Sono Motors and the Germany Problem

The German electric car startup Sono Motors is once again on a crowdfunding tour. This is already the second such campaign. The first took place in January 2021, where the Munich-based company raised €53 million in 50 days after negotiations with key investors fell through. In previous rounds between 2017 and 2018, Sono had raised 11.8 million from venture capitalists, and after the crowdfunding round, another 45 million euros from DNCA Finance and Swedbank Robur.

In November 2021, Sono Motors went public on the NASDAQ via a SPAC, which brought the company $150 million. Sono Motors has thus raised a total of around 260 million dollars to date.

Currently, Sono Motos is trying to reach 3,500 fixed pre-orders with a full payment, which would give the company a lifeline of 100 million euros to start production.

But that’s probably not nearly enough to develop, and (sustainably) manufacture a new car. As a rule, one has to reckon with at least 500 million for development and another 500 million for factory and machinery before the first car rolls off the production line. With service centers, dealer networks and the like, you quickly reach amounts far beyond a billion to start up an automotive company and keep it going.

We can see this in other (electric) car manufacturers who needed many times the amount Sono Motors is aiming for to bring the first cars to market and make a profit. In addition, in recent years, the pandemic and now the Russian invasion of Ukraine have caused supply chains to shake massively on the one hand, and commodity prices to skyrocket on the other. Even already successful companies like Lucid Motors are struggling to prioritize the allocation of raw materials or components by suppliers. The volumes of these new car companies are currently too small, and thus too insignificant, to be given preferential treatment.

Let’s look at the numbers using other electric car companies.


Tesla, for example, burned through almost exactly US$6.67 billion from 2009 to 2019, until it posted its first billion-dollar profit in 2020 and then recouped all its losses in 2021. In the meantime, Tesla came close to going bankrupt several times.

Tesla profits & losses from 2009 to Q3/2022

Lucid Motors

Another electric car startup from California, Lucid Motors, also took several years before it finally found a major investor in Saudi Arabia, which stepped in with two billion US dollars. A subsequent SPAC in July 2021 brought the company $4.5 billion, enough to complete the Casa Granda factory in Arizona and an assembly plant in Saudi Arabia and have enough cash on hand to start production. The success can be seen: the Lucid Air, delivered since October 2021, immediately became the Motor Trend Car of the Year for 2021 and 2022.


Another California company, Rivian, has raised close to $10.7 billion in investments since its founding in 2009, including $700 million from Amazon and $3 billion from Ford. Amazon also immediately ordered 100,000 electric delivery trucks, of which several hundred have now been delivered. Rivian also went public in 2021, bringing $12 billion into the company’s coffers.

The company planned to deliver nearly 25,000 cars in 2022 and appears financially secure to produce and survive for the next several years.

Faraday Future

The Chinese-American startup has had a turbulent life and several near-death experiences in its short history. But like a zombie, it refuses to die and gets back up again and again. So far, the company has raised $3.7 billion in investments in 11 rounds of funding, but just before the start of production, the company is in financial trouble again and swapped CEOs with Carsten Breitfeld, a former BMW manager for the i3, after he stabilized the company financially.

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Le dernier titulaire d’un permis de conduire est déjà né

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The fifth California company in this round has raised around $550 million in investment in 2020 and 2022 over two rounds of funding, but again, the company is struggling to start production.


After the Karma, Hrnry Fisker is launching the Fisker Ocean, produced by Canadian-Austrian automaker Magna. The company has lined up $1.2 billion in financing. One billion was raised in a 2020 SPAC.


The founders of the Swiss company have so far been rather reticent about providing information on the capital they have invested. At Microlino, which is wholly owned by the founders, we only know that their parents invested 10 million Swiss francs. But that’s not enough for development and production by a long shot. The first vehicles have already been delivered this year.


The Croatian super sports electric car manufacturer Rimac raised 875.8 million dollars in 9 rounds of financing, including from Porsche. The startup benefits from the fact that the Volkswagen Group is very interested in the manufacturer and has handed over responsibility for the luxury Bugatti brand to the Croatians.


This Dutch company, which aims to produce a car with solar cells similar to Sono Motors, has raised $35.6 million in capital in three rounds of funding so far. In fact, production of the Lightyear Zero began in December 2022 with a production rate of one vehicle per day.

Back to Sono Motors

So what can we learn from the figures of the other companies when we compare them with Sono Motors? A few things! First of all, that it takes a lot of money to develop and produce a new electric car. The current wildly fluctuating commodity prices and unstable supply chains add further sand in the gears. Furthermore, we are learning that the European and especially the German capital markets are only providing a small amount of money to raise the sums needed for a successful electric car manufacturer. The sums available are only a fraction of what American companies can raise on the local capital market.

It also doesn’t help the founders’ attitude that they see external investors purely as someone who wants to sell the company as quickly as possible and make a profit from it. As you can see with Tesla, there were losses almost every quarter for 10 years exclusively, which eventually added up to 6.67 billion until it became a highly profitable company with unbeatable profit margins. An exaggerated fear of loss of control by the founders over their baby probably plays a major role there.

So for the time being, a new car company based in Germany should not be expected to make it to production. The chances are slim. Even if the first vehicles tumble off the conveyor belt, this does not mean that the company will survive the next one to two years, let alone five years of production. The capital reserves in such a market are far too small for that.

These are things that the Sono Motors founders should not be accused of. What they have achieved so far despite all the difficulties is remarkable. Above all, they have created a loyal and apparently also financially strong fan base. But that is a bit too little for the company to remain secure.

Because requirements are changing rapidly. What was seen as the future with an electric car just a few years ago and received enthusiastically in the scene is now standard and the alternative offerings are expanding. And in the meantime, the next wave of disruption is taking place with autonomous driving, which will also soon be seen as the standard. And that requires further resources that Sono Motors has not yet factored in.

If the Sono Motors founders are to be blamed for anything, it’s that they didn’t move the company to the U.S. and tap into the capital market there. The 2021 SPAC on NASDAQ is not enough. The company should have joined the venture capital scene in Silicon Valley, Los Angeles or Detroit, and not frantically clung to Germany. A mistake that will keep the company muddling along, and could ultimately prove fatal.

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This article was also published in German.

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