Hours after posting its Q3 2022 results, Sono Motors CEOs and cofounders Jona Christians and Laurin Hahn offered a public statement outlining the financial struggles of its Sion solar EV program, which now teeters on the edge of being scrapped so the company can focus on its revenue-generating B2B solar technology business. Before it gives up however, the Sono team has launched a 50 day campaign called #saveSion which implores its community of reservation holders to commit to a solar EV purchase to help kick off a 12-month journey to get the Sion into production.
Today’s news is particularly disheartening since we have covered Sono Motors for several years now, as it has progressed from garage prototypes to a series validation Sion solar EV which debuted this past summer, complete with its most sleek solar panel technology yet.
To date, Sono has approximately 21,000 direct-to-consumer orders for the Sion, in addition to about 22,000 B2B orders. In six short years, the solar EV company has not only built a production-intent mass-market solar EV but also a community of fans and potential customers across Europe.
Although the company’s B2B solar technology business continues to flourish, the Sion program has stumbled recently, to the point that Sono may have to abandon it altogether in order to survive. But the fight is not over. Sono’s robust reservation book shows there’s a clear appetite for its solar EV, and its cofounders are humbly leaning on that community to help bring the Sion to fruition.
Purchase commitments that include robust down payments from potential customers over the next 50 days could at the very least, give Sono enough time to acquire additional funding to deliver the Sion by 2024.
Today, Sono has launched the #saveSion campaign.
Sono Motors leaves Sion’s fate in hands of its community
Following today’s Q3 financials showing great progress with its B2B solar business, the Sono Motors cofounders released a public statement sharing the recent struggles of the Sion program, relaying a situation in which equity financing has become increasingly challenging:
Sono Motors has achieved important operational and commercial milestones throughout the year. These include signing promising partnerships in our solar business and presenting our first Sion series-validation vehicles. At the same time, financial markets have experienced a negative downturn, with many tech companies losing up to 90+% of their respective market cap, and shares in mobility tech companies have been hit particularly hard. As a result, financing our Sion program through equity has become increasingly challenging and dilutive. Raising money takes much longer than expected, since we failed to explain to investors why the Sion has the potential to become the world’s first affordable solar-electric vehicle and that there is a huge demand for it.
Rather than simply abandon its solar-powered child immediately, Sono is launching one last ditch effort to (partially) solve its current financial dilemma in the form of a campaign it hopes will go viral and bring enough of its reservations to fruition to keep Sion development going.
The start-up explained that its roughly 21K private reservations equate to about 465 million euros, in addition to another 600 million euros in potential revenue from business commitments. Of those approximately 43,000 reservations in its backlog, Sono looks to receive payment on just 3,500 of them over the next 50 days to #saveSion.
In 2019, the start-up launched a crowdfunding campaign that raised over 50 million euros in 50 days, but this latest plea for financial support from its community of solar believers comes at a much different time. Sono Motors is now significantly larger, the Sion is further along, and Sono has a separate solar business pillar it can prioritize. All that said, 3,500 sales of a 25,000 Solar EV remains the target, but will only get Sono so far. Per the release:
Developing a car usually costs up to 1 billion euro. We’ve come close to pre-series with spending less than half of that money. #saveSion is our non-dilutive solution for funding the majority of the Sion program and the first part of a broader funding strategy for the next 12 months, which includes of course the capital markets. We believe we will be able to continue to acquire more funding and continue to pay the remaining machinery, tooling, and production setup to achieve the planned pre-series production in 2023 and make it to SOP in the first quarter of 2024.
Sono is offering those reservation holders who commit to a Sion purchase a discount of up 3,000 euros – the more you put down as a down payment, the more you save on the final price. Those committed customers will only be held to payment if and when the 50-day campaign proves successful.
Should the community funding raise fail, Sono Motors says it will turn its attention entirely to its B2B solar business. The company states its current and expected liquidity should allow for a pivot to solar tech only, so the start-up itself is not in dire straits. However, the fate of the Sion is certainly in peril.
Reservations can currently be made in 27 different European regions, but unfortunately, US consumers cannot join the movement. You can learn more at the #saveSion dedicated page.
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