Sono Motors faces insolvency
Following the demise of the Sion solar electric car, Sono Motors is apparently still in serious financial difficulties. Insolvency is imminent, as there is probably not enough money to continue business operations.
“Our auditors have expressed significant doubts about our ability to continue as a going concern,” states the company in a mandatory filing with the US Securities and Exchange Commission (SEC), as quoted by the German publication Captial – this 6K filing was already published on 6 March but has only now drawn media attention. The next audit report is expected to conclude “that our capital resources will not be sufficient to sustain operations at the time of the audit report”.
A month ago, Sono Motors decided not to pursue its capital-intensive solar car project and to focus fully on its solar business for B2B customers. But it will be a while before the solar business generates any significant profits. “We are an early-stage company with a history of significant losses that has recently adjusted its business model and expects further losses for the foreseeable future,” Sono writes. “For our solar technology products, we are still in the early development phase and have not yet started commercial production. To date, we have only entered into several letters of intent with several potential customers but have not yet entered into a binding commercial contract.”
These statements come from the ‘Risks Related to Our Business and Operations’ section, where even successful companies are obliged to list potential risks. In Sono’s case, there is also the fact that the ultimately unsuccessful Sion project has caused high expenses for a long time and will continue to cost money to wind up in addition to the development expenses for the solar products. “Therefore, there is a material risk that we could cease to exist as a going concern and become insolvent,” the SEC filing says.
But the solar business is not yet secure either. “Developments in battery technology, such as solid-state batteries, may render solar technology obsolete. In addition, developments that increase the battery range of BEVs or an increase in renewable energy in the grid could increase the efficiency of BEVs and make them more fossil-free, which could negatively impact customer demand for solar range extenders,” the document says.
The final audit report from Pricewaterhouse Coopers auditors is due no later than the publication of Q4 financials and the 2022 financial statements. This is expected in the coming weeks, but an exact date has not been disclosed. Even when asked by the German magazine Capital, Sono Motors did not want to reveal a date for the presentation of the financial statements.