Sono Motors launches Community Funding Campaign with target of €50 million

The German mobility provider Sono Motors launched one of the biggest community funding campaigns in Europe.

The company's campaign target is to generate €50 million ($55 million) between now and December 30, 2019, with preorders from existing and new supporters.

The capital will then primarily be invested in production facilities for prototypes of the first solar electric vehicle (SEV): the Sion. This broad-based public campaign follows a strategic reorganisation of the company's finances. Long-term realisation of the vision, an unreserved focus on the objectives of Sono Motors as well as the production and delivery of the Sion are to be safeguarded in ways other than with conventional financing rounds. The idea is for the follow-up financing to likewise be borne by the growing Sono Motors community, complemented by long-term investors who share and support the company's value system and vision.

In the past, the company's high capital requirements meant that international investors in particular played a major part in its financing strategy. However, in advanced negotiations with a number of potential partners it became increasingly apparent that Sono Motors' long-term corporate strategy could not easily be reconciled with the interests of traditional investors. A departure from the company's vision and an outflow of technologies and patents and ultimately the end for the forward-looking concept of the Sion would have been the result.

The decision to no longer pursue the previous strategy and the termination of the corresponding talks requires the acquisition of new financial resources and postpones the production of the first vehicles into September 2021.

“We realised again and again over the past few months that we have entirely different goals to traditional financial investors,” said Laurin Hahn, CEO and Co-Founder of Sono Motors. “Aggressive growth and quick profits are difficult to reconcile with a sustainable corporate and vehicle concept which is designed to give access to affordable and eco-friendly electromobility throughout. In addition, providing start-ups that have a capital-intensive business model with venture capital does not work in Germany, neither in the initial stages nor at the growth stage.”

“Had we relied solely on funding measures or the German market environment, Sono Motors would probably not exist in its current form. Urgent action is required from the politicians in this area. It should be possible to implement such a future project in Germany and lead it to economic success. We will continue to fight anyhow. For climate-friendly mobility and for our reservation holders,” added Hahn.

Sono Motors' decision to opt for community funding is an unmistakable acknowledgment to the more than 10,000 supporters who have already preordered and prepaid a Sion and a rejection of teaming up with investors who do not share or support the company's vision and goals.

“We were torn between our pledge to the community and the investors' demands and were increasingly moving away from who we really are, which is something we absolutely had to correct. Social responsibility and climate protection would otherwise have fallen by the wayside, and so would all that we stepped up for. We are now focusing on continuing to fund our innovative vehicle concept together with people who want to see the Sion on the road. Together with a community that asks for a company which acts responsibly, critically questions itself and can be judged honestly on the basis of the statements it makes,” said Jona Christians, CEO and Co-Founder of Sono Motors.

With the start of the campaign, the company founders are transferring their remaining shares of the profits to a Community Pool and transfer future profits to today's Sion reservation holders. They are therefore passing up their personal profits, but will keep their voting rights in the company. This ensures that the company's objectives continue to be realised and that the Sion can be produced sustainably without any changes to the concept. The founding team currently holds around 74% of the company's shares and 64% of the profit participation rights.

The Sion is the first production vehicle to bring together solar integration, mobility services and a bidirectional charging function. The seamless integration of solar cells into the vehicle's surface makes this innovative all-rounder independent of the charging infrastructure over short distances. Up to 5,800 kilometres of free and carbon-neutral range can be generated a year thanks to the integration of solar cells, thereby lowering the running costs of the car. A total of 260,000 vehicles will be manufactured with renewable energy in Sweden.