Can-Am Earnings Strong For Q4 & FY19

2019 Can Am Defender XT UTV
The 2019 Can Am Defender XT in Hyper Silver is one example of the companies constant parade of new models.

Can-Am Earnings Call Summary

Can-Am earnings were strong for the fourth quarter and fiscal year for 2019. Annual revenues increased 18% from $4.5 billion to $5.2 billion (CA$) and quarterly revenues jumped 23% to $1.5 billion. The following are highlights from the recent earnings call.

  • North American powersports retail sales excluding snowmobile sales grew 19% while the industry decreased low single digits in the fourth quarter
  • North American side-by-side sales increased high teens while the industry increased single digits
  • Can-Am grew market share in side-by-sides
  • Increased UTV production capacity by 30% at Mexico facilities with another 50% capacity increase planned for the coming year
  • Continued to introduce a new side-by-side model every six months following their long term plan
  • Side-by-side market remains competitive with promotions or “back end” money going to dealers to reduce net pricing

Can-Am Earnings Guidance for FY2020

Management is expecting continued growth for fiscal year 2020

  • Annual revenue is expected to increase 7-11%.
  • Year-Around Products revenue is expected to grow between 12% and 17% driven primarily by side-by-side models.

Learn more: Seeking alpha.com (Earnings call transcript)

SVR’s Take

Can-Am has grown into the main rival to Polaris in the North American side-by-side market. They have continued to gain market share for several years and have separated themselves from the rest of the pack chasing Polaris. They are the only company that has been able to match the market leader’s level of new model introductions. The development of their Defender product lines to pursue the utility vehicle segment has been a key to unlocking more growth. The complete Can-Am side-by-side lineup now comes close in size and segment coverage to the Polaris armada. Can-Am appears to be running on all cylinders and I would expect them to continue increasing revenue and market share.

Stampede & Rustler UTVs Recalled

Textron Off Road Stampede 4
The Textron Off Road Stampede 4 is part of a recall due to a lower suspension arm issue.

Textron Off Road recently recalled approximately 700 model year 2018 Stampede and Rustler utility vehicles. The lower front suspension arm can fail and potentially cause a crash. The recall involves two-seat and four-seat models including the Stampede, Stampede 4, Rustler 850 and Rustler Crew 850. The following recall information is from the Consumer Products Safety Commission.

Stampede & Rustler Recall Information

Name of product: Stampede and Rustler off-highway utility vehicles (ROV’s)

Hazard: The lower front suspension arm can fail, posing a crash hazard.

Remedy: Repair

Recall date: March 5, 2019

Units: About 700 (In addition, about 70 were sold in Canada.)

Consumer Contact: Arctic Cat at 800-279-6851 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.textronoffroad.com and click on Recall Information located at the bottom of the page for more information. 

Recall Details

Description: This recall involves all model year 2018 Stampede and Rustler model side by side Arctic Cat off-highway vehicles with VIN number 9003240 through 9004062. The recalled vehicles were sold in multiple colors, have four wheels and side-by-side seating for two or four people. The Stampede models have Textron Off Road on each side of the hood area and Stampede on each side of the box. The Rustler models have Rustler 850 on each side of the hood area and 4X4 on each side of the box. The Vin number is located under the front hood on all models.  

Remedy: Consumers should immediately stop using the recalled ROVs and contact TSV/Arctic Cat to schedule a free repair. Arctic Cat is contacting all known purchasers directly. If you need assistance locating an authorized dealer to conduct this repair, contact Arctic Cat. 

Incidents/Injuries: The firm has received four reports of front suspension arm failures. No injuries or crashes have been reported.

Sold At: Textron Off Road and Arctic Cat dealers nationwide from September 2017 through December 2018 for between $13,800 and $16,000.

Manufacturer(s): Arctic Cat Inc., of Thief River Falls, Minn., a subsidiary of Textron Specialized Vehicles, of Augusta, Ga

Manufactured In: United States

Recall number: 19-727

SVR’s Take

This is a small recall, but follows on the heels of another recent Textron Off Road recall. Textron produces the Rustler UTV for farm equipment manufacturer New Holland. The two companies partnered several years ago to produce utility vehicles. The partnership marries Textron’s vehicle manufacturing expertise with New Hollands farm oriented distribution network. SVR maintains an ongoing list of recent STOV recalls.

Havoc UTV Recall by Textron Off Road

Textron Off Road Havoc
Some 2019 Textron Off Road Havoc UTVs are being recalled because of a fuel line issue.

Textron Off Road recently announced the recall of approximately 200 model year 2019 Havoc utility vehicles. Fuel can leak from the fuel line and pose a fire hazard. The two-seat UTVs were sold from October 2018 through January 2019. Consumers should stop using the vehicles and contact an Arctic Cat dealer to schedule a free repair. The following recall information is from the Consumer Products Safety Commission.

Havoc Recall Information

Name of product: Havoc off-highway utility vehicles (ROVs)

Hazard: Fuel can leak from the fuel line, posing a fire hazard.

Remedy: Repair

Recall date: March 5, 2019

Units: About 200

Consumer Contact: Arctic Cat at 800-279-6851 from 8 a.m. to 5 p.m. CT Monday through Friday or online and click on Recall Information located at the bottom of the page for more information.

Recall Details

Description: This recall involves Model Year 2019 Textron Havoc off-highway utility vehicles manufactured by Arctic Cat. The two-seat vehicles come in three color combinations: Charcoal metallic/black, red/black or white/black. The vehicles have Textron Off Road printed on each side of the hood and Havoc on each side of the rear cargo box. Vehicle identification numbers (VIN) ending in 9007497 through 9007717 are included in this recall. The VIN is stamped under the vehicle’s front hood. 

Remedy: Consumers should immediately stop using the recalled vehicles and contact Arctic Cat to schedule a free repair. Arctic Cat is contacting all known purchasers directly.

Incidents/Injuries: None reported

Sold at: Textron Off Road and Arctic Cat dealers nationwide from October 2018 through January 2019 for between $14,000 and $18,000.

Manufacturer(s): Arctic Cat Inc., of Thief River Falls, Minn., a subsidiary of Textron Specialized Vehicles, of Augusta, Ga.

Manufactured In: United StatesRecall number:19-726

SVR’s Take

This is a minor recall, but does again involve an issue with the fuel lines or fuel system. There have been at least six recalls from across the industry since early 2015 that involve fuel system problems. SVR maintains an ongoing list of recent STOV recalls.

Kawasaki Mule Pro Recall

Kawasaki Mule Pro
Kawasaki is recalling some Mule Pro UTVs because of an issue with the ROPS.

In December, Kawasaki announced the recall of approximately 1,000 Mule Pro utility vehicles. The vehicle’s ROPS can fail to protect occupants. The recall involves model year 2018 and 2019 Mule Pro DXT, DX, FXT, FX and FXR vehicles sold from August to September of 2018. The following are recall details from the Consumer Products Safety Commission.

Recall Information

Hazard: The vehicle’s rollover protection structure (ROPS) can fail to protect consumers, posing an injury hazard.

Remedy: Repair

Recall date: December 6, 2018

Units: About 1,000

Remedy: Repair

Recall Date: December 6, 2018

Units: About 1,000

Consumer Contact: Kawasaki toll-free at 866-802-9381 from 8 a.m. to 5 p.m. PT Monday through Friday or online at www.Kawasaki.com and click on “Recalls” for more information.

Recall Details

Description: This recall involves 2018 and 2019 Mule Pro utility vehicles.  The four-wheel, off-highway utility vehicles were sold in black, green, white, red, bronze, silver, camo and blue. They have side by side seating for three to six people and automotive style controls. Mule Pro is printed on the right and left front fender. Kawasaki is printed on the cargo box. The Vehicle Identification Number (VIN) is located on the steel frame between the right front lower A-arm mounts. 

Models Affected

Year       ModelModel CodeVin Range
2018Mule Pro-DXT (EPS)KAF1000AJFJKAAFCA1XJB501117 through JKAAFCA11JB501152 
2018Mule Pro-DXT (EPS)KAF1000BJF JKAAFCB18JB503625 through JKAAFCB18JB503642 
2018Mule Pro-DX (EPS)KAF1000EJF JKAAFCE1XJB502410 through JKAAFCE18JB502437 
2019Mule Pro-FXT(EPS/LE/Camo/Ranch)KAF820AKF JKBAFSA13KB501645 through JKBAFSA14KB501671 
2019Mule Pro-FXT(EPS/LE/Camo/Ranch)KAF820BKF JKBAFSB15KB513858 through JKBAFSB18KB514230 
2019Mule Pro-FXT(EPS/LE/Camo/Ranch)KAF820CKF JKBAFSC19KB513036 through JKBAFSC19KB513361 
2019Mule Pro-FXT(EPS/LE/Camo/Ranch)KAF820DKF JKBAFSD18KB506741 through JKBAFSD1XKB506787 
2019Mule Pro-FX (EPS/LE)KAF820FKF JKBAFSF13KB506336 through JKBAFSF10KB506603 
2019Mule Pro-FX (EPS/LE)KAF820GKF JKBAFSG18KB504354 through JKBAFSG1XKB504355 
2019Mule Pro-FXTKAF820JKF JKBAFSJ19KB508972 through JKBAFSJ15KB509343 
2019Mule Pro-FXRKAF820KKF JKBAFSK14KB504620 through JKBAFSK17KB504630 

Remedy: Consumers should immediately stop using the recalled utility vehicles and contact a Kawasaki dealer to schedule a free repair. Kawasaki is contacting all known purchasers directly.

Incidents/Injuries: None reported

Sold At: Kawasaki dealers nationwide from August 2018 through September 2018 for between $13,000 and $17,000.

Importer(s): Kawasaki Motors Corp., U.S.A. of Foothill Ranch, Calif.

Distributor(s): Kawasaki Motors Corp., U.S.A. of Foothill Ranch, Calif.

Manufactured In: U.S.

Recall number: 19-722

SVR’s Take

This is a pretty small recall. Although, it is one of the few that involves the ROPS. The only other ROPS recall SVR has tracked since early 2015 involved the https://www.smallvehicleresource.com/blog/2018/09/05/polaris-recalls-rzr-xp-turbo-s-utvs/2018 RZR XP Turbo S. SVR keeps an ongoing list of most STOV related recalls.

Marc Cesare, Smallvehicleresuource.com

Polaris Reports Another Strong Quarter

2019 Polaris Ranger Crew XP 1000 EPS
The 2019 Polaris Ranger Crew XP 1000 EPS in Sunset Red Metallic is part of the Ranger product line that recently commemorated its 20th anniversary.

Polaris Q4 2018 Earnings Overview

Polaris reported another strong quarter and full year with 4th quarter sales of $1.6 billion, up 14% from last year. Full year sales topped $6.1 billion, up 12% from the prior year. The ORV/Snowmobile segment reported sales of $1.1 billion for the quarter, an increase of 7% year over year. The ORV portion declined 2% as the company had a tough comparable with the prior year’s quarter. On a negative note, management expects tariff and trade war costs to total between $110 to $120 million company wide for fiscal year 2019. They will hit the ORV and Motorcycle businesses the hardest. A significant portion of the Q&A on the call revolved around tariff and trade war costs. A summary of the earnings call highlights related to the STOV market follow.

Polaris Earnings Call Highlights

  • Polaris side-by-side retail sales increased mid single digits % while ATV retail sales decreased mid single digits %
  • Average selling price for the ORV segment increased by 7% but were partially offset by tariff, logistics, and commodity costs
  • Polaris gained market share in the side-by-side market for the quarter and the full year
  • Management believes they are gaining share from Japanese competitors and Arctic Cat, now owned by Textron
  • Global Adjacent Markets revenue increased 4% to $122 million on the strength of commercial, government and defense and Aixam businesses.
  • Polaris increased wholegood prices 3.5% for the ORV/Snowmobile segment at the start of 2019 to counter tariff and trade costs
  • Revenue for ORV/Snowmobile and Global Adjacent Markets segments are expected to increase mid-single digits % for fiscal year 2019
  • Management does not expect to enter into electric powered markets until there is large consumer demand. Their response pertained to motorcycles but appears to be their general philosophy.

Learn more: Earnings Call Transcript (seeking alpha.com)

Cub Cadet Recalls Challenger 400 4×4

Cub Cadet Challenger 400 4x4

The Cub Cadet Challenger 400 4×4 is being recalled due to possible cracks in the fuel tank neck.

Challenger 400 4×4 Recall Overview

Cub Cadet is recalling their 2018 Challenger 400 4×4 utility vehicle because the fuel tank neck can crack, potentially leak fuel and create a fire hazard. The recall involves approximately 350 vehicles. Consumers should immediately stop using the recalled utility vehicles, store outside and contact an authorized Cub Cadet dealer or customer service representative to arrange for a free repair.

This is a very small recall but for a smaller manufacturer like Cub Cadet it represents a larger percentage of their overall vehicle sales. The Challenger 400 4×4 was launched earlier this year.  SVR tracks recalls of golf cars, PTVs, LSVs and utility vehicles. The following detailed recall information is from the Consumer Product Safety Commission.

Challenger 400 4×4 Recall Details

Name of product:  Cub Cadet Challenger 400 utility vehicles
Hazard:  The fuel tank’s neck can crack and cause fuel to leak, posing a fire hazard.
Remedy:  Repair
Recall date:  October 24, 2018
Units:  About 350
Consumer Contact:  Cub Cadet toll-free at 888-848-6038 from 9 a.m. to 7 p.m. ET Monday through Friday, 9 a.m. to 6 p.m. ET Saturday and Sunday, or online  www.cubcadet.com and click on “Product Recalls” for more information.

Recall Details

Description:  This recall involves Cub Cadet model year 2018 Challenger 400 4×4 utility vehicles with model number 37BV3BHK010. The yellow utility vehicles have four-wheel drive with side-by-side seating for two people. “Challenger 400” and “4x4” is printed on both sides of the utility vehicle’s bed. “Cub Cadet” is printed on both sides of the front fender. The recalled vehicles were manufactured between May 2018 and August 2018. The model number and manufacture date in MM/YYYY format can be found on a label located on the seat frame under driver’s seat.
Remedy:  Consumers should immediately stop using the recalled utility vehicles, store outside and contact an authorized Cub Cadet dealer or customer service representative to arrange for a free repair. Cub Cadet is contacting all known purchasers directly.
Incidents/Injuries:  None
Sold At:  Independent Cub Cadet dealers nationwide from May 2018 through August 2018 for about $7,500.
Manufacturer(s):  Cub Cadet, of Cleveland, Ohio
Manufactured In:  United States
Recall number:  19-707

Yamaha Golf Car Recalls 145,000 Vehicles

Yamaha Golf Car Adventurer

Yamaha Golf Car’s model year 2016 to 2018 Adventurer vehicles are being recalled.

Yamaha Golf Car Adventurer Sport 2+2

The Adventurer Sport 2+2 is also part of the recall.

Yamaha Golf Car Drive 2

Yamaha Drive 2 is being recalled.

Yamaha Golf Car Recall Overview

Last month Yamaha Golf Car announced the recall of approximately 145,000 golf cars, personal transportation vehicles (PTVs) and utility vehicles. The accelerator pedal return spring can break on the vehicles, posing a crash hazard. The recall involves model year 2016 through 2018 gas and electric-powered golf cars, personal transportation and specialty vehicles. Model names include the Drive, Drive2, Adventurer and Adventurer Sport 2+2. Owners should immediately stop using the recalled vehicles and contact a Yamaha golf car dealer to schedule a free repair. There have been no reports of injuries related to the recall but 417 spring failures have been reported.

This is an extremely large recall and rivals those of Polaris from the past several years. Yamaha had a slightly larger recall earlier in the year involving many of the same models for a brake cable issue. SVR tracks recalls of golf cars, PTVs, PSVs and UTVs. In general, the small, task-oriented vehicle industry appears to have a recall problem. A significant number of vehicles are being recalled every year. The following detailed information on this recall is from the Consumer Product Safety Commission.

Yamaha Golf Car Recall Information from CPSC

Name of product:  Yamaha golf cars, personal transportation and specialty vehicles
Hazard:  The accelerator pedal return spring can break, posing a crash hazard.
Remedy:  Repair
Recall date:  October 3, 2018
Units:  145,000
Consumer Contact:  Yamaha toll-free at 866-747-4027 anytime or online at www.yamahagolfcar.com and click on the CPSC Recall Alerts tab for more information.

Recall Details

Description:  This recall involves the following model year 2016 through 2018 gas and electric-powered golf cars, personal transportation and specialty vehicles. The vehicles were sold in various colors including blue, green, red, white, tan and silver. The model and serial number can be found on a label under the seat on the left or right side.

Model Year

Model Name

Model Prefix

Serial Number Range

2016

Drive Models YDRA (Gas)

JW8

600101

614300

JC2

300101

312000

JC0

700101

706600

Drive Models YDRE (Electric)

JW9

600101

618100

JC3

000101

004700

JC1

700101

703500

Adventurer Model YTF1A (Gas)

JW6

800101

800600

Adventurer Model YTF2A (Gas)

JW7

700101

701250

Adventurer Model YTF2E (Electric)

JW3

100101

100300

2017

Drive² Models DR2A (Gas)

J0A

000101

010100

J0B

000101

016900

J0D

000101

007200

Drive² Models DR2E (Electric)

J0C

000101

011400

J0E

000101

002900

J0J

000101

002000

Adventurer Model YTF1A (Gas)

JW6

900101

900400

Adventurer Model YTF2A (Gas)

JW7

800101

800750

Adventurer Model YTF2E (Electric)

JW3

200101

200250

2018

Drive² Models DR2A (Gas)

J0A

100101

110400

J0B

100101

119200

J0D

100101

110600

Drive² Models DR2E (Electric)

J0C

100101

111700

J0E

100101

102600

J0J

100101

102700

Adventurer Model YTF1A (Gas)

JW6

910101

910500

Adventurer Model YTF2A (Gas)

JW7

900101

900800

Adventurer Model YTF2E (Electric)

JW3

300101

300250

 

Remedy:  Consumers should immediately stop using the recalled vehicles and contact a Yamaha golf car dealer to schedule a free repair. Yamaha is contacting all registered owners directly.

Incidents/Injuries:  Yamaha has received 417 reports of incidents involving spring failures. No injuries have been reported.
Sold Exclusively At:  Yamaha golf car dealers nationwide from June 2015 through August 2018 for between $5,500 and $12,300.
Manufacturer(s):  Yamaha Motor Manufacturing Corporation of America, of Newnan, Ga.
Distributor(s):  Yamaha Golf-Car Company, of Kennesaw, Ga.
Assembled in:  U.S.
Recall number:  19-701

Honda Recalls 56,000 Pioneer 1000 UTVs

Honda Pioneer 1000

2016 – 2018 Honda Pioneer 1000 three passenger model being recalled.

Honda Pioneer 1000-5

The 2016-2018 five passenger model is being recalled as well.

Honda Pioneer VIN

Location of the VIN on the Honda Pioneer models.

Pioneer 1000 Recall Overview

Honda has announced a massive recall of their Pioneer 1000 utility vehicles because an incorrectly installed throttle body poses a fire and burn hazard. The recall involves all model year 2016 and 2017 vehicles, as well as some 2018 vehicles. The three passenger and five passenger models are included in this action. Owners should stop using the recalled vehicles immediately and contact their local Honda Powersports dealer to schedule a free inspection and repair. No injuries have been reported related to this recall.

This is a very large recall. Earlier this year Honda issued a recall for most of these same vehicles because of a muffler issue. SVR tracks ongoing vehicle recalls for UTVs, golf cars and LSVs.

Detailed Recall Information

The following information is from the Consumer Products Safety Commission.

Name of product:  Recreational off-highway vehicles (ROVs)
Hazard:  An incorrectly installed throttle body can ignite, posing fire and burn hazards to consumers.
Remedy:  Repair
Recall date:  November 8, 2018
Units:  About 56,000
Consumer Contact:  American Honda toll-free at 866-784-1870 from 8:30 a.m. to 4:30 p.m. PT Monday through Friday or online at http://powersports.honda.com/and click on “Recall Information” at the bottom of the page for more information.

Recall Details

Description:  This recall involves all model year 2016 through 2017, and some model year 2018 Honda Pioneer 1000 side-by-side vehicles. The recalled vehicles were sold in various colors including: red, blue, green, gray and yellow. The name “HONDA” is on the front, sides and the rear of the vehicle. The model name Pioneer 1000 is printed on a label located on both sides of the vehicle, near the rear.  The serial number (VIN #) is stamped in the frame at the left rear, below the tilt-up bed/seat. The following model numbers and serial number ranges are being recalled:

 

MY Model VIN Start
2016 Pioneer 1000 3P

(SXS10M3*)

1HFVE04**G4000001 — 1HFVE04**G4008403
2016 Pioneer 1000 5P

(SXS10M5*)

1HFVE04**G4000001 — 1HFVE04**G4010507
2017 Pioneer 1000 3P

(SXS10M3*)

1HFVE04**H4100001 — 1HFVE04**H4102101
2017 Pioneer 1000 5P

(SXS10M5*)

1HFVE04**H4100001 — 1HFVE04**H4103000
2018 Pioneer 1000 3P

(SXS10M3*)

1HFVE04**J4200001 — 1HFVE04**J4200720
2018 Pioneer 1000 5P

(SXS10M5*)

1HFVE04**J4200001 — 1HFVE04**J4200780

Variable character

Remedy:  Consumers should immediately stop using the recalled ROVs and contact an authorized Honda Powersports dealer to schedule an appointment for a free inspection and repair. Honda is contacting all known purchasers directly.
Incidents/Injuries:  The firm has received 5 reports of throttle body igniting. No injuries have been reported.
Sold At:  Authorized Honda Powersports dealers nationwide from August 2015 through August 2018 for between $14,000 and $22,000.
Manufacturer(s):  Honda of South Carolina Mfg. Inc. (HSC), of Timmonsville, S.C.
Distributor(s):  American Honda Motor Company Inc., of Torrance, Calif.
Manufactured In:  United States
Recall number:  19-714

Lithium Battery Powered Golf Cars on the Rise

Trojan Trillium lithium battery

A lithium battery from Trojan’s new Trillium product line.

Trillium Lithium Battery Line from Trojan

Trojan Battery, a major player in the golf car and small task-oriented vehicle market, recently introduced their new Trillium line of Trojan Intelligent Lithium batteries. The line is targeting the aftermarket segment and is designed to be a replacement for existing lead acid batteries. According to Trojan the switch can be made “without the need for expertise in Li-ion technology or system integration.” Likewise OEMs can use the new battery line “…without significant investments in custom pack design and development.”

Sign of More Market Penetration

Trojan’s new product line is another indication of the growing use of lithium batteries in the golf car market. For a number of years there has been a lithium battery aftermarket that has largely consisted of smaller companies packaging together the various components. They either sell directly to golf car owners and/or through dealers who can install the components. However, this has been a niche market. In 2015 LiV Golf Cars tried to sell a lithium powered fleet golf car but were undercut by the big players too many times and retreated from that market. There are also smaller volume OEMs like GEM and luxury golf car maker Garia that offer lithium powered vehicles.

E-Z-GO Entry a Gamechanger

The most significant move towards lithium batteries came in 2017 when E-Z-GO, one of the major golf car manufacturers, launched their ELiTE line of lithium powered fleet golf cars. They also offer the option on some of their personal transportation vehicles. Financial reports show that E-Z-GO sold over 20,000 ELiTE vehicles in 2017. Samsung SDI is the lithium battery supplier for E-Z-GO. Rival golf car manufacturer Club Car has been linked to battery manufacturer LG Chem but has not yet introduced any lithium powered vehicles.

What Lies Ahead

The entry of a brand name such as Trojan should boost the aftermarket segment. Customers will likely have more trust in a Trojan backed product. In addition, if it is as easy to use as advertised, then this niche market should expand. The E-Z-GO product appears to have launched fairly successfully. Continued success will likely force Club Car and Yamaha to introduce their own lithium powered vehicles. Perhaps as soon as the upcoming PGA Show early in 2019. Once that happens, the move towards lithium batteries could accelerate quickly.

Marc Cesare, SVR

Arcimoto FUV: A Threat to PTVs?

Arcimoto Fun Utility Vehicle - FUV

The electric powered Arcimoto FUV (Fun Utility Vehicle) is just coming to market.

Oregon based Arcimoto is beginning to roll out their three-wheeled Fun Utility Vehicle (FUV). The combination of price point, size, electric powertrain and ability to travel public roads makes the Arcimoto FUV an intriguing alternative to golf cars, PTVs and LSVs.

Update – Arcimoto responded to a number of questions I sent them and I have added the information to the relevant sections below.

Arcimoto FUVs already on the Road

The first 10 FUV prototypes hit the road this past June. The company completed another 15 vehicles, referred to as their beta series, in September. These went to five customers and the remainder to rental locations. Vehicle rental franchising in tourist locations is a key part of Arcimoto’s marketing plan. As of the end of June the company has 2,800 reservations for the FUV.

Volume Production

Management expects to begin production and delivery of their A series of vehicles during this quarter. The A series marks the move to higher volume production. Plans call for a run rate of 200 vehicles/week or roughly 10,000/year by the end of 2019. The company has deliberately designed smaller sized production facilities that can produce approximately 10,000 vehicles per year.  A production facility costs approximately $10 million. This limits initial capital costs and creates a facility that can be profitable relatively quickly. Furthermore, the facility can be easily replicated in other parts of the country or the world.

Vehicle Features and Specs

The Arcimoto FUV is a three-wheeled vehicle powered by a 67 hp electric motor and a 12 or 20 kWh lithium-ion battery for a range of 70 or 130 miles and a top speed of 80 mph. As a three-wheeler, most states classify the FUV as a motorcycle or similar vehicle. Therefore, it does need the same  safety requirements as a full-sized, highway capable vehicle. The FUV can seat two passengers, one behind the other, and features regenerative braking, hydraulic brakes, a windshield with wiper and defrost, and heated seats and hand grips. Additional options include full HVAC, soft or hard shell doors, rear cargo box, bluetooth speakers and racks for golf clubs, bikes, surfboards, etc. The target price for the base model is $11,900 with a fully decked out model reaching the $19,000 range.

Arcimoto FUV Dimensions

Arcimoto FUV Dimensions

Versatility and Price Point Creates an Alternative to PTVs

The FUV is a versatile vehicle for gated communities. The vehicle can move from golf course, to community pathways to public roads. On public roads the FUV faces none of the restrictions of a golf car, PTV or LSV since it is classified as a motorcycle. Therefore, it can travel on higher speed roads and at night. The FUV can travel faster and farther as well. In terms of speed, the FUV may need a speed limiter option for use on golf courses or within communities depending on local regulations. According to Arcimoto, the vehicle does have the capability to cap speeds to meet specific needs.

The company is targeting a $12,000 base price. Therefore, the FUV is pricier but competitive with LSVs and fancier PTVs given the trade off between price and functionality. One of the reasons LSV sales never really took off in gated communities as expected is that the additional price premium did not offer a significant benefit over new or refurbished golf cars. LSVs are most successful where regulations greatly restrict the use of PTVs or golf cars on local roads. However, if anything, municipalities are becoming less restrictive regarding golf car use. Furthermore, in states like California, Massachusetts, Maryland, Arizona, and Illinois there are tax incentives available for the FUV. There is also the possibility that electric motorcycle or similar incentives could be brought back at the federal level. The company is lobbying to have the tax credits for motorcycles and three-wheeled vehicles brought back. This additional cost reduction could further boost the attractiveness of this alternative vehicle.

Arcimoto FUV Drawbacks

There are some potential drawbacks to the Arcimoto FUV in the gated community setting.

Higher Driving Speeds

Some communities may object to the vehicle’s higher speed capabilities. Some type of speed limiter could address this, or not, depending on the locality. In addition, given the older demographic in gated communities, some drivers may not feel safe driving at higher speeds on local roads. Nevertheless, driving up to 40 to 45 mph would include a large swath of vehicle usage inside and outside a gated community. In effect, the FUV could displace both PTV miles and a sizable chunk of driving performed with highway capable vehicles.

Seating Configuration

Seating configuration is another potential drawback. The seating in an FUV is one passenger behind the other rather than side by side. Some users may feel this reduces the social aspect while riding in the vehicle, particularly on a golf course.

Vehicle Storage

For seasonal usage by vacation home owners, there is often a need to store the vehicle for several months without any usage. This can be an issue or at least require some planning for the current battery powered vehicles. According to Battery University a lithium ion battery should be stored at 40% percent charge if being stored for an extended period. Arcimoto did not answer my question directly on this subject but expect to have a battery pack with a lifetime of “…8-10 years with normal vehicle usage, and still maintain more than 80% of their original charging capacity.” The pack replacement cost is expected to be under $2,500 inclusive of the residual value.

Marketing, Pricing and Local Regulations Critical to Success

The success of the Arcimoto FUV in displacing golf cars, PTVs and LSVs will depend on three key elements:  marketing, pricing and local regulations. The last may be the most important. If gated communities object to the FUV’s higher speed capabilities, and there is no technological fix, foreclosing the market. The pricing may be the easiest to address. If Arcimoto can hit their target price at volume production, even without tax incentives there is a compelling cost benefit story for the FUV.

The marketing element depends in part on where Arcimoto’s management wants to invest resources. The gated community market may be too small to target during the initial phases of the vehicle’s rollout. In addition, golf car dealers mainly serve this market. The company likely does not have relationships with this distribution channel. On the other hand, their rental franchise plan could overlap with these dealers as some are located in tourist oriented beach communities and have high PTV use. This angle could serve as an entry point to the market. In response to my questions Arcimoto stated that they put on a test ride event for the FUV at The Villages, a gated community in Florida, on November 12th. They also noted that the short drives and warm weather make resort communities a great market for the vehicle.

In a years time we will have a better idea whether the Arcimoto FUV has met with success, and whether it threatens the PTV market.

Marc Cesare, SVR