Sono Motors gets green light for profit sharing
Good news for German carmaking startup Sono Motors: the German Federal Financial Supervisory Authority (BaFin) has now approved Sono Motor’s Community Participation Program. This means future reservation holders can now participate in the company’s profits.
The Community Participation Program was recently announced as part of Sono Motor’s unique new financing strategy. Not only future reservation holders can now participate in the company’s profits, but existing Sion reservation holders will also be included. Through a “community pool”, people who reserve a solar electric vehicle Sion will receive pro-rata subscription rights to the company’s profits as well as possible proceeds from the sale. In return, the founders of Sono Motors have agreed to altogether waive their profit subscription rights and contribute all their available subscription rights of 64.07 per cent to the community pool.
The founders launched the crowdfunding campaign at the beginning of December after breaking off negotiations with financial investors. According to Sono Motors, the investor’s interests would not have led to the Sion entering the European market as planned – but rather lead to a loss of patent rights and compromised the company’s core goals of enabling sustainable mobility. With this campaign, the company wants to collect 50 million euros by the rapidly-approaching end of this year. According to the most recent press release, the funding campaign has now reached 14 million euros, and around 1,000 interested parties have already registered.
“We see ourselves as a value-based and responsible company that represents a new type of entrepreneurship,” says Jona Christians, CEO and one of the founders of Sono Motors. “This includes valuing our supporters, who we see not as customers but as an integral part of Sono Motors. They make this project possible and thus set a public signal for the urgently needed transformation of transportation and sustainable, resource-conserving mobility.”
If the financing round is successful, this will make Sono Motors the first car manufacturer to primarily finance itself through crowdsourcing and transfer a large part of its profits to the community. Although this is not the first time Sono Motors has used crowdsourcing for its financing rounds, it is the first time this has represented the primary financing strategy and included a profit-sharing scheme in this way.
In October 2018, after its first crowdfunding campaign back in 2016, Sono Motors launched its second round of financing in order to generate capital for the last development stage and production of the company’s solar electric car Sion, for which the company recently released the solar car’s interior design.
For the current campaign, which has received considerable attention in Germany, participation is actioned via a points system. To ensure that previous supporters are given special consideration, this includes both the time of reservation and the amount of the deposit.