Develop, build & market an electric vehicle with novel drive, mobility and charging technologies.
|Sectors||Automotive & Transport Mixed Digital/Non-Digital Mixed B2B/B2C|
|Incorporation date||16 Jan 2016|
The goal of SONO MOTORS is to become an established automotive manufacturer, with a focus on electric vehicles with alternative drive, mobility and charging technologies.
We anticipate that market entry will take place in Q3 '19, with an innovative electric car named “SION”, which incorporates photovoltaic generators into the body of the car (“viSono”), has a range of 250 km and retails for 16k Euro.
We believe that SION will be the first solar car to go into volume-production.
In short, the SION is a state-of-the-art electric vehicle for a broad, international community.
The SION is a five-door compact van with a length of 4.11 m. An 80-kW engine enables a continuously variable transmission to reach speeds of up to 140 km/h. It has five seats with the rear 3 collapsible to a flat bench and it has a trailer hitch.
Development and production of the SION is expected to be carried out in Europe, in cooperation with well-known, leading contract-manufacturers and automotive system-suppliers.
Over the last decades, our society has grown and developed substantially. One of the main fuels for this engine of progress was based on a scarce and non-renewable resource, namely, crude oil. This precious substance is employed for producing all sorts of materials used for mobile phones, pharmaceuticals, fuels and many more. Interestingly, more than 60% of total oil production is used to produce fuel for transportation. If we continue like this, some people believe that we will be the first generation to run out of this precious resource. We don't think this is fair!
This dilemma gave the spark to develop the SION, nearly 4 years ago. Why did no one drive electric vehicles? Why do we have to use non-renewable resources for transportation? What would an EV have to be like, in order to reverse the waste of scarce resources? With the SION, we have developed a state-of-the-art EV that we believe is mass-market-compatible. Through the mobility-services, the asset is utilised more efficiently and effectively, for day-to-day usage.
Substantial accomplishments to date
The foundation stone of SONO MOTORS was laid circa four years ago, by developing and building a concept-prototype of the SION that was presented in July 2016. Through this prototype, critical know-how and data was harvested to continue development a vehicle for everyday use.
Another great success is the crowdfunding campaign launched in August 2016. Over 800k Euro* was collected over various channels including an Indiegogo campaign and from reservations on our website. Today, SONO counts over 1,700 supporters from 49 countries; over 1,300 participants reserved the SION and, to date, 32 participants paid the full amount, without having tested the SION. Based on each of these pre-orders purchasing cars and battery packs without a discount the estimated revenue is roughly €27m Euro. This demonstrates the market-potential of the concept and underlines the trust SONO MOTORS’ customers have in the company.
Through the successful close of the first funding rounds, the construction and presentation of the fully operational prototypes could be presented on time, a successful marketing campaign launched and a test-drive-tour through Europe, started, to start the pre-sale of the SION.
SONO has already initiated negotiations with renowned contract-manufacturers and system-suppliers from the automotive industry in Europe, with the aim of starting volume production in 2019. We believe that this approach reduces the risk to SONO and improves the chances of a successful market entry.
During the next 22 months, we aim for vehicle development and homologation to be finalised and industrialisation completed.
*Source: Unaudited management records.
The British market research firm IDTechEx from Cambridge, in its 2017 report, highlighted that the potential market size for electric mobility will rise to around 700bn Euro by 2027.
Based on considerable market analysis, the findings from the crowdfunding campaign, and surveys of potential customers, SONO MOTORS concludes that private customers, i.e. families and city-commuters, as well as micro-logistics businesses will form the largest target market for the SION.
The aim of the aforementioned test-drive-tour through Europe, in combination with supporting marketing initiatives, is to acquire potential clients and supporters that will generate reservations of the SION. We expect that these reservations will then turn into sales during 2019, i.e. after start of production. Furthermore, reservation counts will increasingly strengthen SONO's negotiation power vis-a-vis industry partners.
Use of proceeds
Total estimated expenditures on capital assets and operation of the company amount to roughly €59m between 2017 and 2019 where we aim to launch production.
After SOP, SONO intends to use earnings to fund its operations.
During the next 8 months, we estimate that roughly €7.8m will be incurred for the vehicle development and parts of the production tooling. We expect that a large portion of these expenditures will be funded by earnings from the pre-sale. Our plans are set on the basis that capital demand for the next 8 months is €1m to €5m. The aim is to acquire part of these funds through this campaign.
With the means from this campaign, SONO will fund the first steps of concept-evaluation, vehicle R&D and production tooling. Further funding will need to be acquired over the next 6 months, to secure finance for tooling, manufacturing/production assets, as well as final R&D efforts.
Please note that the share price for this round is €1,911. Due to this high share price, we have decided to allow investors to hold fractional shares. This means that we have reduced the investment multiple to €19.11 (representing 0.01 of a share). As these shares will be held via the Seedrs Nominee, fractional entitlements are possible. In the event that shares were to be transferred out of the nominee structure, Sono would take the steps required to subdivide its shares so that fractional entitlements result in whole shares.
Latest news from Europe, as well as China and India point to the market potential for e-mobility: several political initiatives in many countries aim at banning vehicles with combustion engines.
SONO, therefore, is led to believe that e-mobility is one of the most attractive markets. Especially for a cost-efficient and practical electric car, the market is gaining substantial momentum.
The market for SONO is not limited to Germany, but rather has worldwide potential. Through viral and interactive media, we intend for the SION to be marketed globally, but initially delivered only to Bremerhaven, Germany.
Form research conducted by the German Aerospace Centre (DLR), where over 3,000 individuals and companies operating electric vehicles were surveyed, SONO can assess that:
1. Of all private respondents 89% were middle aged individuals with high degrees of education and above average incomes, living in medium and large cities. From this we can infer that one important potential market are middle aged, high income city-commuters.
2. Of all commercial respondents two thirds were small and medium enterprises (SME), such as micro-logistic companies with less than 49 employees. From this we can infer that another important potential market are SME, such as taxi-businesses, delivery services, public administration etc.
Characteristics of target market
To us, Europe clearly represents the largest single market for the SION. The reason for this assumption is the European ECE homologation, which unifies homologation processes throughout Europe. The community and thus the customer base are also strongest here. This is confirmed by the crowdfunding campaign, in which more than 90% of monetary support came from the DACH and BENELUX countries.
We consider the North American market as the second most important market. Our analysis of the crowdfunding campaign viewership showed that there is interest from the US and Canada. However, market deterrents are amongst the strongest in this region.
The production of a car for right hand drive (RHD) comes with substantial added costs, which make it difficult to target any RHD market, unless they include India.
By far the biggest market for electric vehicles is China. The growing middle class and stricter environmental requirements are causing the market to grow rapidly. In the long term, the Chinese market is of great importance to SONO.
Interactive advertising is considered the most important marketing tool. High-quality videos on platforms such as YouTube, Vimeo or Facebook should provide high digital penetration. Therefore, a clear, concise online presence is essential for commercialising the SION. A corresponding presence in the social networks such as Facebook, Instagram and Twitter adds benefits to this concept. Via other platforms such as Reddit, LinkedIn and Quartz, SONO MOTORS can gain even more popularity through intelligent, viral marketing.
The most powerful incubator was the crowdfunding campaign launched in August 2016. Crowdfunding has become an essential resource to young companies, given they not only acquire funding, but also recognition and awareness at no further expense. By launching its crowdfunding campaign, SONO MOTORS received an overwhelming public response without any significant expenditure on marketing.
This highly successful marketing strategy is still being pursued and expanded.
At present, direct competition exists only in specific areas. The supposedly largest competitor, Tesla, will actually benefit SONO, by making electric cars “socially acceptable”. Further, Tesla activities are currently focused on the premium segment.
A significant competitor is the Renault-Nissan-Group. The Renault ZOE or Nissan LEAF have similar prices to the SION.
Although German manufacturers such as VW also develop EV, we consider that these are far behind in terms of range, price and innovative. For example, the regular VW up! retails at £10k, whereas the identical, battery-powered VW E-Up! is priced at almost £26k.
Similarly, we consider that BMW is also behind the market standards: after six years of development and considerable investment in R&D, the i3 only achieves a range of 200 km and retails at £30k.
The new Asian automotive manufacturers are already significant players and are regarded as direct competitors, as they have invested in battery technology. BYD, or LeEco are important players.