Family Question that I can't answer.

[A1phaGeek]

Does any one know or have a good guess as to Aptera's Market Cap after this last round of funding?

My Family and I have been having some lengthy conversations about the pros and cons of the Aptera, and the following question was one I did not have an answer for.

"I think (buying an Aptera) is a good idea however I would be concened with (Aptera's) amount of capitalization- they need twenty four billion not million for mass production- do you know their market cap level--ie # shares of stock owned/sold times the value of a share- this is their borrowing power. If it is in the billion range then they have the potential to make it happen if they are below a billion then they are likely to have huge cash problems. Car manufacturing is such a huge capital intensive venture that it takes about 3 million vehicles sold to begin off setting production costs at a normal consumer level. Their idea is likely to be enormously attractive they just need enough cash to get into the market.
cheers dad"

P.S. My family is from Detroit, so my father has had quite a bit of interaction with the auto industry. He did not work directly for the industry, but his job did bring him in direct contact with the CEOs and upper execs/management on a regular basis. I have a feeling his questions come from his interactions with these individuals.

[Apt3448]

Aptera is not currently traded publicly, and seems not to have any intent of doing so in the near future. I remember reading that they need to sell 2000 vehicles to get into black ink. Development of the prototype was only $5 mil, very low in comparison to Detroit. I think Detroit standards do not currently apply to Aptera. They also made good choices by limiting sales to CA: they are not over reaching in terms of providing service. With both development costs limited and production costs low (they won't make too much at once), and about 25 people working they seem to be fine. Billions of $$? What DO they do with all that in Detroit?! Not making relevant cars, obviously.

[KarenRei]

"I think (buying an Aptera) is a good idea however I would be concened with (Aptera's) amount of capitalization- they need twenty four billion not million for mass production- do you know their market cap level--ie # shares of stock owned/sold times the value of a share- this is their borrowing power.

Aptera is not a publicly traded company. It is privately held, with $20m initial investment capital from Idealab and Esenjay, and now $24m from a number of companies. They're tooling a factory whose *ultimate* goal is to produce only 10,000 vehicles per year. They're going to be starting at a rate of only a few vehicles per week.

If it is in the billion range then they have the potential to make it happen if they are below a billion then they are likely to have huge cash problems.

That depends. If you're expecting them to immediately go into high volume, millions-per-year production, then that would be a problem. Otherwise, it's not. Not every vehicle manufacturer in the world thrives on high-volume production. They're not going to be tooling a massive factory that needs to sell hundreds of thousands or millions of vehicles to be paid off.

Also, remember that the Aptera is legally a motorcycle, not a car. Comparisons with motorcycle manufacture are probably more appropriate (although in some respects, comparisons with makers of boats or fiberglass aircraft would be more appropriate). How many motorcycle manufacturers are out there? Well, here's an incomplete list:

http://www.indexoftheweb.com/Automobile/Motorcycle_Manufacturers.htm

Anyone want to take any bets as to whether they're all producing millions of bikes per year? :) Here's car manufacturers while we're at it:

http://www.indexoftheweb.com/Automobile/Manufacturers.htm

It's simply not true that a vehicle manufacturer must make millions of vehicles to turn a profit. Smaller manufacturers usually need a higher profit margin per vehicle, but they generally make up for this disadvantage by offering innovative designs that you can't get anywhere else, with a faster turnaround from design to production. Aptera most certainly falls into this category.

[jdbgn]

Well put Karen, thank you.

[speculawyer]

Aptera's market cap at this point is an arbitrary number picked by the Venture Capitalists and other investors. It doesn't reflect much in reality. The question is whether they can keep needed investment money coming in and at this point, I'd say the answer is definitely yes. The high oil price and waiting list of buyers will keep investors interested. So I have no doubt that they will crank out an initial batch of Apteras.

However, more important issues will arise at that point. Will a significant number of consumers accept the unconventional 3-wheel design? If not, will they be able to follow up with a four wheel model before funding from investors & revenue from the 3-wheel model dry up? Will something happen to the oil markets causing a sharp decline in oil prices?

[Camper 1302]

I think one of the problems they ran into with the big auto MFG in the US was that, by the 70s, you were paying three people to build your car. One person was actually on the line and the other two were retired. LOL

[DonC]

Not to be too sarcastic but Aptera's market cap is probably larger than Chrysler's! (Only kidding a little bit).

Let's face it, an Aptera is a risk. The company could fail. No getting around it. On the other hand, company failure is just one risk among many when buying a car. If you had bought a Hummer three years ago, the depreciation would be more than the entire cost of an Aptera and you'd have a vehicle that you couldn't afford to drive.

Different people have different risk tolerances and are in different financial positions. As with investments, the first thing you want to ensure is that you sleep well at night. If a car purchase is going to make you lose sleep, buy something else. If you or your family are worried, why not look at something like a Honda Fit? It's a nice car, gets good mileage, and will have very good resale.

[garygid]

If Aptera makes $5000 per "e" after production costs and labor, then
100 vehicles a month gives a half million a month to keep the company core going.
Sounds like that might work.

How might Aptera charge for roadside assistance and service?
A small subscription fee to support the service trucks, and
some reasonable charges for services and parts?

[Sloopy]

How might Aptera charge for roadside assistance and service?

US Dollars :-) Happy Labor Day.

[bobbyeye]

Alpha, I think your Detriot math is a bit suspect! The "Bigs" run on 8 billion capitol, and look at the diversity of "Goods" they crank out. I think a small company like Aptera, could manufacter product at 1/10 the capitol. the collective interest in this product will be enough untill the "black ink" takes over the running costs.......