we go into. In relation to Texas, we don't have an announcement on that just yet, but rest assured that when we do launch in a state, it will be very well thought out and make sure that the entire experience from the beginning to ownership is planned.
Awesome. Looking forward to it.
There are a few product update questions asking about full enclosure, update on MLM. Can you give any updates on those fronts?
Sure. Full enclosure will be a part of both our first shot for the WIN program in terms of our delivery fleet solution. That is a requirement that we intend to deliver first in that form. Then likewise, the funding for the Advanced Technology Vehicles Manufacturing Loan Program, that actually requires the production of vehicles that are fully enclosed cab and carry two people vehicles. That will be coming. The full enclosure, if you were at Ramp It Up where you saw some of the photos, we have prototype full enclosure solutions for the FUV product that we have now.
Likely one or more of those will make it into production as an accessory, and that would likely include, you know, our half door solution with some kind of a soft enclosure upper. When we actually get to the scale production versions that land on 1.X, those will be more of a typically solid, fully embodied solution for this customer. It'll be a stepwise process.
From the chat, with the current recessions or slowdown, would it make sense to pursue the ATVM loan early instead of equity dilution?
It really is all about a comprehensive solution. A piece of that will be equity, a piece of that will be conventional debt, we think. The ATVM really rounds it out for the larger scale push to 50,000 units approach. That we see a much nearer term opportunity to go for, you know, towards a much lower scale requirement in terms of achieving cash flow positivity for the venture. That 50,000 number is not to get to profitability, that's to get to real scale and deliver on the mission of the company. We see a much nearer term opportunity as part of what we're calling Project Ascent to fund the company to the point where it can stand on its own feet.
You know, in terms of dilution, I would just add that, you know, I am today the largest shareholder in Arcimoto. I'm a Founder and CEO who's been plugging away at this for a long time. I am very conscious of dilution of our stock. That is, I think, one of the, you know, having a Founder CEO with a chunk in the equation is helpful in terms of really gatekeeping deals and structures that would be really in the bad interest of shareholders. That being said, you know, what I look for are fair deals that trade a component of dilution for the resources necessary to take the next big steps up in scale.
To me, dilution is not, by itself, a bad word. It is necessary in order to grow the company. What is really bad, and we've seen this a lot in the microcap space, are deal structures that can turn into so-called death spiral deals that just wipe out the cap table and totally screw over shareholders. That is something we have avoided and aim to avoid for the foreseeable future.
Also from chat, any perspectives or comments on gross margin as production ramps up?
Say that again.
Any perspective or comments on gross margin as production ramps up?
Ultimately, as we project out, the target for gross margins, and this has been true for a long time, is right around 20%, gross margins for the products at scale. If you look at what we're doing today, obviously we're nowhere close to that, because all of our manufacturing overhead gets baked into a relatively small number of units shipped. As we scale up the number of units that we ship out the door, the portion of that that's manufacturing overhead goes way down per vehicle. Then, of course, you layer in economies of scale in terms of purchasing power for parts that we purchase, and then all the work that we're doing on 1.X to drive out complexity and cost within the vehicle drivetrain.
That's what gets us through those various steps up.
Question in chat about the app update. Any update on the app?
We have no update for you on the app today, but it is something that is very present and that we are chewing away at getting both specified and implemented. I think there are. You know, ultimately, the first version of the app is gonna be pretty simple in terms of just the basic functionality that you need for you know, checking in on service, engaging service, vehicle startup. But ultimately, we see a bunch of cool community features that we wanna put in that we haven't seen done on any other vehicle app. So stay tuned on that front. Again, the target is to have version one of the app available for customers in the fall at the same time that we roll out torque vectoring.
I guess I can add on that front, the team at Stoffel that is working on torque vectoring has just done a phenomenal job moving that program forward. They are targeting being feature complete this quarter. There is a substantial amount of testing because that is drive-critical software. There's a substantial amount of testing we need to do before rolling it out to customers, but that's gonna have a huge impact on the low speed difficulty in terms of steering the vehicle. That also provides the foundational layer for our autonomy program in terms of having the platform be able to be driven by higher level supervisory computers and sensors.
Another aside here is that our partner, Faction, that is the first adopter of the Arcimoto platform, had a very cool demo reel that they shot us a week or two ago. I believe it's out there online on their YouTube channel, but it's the first public demo of an Arcimoto driving with nobody on board, you know, pulling up, avoiding people. That provides the concept foundation for our RoboValet initiative, as well as Faction's driverless delivery vehicle that they're using for B2B delivery. Very cool developments in terms of technology on torque vectoring, on the API foundation, and then the Faction system that sits on top of it.
Can you scale up beyond 1,000 units if demand is there? Maybe you can talk about what goes into that number and how we came to that production number.
Yeah, I'll let Terry and Jesse handle this one. I mean, we have the machine and team in place to scale to 1,000 with minor additional augmentations that are coming on board. Then we have a few more pieces of significant machinery that will be necessary to get to 7,500. This also goes back to sort of the timing and placement of the ATVM. Is that what we have figured out? We believe are the approach that lets us scale to that 7,500 + units without just massive capital spend. With that all, Jesse, do you wanna chime in and then maybe Terry offer a little piece?
Oh, Terry, go for it.
Well, I just wanted to re-mention what I had mentioned earlier. What you saw when I walked through the factory was a factory that has been built out with the number of stations to support 7,500 vehicles next year. At the rate we're going right now, it looks a little slow out there. That's because it's efficient, and it doesn't take that many people to build four vehicles a day. As we go to six next month and then 12 per day by the fall time, then it will look busier. Again, it's efficient. The other thing is the equipment that it will take to bring in the fabricated parts, the painted parts, the powder coating, the vacuum formed body panels, all of that's set up in the other buildings.
That's got people in it, and they're very efficient as well. We're quite proud of what we've pulled off here with the efficiency of the factory.
It's awesome. Thank you, Terry. Fritz, let's take a couple more, and then we'll turn loose.
Sure. Question right here about the rental revenue model. Can you talk a little bit about how that works and how that's set up?
I'm gonna pass that one to Lynn. Lynn is now over rentals and experience are in your court. Let's talk rental revenue model.
Sure. Happy to jump in on that. We have owned and operated rentals set up as well as partner rev share rental. Right now we have eight partners that we're working with as we just launched those over the last two months. Our most important is that they're set up to be successful in the markets that they're in, that we're reaching the utilization numbers that we wanna focus on, so that it's successful for both partners before we scale and start to increase our locations around the states that we're currently already in or launching in new states.
It's really important that when we're sort of scaling our rental model, whether that be, you know, rev share partner or owned and operated, or even for those that have purchased for rentals for their own business, that we wanna make sure that utilization is there and that the operational piece of it is very easy for the customer experience as well.
Thank you, Lynn.
Okay, last question just came in. Are you concerned about the level of short selling on the stock right now?
I would refer back to the commentary near the top of the hour related to the third-party SaaS service that we've engaged that is tracking the substantial and persistent imbalances in the re-reporting on Arcimoto stock, something that we are aware of and we have formulated a strategy to address. This is over and above the actual reported shorting that we're seeing on the stock. You know, I mean, I guess my personal opinion on it, I probably shouldn't share, so I won't. You know, at the very least, I would say, you know, it's we are mission-driven. We believe firmly that we're moving in a smart direction with awesome products.
I'll leave it at that. I did see one other question in there about was MLM question mark, question mark. We will have more for you on the MLM here coming soon. We have the, as I mentioned on the last call, we are presently building the first multiples of vehicles on that new platform. They're looking super cool. So once we get those on the road, we have a lot of very cool stuff to show, that should be in, you know, call it 6 weeks. That's an external target MLM team. You know, the internal target is much less than that. All right. Well, guys, with that, let's go ahead and wrap it up.
Once again, I wanna thank all of our stakeholders, all of our supplier partners on the call, all of our partners on the call and our team, for pushing through very challenging and turbulent times in the world that we all share and getting her done. Thank you all. Have a lovely day.