Slate Auto, backed by Amazon.com founder Jeff Bezos, could have the secret formula to making disruption in the pickup truck market that includes Tesla Inc (NASDAQ:TSLA), Rivian Automotive (NASDAQ:RIVN), General Motors Co (NYSE:GM) and Ford Motor Co (NYSE:F). The secret could be cost. Here’s how Slate Auto is solving the key issue.
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Slate Auto Unveils Pricing
Originally planning to launch a bare-bones electric pickup truck for under $20,000, the ending of the $7,500 federal EV tax credit put that pricing plan from Slate Auto into question.
On Wednesday, the company unveiled its Slate Truck, which will come with an initial starting price point of $24,950 with units expected to ship in late 2026.
Labeled “the most affordable truck in America” and with phrases like “get it how you want,” the basic truck will come with key features with consumers having to pay for some extra features and amenities.
Among the included features are:
- Heat and A/C
- Latch systems
- Airbags
- Backup camera
- Keyless entry
- Locking frunk
- NACS charger
The company said that more than 200 accessories can be added, with 80% of them priced under $500. One of the more expensive add-ons is the conversion kit, which costs $5,000. That kit can take the two-seat pickup truck into a five-seat SUV and back again.
The Slate Truck has an estimated 205-mile range.
There is a non-refundable deposit of $300 for the truck, with customization needed to complete the order. The company previously had more than 180,000 reservations based on a $50 refundable deposit, a number it now hopes to turn into real orders.
Slate is building the Slate Truck in Warsaw, Indiana, at a plant that could have annual production capacity of 150,000 units.
The company said Wednesday that vehicles can be picked up or delivered once they are completed.
Can Slate Auto Succeed?
The new pickup truck will take on legacy automakers like Ford and GM, with Ford often dominating the pickup market with the F-Series. Ford previously launched the electric F-150 Lightning, which became a bestseller before Ford put the vehicle on hold.
Electric vehicle companies such as Tesla and Rivian have also launched the Cybertruck and R1T, respectively, but with significantly higher starting price points than Slate Auto.
Slate Auto has raised significant capital and is backed by the likes of Bezos and Los Angeles Dodgers owner Mark Walter.
While many automakers outside of Tesla have sold their vehicles at a loss and been unprofitable, Slate Auto is focused on prices and margins from the start, surprisingly enough with their low-cost model.
Slate CEO Peter Faricy told CNBC that every Slate Truck produced will be gross margin positive. The CEO said the company aims to have positive free cash flow and EBITDA by 2027.
“It’s an ambitious goal,” Faricy told CNBC. “No other automotive company has been able to do that before. So it’s ambitious.”
A focus on margins and profitability could put Slate Auto in better shape from the start as other electric vehicle companies like Lordstown Motors, Fisker, Lucid Motors and Rivian have struggled with losses and layoffs, and in some cases bankruptcy.
Faricy said 80,000 vehicles delivered a year could be the break-even point for the company.
The Slate Auto CEO said the company will continue to look to raise capital ahead of ramping up production and beginning deliveries. Faricy said it is likely too early to go public, but wouldn’t rule out a future IPO.
“We’re going to constantly take a look at what our options are. Certainly, going public will be one. 2027 is probably too soon, in my book.”
Image Via Slate Auto
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