The Slate truck is a basic body that you can customize to your heart’s content, but the 25k price is what has people’s attention.
A new automotive startup is betting that Americans are so fed up with high car prices they will consider buying a two-seat, all-electric pickup truck with hand-crank windows and no radio.
Slate Auto, a Michigan-based carmaker backed by Amazon.com AMZN 1.74%increase; green up pointing triangle founder Jeff Bezos, is racing to begin production later this year of its first model: an overtly spartan, compact truck that will start at $24,950, the company said on Wednesday. Trucks like these have been missing from U.S. roads for over a decade.
Car buyers today have only eight new models to choose from under $25,000, with automakers warning that it is difficult, if not impossible, to turn a meaningful profit on such vehicles.
Slate thinks it can buck that trend. “A U.S. automaker can make an affordable vehicle—and not only an affordable vehicle, but an affordable vehicle that people love,” said Peter Faricy, Slate’s chief executive.
Faricy said gross margins will be positive for the base truck, and he expects costs to decline further for customers once Slate proves itself to its suppliers.
The company’s cost-cutting measures are novel: trading exterior paint for customizable $500 vinyl wraps, offering a dashboard mount for a smartphone instead of a navigation system, and selling a DIY-style add-on kit that transforms the pickup into a five-seat sport-utility vehicle
But will car buyers go for something as austere as Slate’s truck—let alone an electric one?
A little over a week after Slate revealed the truck and its anticipated price, President Trump imposed a 25% tariff on imported auto parts. By the fall, Congress had eliminated a $7,500 EV tax credit that would have likely brought the truck’s price below $20,000.
The startup is a homecoming of sorts for Faricy. Slate’s headquarters in Troy, Mich., sits about a hundred yards away from his childhood elementary school. He had stints with Ford Motor before going to Amazon, where he helmed the build-out of Marketplace, which allows third-party sellers to operate on the company’s online platform.
Faricy joined Slate in March, succeeding auto-industry veteran Chris Barman as CEO. Barman remains with the company in a different role.
Faricy said he was surprised by parts suppliers charging Slate a “startup tax” because it is new and, therefore, riskier. He knows Slate is an underdog in the rigid car business, where few startups have ever emerged and survived long term. It is a familiar feeling, he said. In his early days at Amazon, in 2009, many outsiders still viewed the now-behemoth as an underdog.
“If we can execute and launch on time and prove this, I think we have a chance to build an enthusiastic customer base,” he said.
Faricy said Slate has been built to survive independently of factors such as EV tax credits and to absorb hiccups in the supply chain. “When people ask, are you dependent upon current or future government incentives? The answer is no,” he said.
Faricy said that some of Slate’s biggest advantages are what it doesn’t have: a paint shop for vehicles and a metal-stamping plant, both costly expenses for an automaker. At the company’s factory in Warsaw, Ind., which sits on the campus of a former printing press, a robotic system will weld together the body and frame rather than use a metal stamper.
The company debated eliminating many common new-car features to hit its price target and focus on what “actually matters to drivers,” said Eric Keipper, Slate’s head of engineering. As a result, the truck lacks ambient lighting and adaptive cruise control, which adjusts its speed based on traffic flow. But it comes equipped with standard cruise control and modern safety features such as automatic emergency braking.