“Instead of having an $85 million fleet, we suddenly had a, say, $56 million to $57 million fleet in one day,” Painter said in an exclusive interview.
The combination of Musk’s price cuts and Tesla’s accumulation of more inventory than it’s ever had before — meaning it’s easier than ever to quickly get a Tesla — pushed Painter’s startup to the brink.
“We were very vulnerable to our lenders in that moment,” Painter said.
Autonomy ultimately went through a forbearance process while he worked to recapitalize the company with a new $12 million round of funding. He also had to pare back operating costs, which included shrinking Autonomy’s staff to just 45 employees, from around 120.
Suffice it to say this brush with depreciation risk has left Autonomy well short of the goal Painter announced in August of last year to order 23,000 EVs from 17 different automakers. It’s at around 1,300 cars, and the CEO believes the service will require about 3,000 to break even.
To get there, Painter thinks Autonomy will need $20 million or so more in funding, which he believes will be enough to unlock the roughly $100 million borrowing capacity required to expand the fleet.
While Autonomy’s pool of cars is still fairly small, Painter said the service is operating well. A new partnership with American Express Co. has brought in more than 1,000 reservations. He’s optimistic that the Federal Reserve’s efforts to tame inflation by raising the cost of borrowing could benefit Autonomy.
“As interest rates go up, it makes a car loan less and less of an option,” he said. “Anybody who makes greater than $100,000 a year is going to be OK, but anybody who is at that $100,000 or lower mark is just simply not going to have access to an EV.”
Of course, companies like Autonomy may not be out of the woods yet with respect to their vehicles losing value. While EV sales continue to grow, the pace has slowed. And Tesla isn’t the only one with inventory issues: Cox Automotive estimates there was 103 days’ supply of new EVs available at the end of June, compared to 53 days for the overall industry.
“Market supply remains heavy, so we would expect to see continued incentives in the future,” said Jeremy Robb, Cox Automotive’s senior director of economic and industry insights.
