€50 million ($55 million) has to be secured by the end of this year.
Sono Motors announced today a community funding campaign to raise some €50 million ($55 million) within 30 days and basically stay in business.
The German start-up planned to introduce its solar-powered Sono Sion electric car on the market in the second half of 2020, but now the timeline is September 2020, almost two years from now!
One would ask, what happened? Well, Sono Motors is learning the hard way how capital-intensive the automotive business is.
Initially, the company was planning to go with traditional investors, but it turned out that they have “entirely different goals” than Sono. The necessity to change the strategy emerged.
Here is how Sono explains the situation:
“In the past, the company’s high capital requirements meant that international investors in particular played a major part in its financing strategy. However, in advanced negotiations with a number of potential partners it became increasingly apparent that Sono Motors’ long-term corporate strategy could not easily be reconciled with the interests of traditional investors. A departure from the company’s vision and an outflow of technologies and patents and ultimately the end for the forward-looking concept of the Sion would have been the result. The decision to no longer pursue the previous strategy and the termination of the corresponding talks requires the acquisition of new financial resources and postpones the production of the first vehicles into September 2021.”
Sono Motors Sion
Laurin Hahn, CEO and cofounder of Sono Motors said:
“We realized again and again over the past few months that we have entirely different goals to traditional financial investors. Aggressive growth and quick profits are difficult to reconcile with a sustainable corporate and vehicle concept which is designed to give access to affordable and eco-friendly electromobility throughout. In addition, providing start-ups that have a capital-intensive business model with venture capital does not work in Germany, neither in the initial stages nor at the growth stage. Had we relied solely on funding measures or the German market environment, Sono Motors would probably not exist in its current form. Urgent action is required from the politicians in this area. It should be possible to implement such a future project in Germany and lead it to economic success. We will continue to fight anyhow. For climate-friendly mobility and for our reservation holders,”
Jona Christians, CEO and cofounder of Sono Motors said:
“We were torn between our pledge to the community and the investors’ demands and were increasingly moving away from who we really are, which is something we absolutely had to correct. Social responsibility and climate protection would otherwise have fallen by the wayside, and so would all that we stepped up for. We are now focusing on continuing to fund our innovative vehicle concept together with people who want to see the Sion on the road. Together with a community that asks for a company which acts responsibly, critically questions itself and can be judged honestly on the basis of the statements it makes,”.
To convince potential customers, founders are promising transfer of “future profits” to reservation holders:
“With the start of the campaign, the company founders are transferring their remaining shares of the profits to a Community Pool and transfer future profits to today’s Sion reservation holders. They are therefore passing up their personal profits, but will keep their voting rights in the company. This ensures that the company’s objectives continue to be realized and that the Sion can be produced sustainably without any changes to the concept. The founding team currently holds around 74 percent of the company’s shares and 64 percent of the profit participation rights.”
So far, the company received more than 10,000 paid reservations, which in Spring was estimated to be worth €214 million ($239 million) in terms of potential revenues.
Interestingly, according to the press release, the capital from the funding campaign “will then primarily be invested in production facilities for prototypes of the first solar electric vehicle (SEV): the Sion”, which does not make us sure as to whether it will be enough to produce customers cars too.
In 2020 and 2021, the market will be flooded with a new wave of electric cars available in high volume, we are now extremely cautious about the future of Sion.
Sono Sion specs:
- about 35 kWh battery
- 255 km (159 miles) of range (WLTP) – simulated
- solar panels provide up to 34 km (21 miles) of range per day at peak performance
- 120 kW and 290 Nm electric motor
- 0-100 km/h (62 mph) in less than 9 seconds
- top speed of 140 km/h (87 mph)
- 50 kW DC fast-charging capability and 11 kW three-phase on-board charger
- towing up to 750 kg
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