Slate opens preorders for low-cost electric pickup

Slate Auto is opening preorders for a $24,950 electric pickup as the startup tries to prove a low-priced, stripped-down EV can be sold profitably. Chief Executive Peter Faricy told CNBC the company expects every vehicle it builds to generate positive gross margin, a target that would set it apart from several money-losing EV startups.

Faricy said Slate is aiming for positive free cash flow and positive earnings before taxes, depreciation and amortization by 2027, according to CNBC. He described the goal as ambitious and said the company’s plan depends on a simpler vehicle, a lower-cost production setup and a business model built around customization.

The Michigan-based company is backed by investors including Amazon founder Jeff Bezos and Los Angeles Dodgers controlling owner Mark Walter, CNBC reported. Slate has raised more than $1.3 billion across three funding rounds, including two led by Walter’s TWG Global after an earlier Bezos-affiliated round.

A bare-bones truck with add-ons

Slate’s first vehicle is a two-seat electric pickup with hand-crank windows and optional speakers, CNBC reported. The company says the truck can be changed into a five-passenger SUV with a $5,000 conversion package.

According to Slate figures cited by CNBC, the vehicle is expected to offer 205 miles of range, 181 horsepower and 195 foot-pounds of torque. Its performance is below that of more expensive electric pickups and SUVs, CNBC reported, but is closer to vehicles in its price range.

The company previously said the vehicle would start below $20,000, CNBC reported. That earlier figure included federal EV tax incentives of as much as $7,500 that were available at the time but have since ended.

Slate President of Vehicles Chris Barman told CNBC the company expects the SUV version to account for 60% of sales, even though the pickup is the base model. CNBC cited Cox Automotive data showing the starting price is about half the cost of a new vehicle sold.

Factory plan and reservations

Slate is building out an assembly plant in Warsaw, Indiana, while producing prototypes, CNBC reported. Faricy said the company’s break-even point is about 80,000 vehicles a year, a little more than half of the 150,000-unit annual capacity planned for the plant.

Deliveries are expected in the fourth quarter, and the company aims to begin running the factory through normal production processes by then, CNBC reported. Dan Tasiemski, Slate’s head of manufacturing engineering, told CNBC the company is currently building about three vehicles a day and still must complete required federal validation and certification for range, safety and other areas.

Slate has more than 180,000 reservations, CNBC reported. Those reservations required refundable $50 deposits, while preorders require $300 nonrefundable down payments.

Lower-cost design choices

CNBC reported that Slate is trying to reduce factory complexity by having each vehicle come off the production line in the same form before customers add features, covers or accessories. The vehicles use injection-molded composite exterior panels and are designed for do-it-yourself modifications.

The company is also skipping paint, according to CNBC. Slate plans to use vinyl wraps instead and says it will offer more than 100 standard wrap colors for under $500, along with more than 175 accessories, including roof racks, stereos and light covers.

The vehicle will not include a modem, large central screen or built-in infotainment system, CNBC reported. Drivers would use their own phones or tablets for functions such as navigation and music, while a small driver display shows range, speed and standard warnings.

Growth questions remain

Faricy told CNBC that Slate is still raising money when opportunities arise as it prepares for customer production. He did not rule out an initial public offering, but said 2027 would likely be too early because the company first needs to launch and scale production.

Slate plans to sell directly to customers rather than through franchised dealers, CNBC reported. Faricy said that approach should lower costs and give the company more control over the customer experience.

The company faces a difficult EV market, CNBC reported, after bankruptcies at Lordstown Motors and Fisker Automotive and heavy losses at Rivian Automotive and Lucid Motors. Slate also enters the market with an unusual two-door-only pickup and SUV plan, while Ford and Ram are preparing smaller trucks of their own, according to CNBC.

This story draws on original reporting from CNBC.