SSM — Sono Group N.V.

SSM Q3 2022 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: €180,000 for the first nine months of 2022, a significant increase from zero in the same period in 2021. Q3 revenue was €138,000, marking a sixfold increase from the previous quarter.
• R&D Investments: Approximately €90 million spent in the first nine months, up from €27 million year-to-date September 2021.
• Cash Position: Cash and cash equivalents were approximately €33 million as of September 30, 2022, with an increase to about €55 million by November 30, 2022.
• Net Cash Outflow: Approximately €56 million in Q3 2022.
• Funding Needs: Estimated €130 million required to reach pre-series production, with an additional €80 million needed for initial customer deliveries in Q1 2024.

2. Strategic Updates and Business Highlights:

• Sion Preorders: 21,000 B2C reservations and 43,000 total preorders, translating to a potential backlog of over €1 billion.
• Solar Technology Growth: 130% growth in B2B solar customers, now totaling 23, including major players like Mitsubishi and Scania.
• Partnerships: Established a partnership with Bosch Automotive for servicing and repairs, and received a purchase order from a major OEM for solar body panels.
• Employee Growth: Staff increased to over 418, with a significant portion being engineers.

3. Forward Guidance and Outlook:

• Production Timeline: Start of production (SOP) has been delayed from H2 2023 to Q1 2024 due to funding challenges.
• Community Campaign: Launching a "Save Sion" campaign to raise €100 million through upfront payments from reservation holders, aiming to bridge the funding gap.
• Future Funding Strategy: Plans to secure additional funding through a community marketing campaign, potential equity raises, and asset-based financing.

4. Bad News, Challenges, or Points of Concern:

• Funding Challenges: High inflation and rising interest rates have created a difficult market environment, complicating capital raising efforts.
• Production Delays: The delay in SOP could impact customer sentiment and trust, especially if further delays occur.
• Market Competition: Competitors like Lightyear have begun production, raising concerns about SSM's market positioning and the urgency of their production timeline.

5. Notable Q&A Insights:

• Community Engagement: The management emphasized the importance of their loyal community and the potential for the upcoming campaign to alleviate funding pressures.
• Supplier Relationships: Management reassured that delays in SOP would not significantly disrupt relationships with suppliers, particularly Valmet Automotive.
• Strategic Partnerships: There is ongoing interest from potential OEM partners for strategic investments, although specifics were limited due to confidentiality.
• Transparency Commitment: The company plans to maintain transparency with its community regarding production timelines and challenges, aiming to build trust despite potential delays.

Overall, SSM is navigating significant growth and operational milestones while facing funding challenges and competitive pressures in the solar electric vehicle market.