$25,000 bare-bones EV pickup truck will be profitable

LOS ANGELES — Electric vehicle startup Slate Auto expects to defy challenging market conditions and avoid the losses its peers have seen by profitably selling a highly customizable EV that starts at just under $25,000.

Slate CEO Peter Faricy said every vehicle produced by the Michigan-based EV startup — which is backed by Amazon founder Jeff Bezos and Los Angeles Dodgers controlling owner Mark Walter — will be gross margin positive. That will lead the company to positive free cash flow and earnings before taxes, depreciation, and amortization by 2027, he said.

“It’s an ambitious goal,” Faricy told CNBC during an interview at the company’s new design studio outside of Los Angeles. “No other automotive company has been able to do that before. So it’s ambitious. It’s going to take a lot of work. Nothing’s guaranteed in life, but you have to have ambitious goals if you want to achieve big things. That’s the big goal we’re shooting for.”

Other recent EV startups have struggled financially. Automakers such as Lordstown Motors and Fisker Automotive went bankrupt, while Rivian Automotive and Lucid Motors have reported billions of dollars in annual losses and both recently announced layoffs. 

Faricy, former vice president of Amazon Marketplace who was appointed to lead the automaker in March, said the company can succeed where others have failed because of its simplistic product, customer-focused business strategy and break-even point of roughly 80,000 vehicles a year.

The break-even point is just over half of the 150,000-unit production capacity the company plans to have at its assembly plant in Warsaw, Indiana. Slate is continuing to build out that facility while also producing prototype vehicles.

“We have a different cost structure and a different business model than other automakers have,” he said, citing the simplicity of Slate’s vehicle and manufacturing process as well as the ability to customize the EVs.

Slate’s flagship product is a two-seat, $24,950 bare-bones electric pickup truck that’s so basic the speakers are optional and it has crank windows. The truck can be converted into a five-passenger sport utility vehicle for an additional $5,000. The vehicles will feature a Slate-estimated EV range of 205 miles, 181 horsepower and 195 foot-pounds of torque. 

Its performance pales compared with much pricier electric pickups and SUVs but is in line with similarly priced vehicles.