MemberSeptember 5, 2023 at 9:35 pm
I think the $33,500 for the LE should hold as recently reiterated, barring some significant unforeseen event. Renegotiation of the battery supply contract seems to be a big factor in the ability to do that. I’m assuming at considerable savings to Aptera. Considering all the other contracts should have been executed, I don’t see any good reasons they would have to raise prices considering how EV pricing has been moving recently. Besides, a fair amount of the reservation holders simply won’t tolerate much, if any increase.
MemberSeptember 6, 2023 at 9:28 am
It will be higher, likely substantially. So why do I state that?
First, they have made no attempt to allay that fear. Instead in a previous video when asked they commented specifically how other manufacturers saw increases of 20, 30, and even 40 percent.
Second, they could not even guarantee Accelerator participants a locked in price. You would think as incentive they would. What is fun and I like to poke at is the maximum discount of 5% or $2500 which lines up with a $50,000 price very nicely.
Third, the late switch to CPC group where they spent 9.4m for design, engineering, and tooling and have an open 5m purchase order with.
Look at the exotic car partners CPC has and show me any of them that make inexpensive vehicles. CPC is making the press CF-SMC body components, assembling them, and installing the glass. Those last two points are per Chris during a Tesla Takeover interview.
EDIT: At Tesla Takeover Chris specifically said the body structure cost more, it COST CONSIDERABLY MORE. His emphasis, not mine. They did it for the organic shape they wanted along with safety
Fourth, they threw away a lot of money abandoning the Vista facility in what accounts for less than a year of use. In the EOY filing for 2022 they took a 1.3m impairment for vacating Vista which means before end of year they knew they were out. This was the facility for solar manufacturing (see October 2022 video where they claimed they could produce ten panels a day. This was also where Elaphe would move their manufacturing to. Now they face an impairment of up to 7.5m for breaking that lease early.
So yeah… if they were going to keep the pricing close to what it is they would have been screaming that from the roof tops. That they refuse to answer, likely because they don’t have all the supplier agreements yet if not more, is reason to believe it is much higher.
I fully expect the LE to be closer to 50k than 35k. It makes sense in that there is much more headroom at the higher end of pricing for profits and recouping investment rather than at the lower end.
Will it be worth buying at 50k? Perhaps. I think they have a better chance at appealing to the very wealthy who want an environmental trophy to show off to their friends. They really can push the environmental impact and convince a good number of people that protecting the environment is worth the price.
Plus if they ever get to production they could introduce an entry level model with a much smaller pack, one wheel drive, and reduced tech. After all if it is so efficient and charges by the sun a 12 kWh pack should be sufficient.
MemberSeptember 6, 2023 at 10:06 am
Ironically, you are spelling out the reasons Aptera needs to keep the price (close to) where it is. People who are so convinced they are absolutely right often provide the exact reasons they will not be.
MemberSeptember 6, 2023 at 12:57 pm
If it’s $50,000, they can KEEP IT!
I will not pay that much… NO WAY!
MemberSeptember 6, 2023 at 5:35 pm
-The advertised pricing, except for the LE, was originally published (December 2020) as a part of the reservation configurator.
-The pricing was to generate a 30% margin at that time.
-Inflation has risen (Conservatively) 18% from that time.
– The first 5,000 vehicles (LE) have a fixed price.
– The accelerators will pay the LE price as well as the extra 3,000 purchasers of an LE (This one perhaps shaky) as after accelerators, maybe a price increase for the remaining LEs if better equipped because of the need to pay for extra features).
– Development costs were unexpectedly large and schedule extended do to COVID, Supply chain issues, terrible capital markets, and significant changes in engineering design.
Not facts but null hypothesis:
There will be a price increase for units subsequent to the LE’s to provide an adequate margin for continued operations and expansion. I am sure Aptera will be creative about pricing how much, when, etc. But they will have to raise the price, even if it “Prices” some reservationists out of the market. No company, even a going concern, can hold prices stable for 4, 5, or 6 years and survive. All rational forum members know this even if they will not admit it to themselves or others.
There will be no price increase.
We will let the data (Future announcements) determine if the null hypothesis is disproved, thus validating the alternate hypothesis. In which case I will be happy to eat crow with a smile.
MemberSeptember 7, 2023 at 12:04 am
It doesn’t make sense to change to a high production capacity model only to jack pricing up enough to generate low volume sales.
Quoting an 18% inflation rate and equating it to cost of building or worse yet, final pricing in this case is just overly simplified.
The market will simply not tolerate that kind of sharp increase without a severe reduction in sales volume.
I’d suggest naming an example vehicle model or better yet, an EV that has undergone that type of increase in the same period. I can’t think of one.
The discussion about needing “production” batteries for much of anything besides actual production is a bit absurd to me. Batteries are essentially a commodity and you can certainly crash test a production intent vehicle with any off the shelf 21700 out there. Testing for range is about the only thing I actually care about being tested with the selected battery.
If Production Intent vehicles completed by the end of the year don’t make prospective customers and investors happy or content, then I’m really not sure what would.
MemberSeptember 7, 2023 at 7:24 am
How can you put a Price on something that doesn’t exsist ? im comfortable waiting until the vehicles START moving out the door BEFORE pricing numbers are assigned. The longer they wait the better. Let them FOCUS on getting the vehicle out. we’ve waited this long what’s another 6 months. They are the ones that have these tough decisions to make. Thank You for stating your OPINION. it is THAT and nothing more. The LAST thing Aptera wants to do is pull a Rivian and jack the price up on the 45,000 people that expressed interest and LIKELY INVESTED money into this startup. Aptera is different than any other car manufacturer because they have CROWDFUNDED this whole adventure and are living hand to mouth compared to ANYONE. So, relax. Take a break if this operation is too stressful for you. There is NO WAY Aptera survives the court of public (Reservationist) opinion or ever even makes it to IPO if the vehicle goes up 20 % in Price. Again RELAX. This group has given us an unpresidented view of their world. Let them do their thing. If the vehicle is too expensive for you than i guess Aptera isn’t for you. If its Priced improperly none of us will buy one. THEY KNOW THIS !!! This is my OPINION…….
MemberSeptember 7, 2023 at 7:25 am
Agreed, that they can’t ‘pull a Ford’ and take a loss…even for the 2,000 Accelerator vehicles. So I feel it’s ‘additional’ proof that their cost must be well under the $33,500 less the 5% Accelerator discount.
MemberSeptember 7, 2023 at 10:06 am
Surely they have an accounting system whereby they KNOW what the costs of all parts will be. Maybe it’s so high they are trying to reduce the cost? We don’t know…
But, I think they have the information in their system to Let them know.
They just do not want to tell us…
Is that good or bad? We will just have to wait.
Obviously they have not announced anything that I have missed.
Did not mean to open a can of worms…
Relax and wait…
MemberSeptember 7, 2023 at 1:52 pm
If they do not have all of their major sources tied down, aren’t they taking a HUGE CHANCE by proceeding to get the expensive body parts designed AND MADE?
The most major parts resource agreements must have already been made, leaving only the smaller stuff.
At least I would hope so…
Again, we are their mercy and have to wait until they are ready to proceed.
MemberSeptember 7, 2023 at 5:34 pm
I guess if someone said they would give me a car that would never need refueling for $34k or more I don’t think I would care. That’s called an investment. My children will never pay for electricity nor gas ever again either… and their children… and 50 years from now when the average car is 150K they will say “what would you have done if you could have bought a car 50 yrs ago for $34K that never needs gas or electricity?”… they’d say that was the deal of a lifetime and anyone not buying that car was an idiot. Bitcoin/Coke/Apple/IBM/Tesla anyone?
MemberSeptember 11, 2023 at 2:07 pm
Aptera’s cost to manufacture has been immensely influenced by the lean-manufacturing concepts as outlined and encouraged by fellow investor Sandy Monro.
It is his concept that suggests a ‘general’ battery-pack design that uses cells of different heights largely to differentiate models by range. The cells, available in the 400 mile and smaller are about as standard a physical format as is available. It also happens to be available in a variety of chemistries, allowing potentially advantageous market position for buyers. Just for instance, you could use a lipo batter instead of the more exotic chemistries that maximize range – i.e. a little heavier you have a LFP pack capable of 250 miles range with the NMC variant at 400.
If the cells are the same and the power levels are comparable, the differences in these two packs would be limited to the cells and whatever modifications needed for the battery management software. Heck, you could even do the dual-battery trick I’ve seen proposed that would mix the two types using the LFP battery pack (less energy dense but near unlimited charge cycles) for the first 150 miles of range tapping the lighter-weight, more dense, faster-charging NMC cells for the remaining 250 miles of range for a 400 mile range version.
To me these battery management software innovations are similar to the software IP developed to maximize the solar panel output.
I do think the cost of the SPS body, delivered, is also rather fungible/negotiable. Why would I even suggest this?
CPC is working as hard as they can to spread the benefits of light-weight new materials in large part because they see this kind of construction, with its ability to be placed together by robots) and finished in quantities far beyond the market capability of all the Ferrari’s, Lamborghini and other exotic cars with price tags in the six-figure range.
Said differently, they really, really, really want to raise the bar for all vehicle manufacturing by making CF bodies for the masses. They need a vehicle that brings that manufacturing concept for a mass-market car capable of selling in volume.
By definition, by ponying up to manufacture the entire body including glass, they’re about to put into the world their show car. Further, given the former clientele of exotic car builders who demanded the best, now is the time to cash in on the improved quality, safety and efficiency of this new for the mass-market, material. This is just confirmation of their desire to make Aptera a success. Given their current financial condition – they are pretty well at the center of the EU’s motor valley – they want factories on at least three or four continents; not the single locale in Modena. (The principles, etc. are all looking forward to jet-setting around the world 🙂
That kind of ambition means that a second continent goal will require a total volume to exceed 100,000 completed bodies to justify that kind of expansion.
While one is in this part of the world, you also have to look at Elaphe’s ambitions for their in-wheel motors. They probably thought the Lordstown product would make that happen but that is obviously not panning out leaving them with Aptera as a showcase.
The point being that the top-three cost areas include suppliers who need Aptera to succeed almost as much as Aptera needs to succeed.
Even suppliers like Rousch, Chery and others supplying parts are going to be interested in keeping Aptera happy with pricing as they can literally bid on supplying the sub-assemblies. Historically, these kinds of manufacturers were inclined to be difficult when dealing with new customers because showing anything but a cold shoulder would infuriate the big buyers from the established parts supply companies.
But this whole scenario has changed since the supply disruptions caused by Covid. Today these companies are disturbed by the increase in Chinese dominance in the EV category and are concerned their businesses may be destroyed by the current rapid changes in the market place. I mean what is the likely fate of entities from Nissan to VW?
Given the overall conditions of the market; the unusual likely support for third-party production of the most expensive parts for the product; and the production concepts possible including full re-manufacture of the body that allows full recycling of the vehicle and its sub-assemblies and even re-manufacture of sub-assemblies by the contracting agents.
The point is that given these general market conditions, I don’t think it is impossible that Aptera, in its introduction to the public, may actually be brought to market at a lower price than originally announced. It they can lower the price – and the proof will be known about that sooner than later – they ought to as that counter-intuitive move (lowering prices like Teslas’) will have immense ‘advertising/promotion’ value.
That is certainly going to depend on what CPC does with its pricing … but if Aptera funded the die-tools … but their intent in this project is for them to, for the first time, enter the mass market with a product that can be sold at volume.
And price is a critical element in selling in volume. Figuring how to deliver at a lower cost than your competitor is the essence of competition. I sense some of the suppliers may provide a boost to that competition, even if it only for a short period of time.
PS: Let me be clear, I’m not suggesting strong-arming suppliers. Aptera doesn’t have the stroke for that kind of action … but I know it is not a secret that the key suppliers of the innovation – CPC, Aptera for battery design and Elaphe – have an extreme interest in finding the price point that will generate sales; rapid sales.
MemberSeptember 11, 2023 at 3:24 pm
George, as usual, a well thought out analysis. I do hope Aptera and their partners are using some of the rationales and motivations you describe to keep the costs close to the ones that they have held to so far. They could really boost their creds if they even found a way to reduce their prices a tad. That may be too much to ask, though, all things considered.
MemberSeptember 11, 2023 at 5:45 pm
I think any hopes of Aptera lowering the quoted prices are just that, hope. Possibly they will be able to hold the line on increases, that would be wonderful. But lets be realistic, even though some costs have gone down, we know others are increasing, mainly, wages.
MemberSeptember 11, 2023 at 7:08 pm
Based on trends of general automotive supplier pricing and fading supply chain issues over the last two years, I think holding the current price structure is prudent for early in the production run. They can always lower the price as needed and as possible in the future.
Direct labor costs should be minimal once a reasonable production pace is achieved.
Getting to production is still key as far as I can tell. Without that, discussing price and market theory is moot. Moot adjacent at best.
Forthcoming news on the Production Intent vehicles and their progress should help the pace of investment now that crowdfunding is back in play with non-accredited investors. Spread the word people…pre-IPO is the time to get in for anyone on the fence.
MemberSeptember 11, 2023 at 9:33 pm
I wonder will the semiconductor shortages impact Aptera coming to market and it’s cost? Has anyone asked this question before?
MemberSeptember 12, 2023 at 1:08 am
The semiconductor situation has improved a lot since 2021.
The existing automakers were particularly impacted because they need to buy legacy designs which are only made in old fabs (i.e., no-one sane would fund a new fab using obsolete process technology). That’s not a problem for a new vehicle design.
MemberSeptember 12, 2023 at 10:59 am
Prices are not based on costs, but rather a customers willing to pay. The art in getting a new product to market is to make a compelling argument of value and get your costs in line to, hopefully, have an attractive gross margin to justify going forward. As you allude, costs should come down over time due to multiple factors such as scale, technical advancements, etc. But, under most circumstances reducing costs internally does not impact a customer’s willingness to pay. Usually, it helps gross margin, especially if a company needs to launch below their targets.
MemberSeptember 12, 2023 at 12:30 pm
Your reasoning is just bizarre. Chris himself has clearly stated that the costs to manufacture went up , “It costs more, the body structure costs considerably more than steel or aluminum structure” – at the recent Tesla Takeover event; look for an AOC video titled Chris Anthony’s presentation.
Look, if there were any chance they could hold the price as shown they would have first guaranteed a price to the Accelerate members and they certainly would be bragging about holding the line. However in every video in the last twelve months when pressed they have either flat out said costs have gone up or hinted strongly that they have. I would list the videos with timestamps but these quotes are not hard to find.
CPC Group is a well known entity in the automotive space and by no means needs Aptera to further their company’s ambitions. The only time you read about CPC and Aptera in the same article is in reference to the November 2022 announcement. CPC’s own news pages mention nothing of the agreement either. I found no news article or entry on CPC’s own site to support any of your claims as to their desire to expand and how they plan to do it.
First off, you are wrong because we know the Aptera glass provider and it is not CPC group, it actually is Star Glass who is in Spain. We also know per the last filing from Aptera that Aptera spent 9.4m with CPC Group so far and only had a five million dollar open purchase order agreement; we will hopefully learn more with the required 1-SA filing due before the end of the month which Aptera could have filed many many weeks ago.
Your biggest mistake is the idea these other suppliers have any concern with Aptera being successful. Sure all suppliers would like to have successful customers but their pricing reflects their own needs first. Outside of a few select nearly unknown suppliers (the headlight is a great example) all these companies have already established themselves in the market – Aptera is just another customer – a small one and one that has not made any deadline set yet. Oh, I am not even sure if Rousch is actually a supplier. They may have been but I cannot find any recent reference.
When Aptera applied for California grants they only listed two key partners, Munro and Elpahe. None of the suppliers mentioned are invested in any way short of Elaphe who were supposed to create an American production site in the Vista facility which we now know is not possible. Chery was paid for technologies and engineering assistance.
Your post certainly appeals to the faithful but it is pure copium. A hint of the real truth is coming in a few weeks when they have to, legally required, to publish their 1-SA on the SEC system for all to see.
The real elephant in the room is the debacle of the Vista facility and the decision to vacate it made less than six months after taking it on and then waiting till July 2023 to terminate the lease early – likely to shift the impact to the end of year financials and avoid tainting the June 30th numbers; we shall see shortly.
MemberSeptember 12, 2023 at 2:41 pm
At the end of the day the price will be what the price will be. Aptera is in a difficult position, they haven’t been able to raise the money they need to start production so they certainly won’t have the money to subsidize demand. GM and Ford are losing lots of money on their EVs, they are using ICE profits to do it but they can’t do it forever. Rivian raised billions of dollars so they had some runway to lose money for a couple of years but they will need to turn the corner soon.
Aptera has no runway, they have to make a profit on each car almost immediately which is a very tall order. They have to price the car above it’s costs but they can’t price it above it’s value. Arcimoto failed because their price was way above the value so they sold almost nothing. Lightyear tried to come out with a ridiculously expensive car which would have been profitable on a per car basis but they failed to sell a single one so 0 times anything is still 0, they are gone. Lucid has an excellent product and you could argue it’s worth the money but there is very little demand at their price point and what demand there is goes to Mercedes. Lucid raised a couple of billion so they have a little time, unfortunately for them the people they raised the money from have a bad habit of chopping people up and stuffing them into suitcases.
Aptera has been successful at crowd funding but not at traditional funding. They will have to figure out how get into production with the limits that they have. They won’t be able to ramp as fast as they would like but the upside of that is that if demand exceeds the supply they have a little freedom in pricing. They need to work very hard to keep both their production costs and their burn rate down. We can all home they will be able figure it out.