My personal mission for Lycan has remained the same since day one: to bring Filipino innovations into the world by bringing talented individuals together to create a product that brings positive impacts in the hopes that one day, Lycan would contribute to the Philippines' transition from being a consumer country of imported goods to one that produces and exports them proudly.
This ambitious mission is what I brought to the table during the Philippine Startup Week 2024's Green Tank Challenge event where I shared Lycan's progress and developments -- and our plans for 2025 -- towards building a sustainable business ecosystem consisting of five key pillars: vehicle development, manufacturing, distribution, battery & infrastructure, and technology.
And I'd like to share our progress with you in this journal.
After four excruciating years of no income, we've finally made our first revenues. But we're still far from profitability.
VEHICLE DEVELOPMENT
2024 was still about building, testing, and refining. While we have completed our The Great Philippine Road Tour 2024 campaign where the Lycan team has travelled more than 6,000 kilometers using our EVs across Luzon, VIsayas, and Mindanao, we've pushed hard towards optimizing our vehicles for production.
For context, building a fully-functional prototype is vastly different from building a production model. During prototyping, we are more concerned about user experience, safety, durability, and functionality. But when it comes to building a production model, our focus is then turned to operation efficiency, designing for manufacturing for mass production, machines & equipment, raw materials & manufacturing processes and methods, compliance & standards, risk management, waste & resource management, manpower training, finance & capital, distribution & logistics, and several others that are too many to mention. With these in mind, I take off my visionary hat and wear the strategic operations and manager hard hat to take on new challenges.
While I already have enough confidence that we can develop new models and vehicles with sufficient time and resources, as evidenced by our latest prototype project The BubbleTuk which we designed and built in less than two months, getting EVs to production-ready status takes a whole new level of tasks and preparations.
But we're already getting there as we are in the final stages of getting the Atlas II STD EV model into a production-ready status. All we need now are financing partners to fund our order fulfillment and open monthly installments to customers -- or at least a way that we are able to fund the entire production run.
In the Research & Development (R&D) side of the business, we are now preparing the Atlas II Pro EV model for production preparations, developing the updated designs of the Lycan Shyft and G6 models for the late-stage prototyping phase, and are beginning to work on some new concepts for an off-road adventure bike and a standard on-road bike -- all of which I hope we can showcase before the year ends. No promises, but we'll try.
With the early orders and reservations for the Atlas II STD, Atlas II Pro, and G6 EV models, and the commissioning of the BubbleTuk development, I'm proud to say that after four excruciating years of no income, we've finally made our first revenues. Once production begins, I'm hoping and praying for higher, more consistent revenues and cash flows.
But we're still far from profitability.
Outsourcing our entire production is not an option. If we get to manufacture and produce our own creations, imagine the extents of what technologies we can make in the future and how many jobs and opportunities we can build for Filipinos.
MANUFACTURING
During the second quarter of this year, we've begun building and developing our first small-scale production facility in anticipation that we would be starting production by June or July of 2024. But as developments go, we experienced delays and challenges that pushed our production further to 2025.
While this seems counterproductive to our objectives, this gave us more time to further refine our processes and gather more early reservations to negotiate better prices with suppliers of raw materials and components.
This in turn, allowed us to drive our costs (and prices) down by leveraging on economies of scale and by bringing some manufacturing procedures in-house. These significant developments with our manufacturing efforts would benefit our future models in terms of costs, production speed, volume, and flexibility in vehicle design and development.
This scene from The Founder perfectly visualizes our production efficiency efforts to be able to produce more units with fewer resources
The next challenge we have to address now is how to fund the production of our EVs without passing on the burdens to our customers.
DISTRIBUTION
We are still a few months away from distribution, but one of the aspects we are working on is the delivery and logistics system to bring our EVs to our customers, especially for our customers in the Visayas and Mindanao islands.
Thankfully, several entrepreneurial individuals have come forward with interests to open Lycan franchise dealerships in areas that are still beyond our reach. By having shareholding franchise business partners, we'll soon be able to reach and distribute our EVs to more customers nationwide.
But before this happens, I'm committing to opening a company wholly-owned dealership first within Metro Manila to test the waters before inviting our prospects back into the business.
My long-term solution to distribution, though, is decentralizing our production facilities by creating several "microplants" in key areas to produce our EVs. This not only cuts down transport costs, it also allows faster flexibility in R&D for specific regions that require unique sets of EVs.
BATTERY & INFRASTRUCTURE
Batteries, infrastructure, and EVs go hand-in-hand, and to truly push for the transition of Filipinos to EVs, they must be established. ICE vehicles are dominant in the market because there are thousands of gas stations and repair shops nationwide that any vehicle, regardless of make and model, can benefit, which the EV market still does not have.
Putting up charging stations is the obvious answer. But having charging stations alone defeats the purpose of a quick "gas-and-go" system that allows people to move. Even with the fastest chargers available to two- and three-wheelers, it still takes time to charge and there are inherent risks of quickly charging batteries that cannot accommodate the high load currents.
This is why swapping is a more sustainable answer to this problem. However, manufacturers have different battery designs and there are no standardized battery designs that fits in one battery swapping machine. Private companies and organizations who attempt to build a network of EV battery stations for different brands will fail primarily because of this reason.
And thus, to truly help in the mass adoption of EVs in the Philippines, the challenge of building an infrastructure for Lycan customers fall into our responsibility.
This dilemma, on the other hand, opens a new opportunity for Lycan to capitalize on. While this plan of building a network of EV infrastructure is and will be capital-intensive, this proposes a venture that several stakeholders including customers, establishment partners, investors, Lycan, and the general public can benefit from.
The Lycan battery station is still in development and I am aiming to begin our first pilot testing hopefully within 2025.
TECHNOLOGY
In 2021, we opened the idea of integrating smart technologies such as AI and IoT into vehicles to create an interconnected experience. While we made significant strides in this area of development, it fell behind due to the lack of resources and manpower to continue its developments.
This, however, does not mean that we are scrapping this idea aside. We will still push towards creating smart EVs in due course once our essential foundations are in place and you'll soon get to experience my vision of smart vehicles, an AI co-pilot, interconnected vehicles, a smart helmet, and the BuilderX platform become a reality.
Just give me some more time to work on it.
THE "CHICKEN AND EGG" IN THE ROOM
Everything about Lycan is a prerequisite of another and requires intense amounts of time, planning, and resources to execute and bring into fruition -- if we want massive EV adoption, we need to build more footprints.
And I understand why almost all of the institutional investors and Government agencies we speak to shy away from our proposals is either because:
there are vast amounts of risks that are outside their control,
Lycan is asset-heavy,
the capital requirement is too much for less equity in Lycan,
they are waiting for more reasonable traction from us, and/or
they have limited expertise in the electric vehicle development and manufacturing space to support and guide us
as the Philippine startup scene, for the most part of the past decade, have been in software, FinTech, SaaS, eCommerce, and social enterprises, and the industry we are in generally is something new to the Philippines. And hardware players in general, including ourselves, find it challenging to acquire external support locally.
Ah, the gift and curse of ambition and innovation.
But on a more positive outlook, there have been several organizations that are slowly shying away from software and moving towards AI, energy, and hard/deep tech which is a good sign for us, especially since much of the promising opportunities and invitations we get that have lesser stringent requirements and more EV expertise come from abroad.
Until then, I have been focusing the entire year to creatively think of ways to expedite these developments with fewer resources and be as independent as we can.
So far, I am positive that organic growth is possible because after all, the likes of Royal Enfield, Norton, Indian, and Triumph born in the late 1800s and early 1900s made it without all these startup chicken and eggs. We just have to do what they did and continue to #ChallengeTheNorm
See the potential in our venture and want to take part in this legacy-building endeavor? We're open to partners, investors, co-producers, team members, and co-founders. Send me an email at jg@lycan.com.ph
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