Tesla Inc.’s latest German rival e.GO Mobile AG aims to challenge Elon Musk’s company with a bargain electric car for the masses.

The company is ramping up production of a battery-powered compact that will cost about half as much as the Tesla Model 3. But unlike the U.S. company, the German manufacturer expects to generate cash out of the gate.

Guenther Schuh, e.GO’s founder and the mastermind behind Europe’s best-selling electric van, initially funded the company after selling the StreetScooter, a no-frills electric van, to Deutsche Post AG in 2014.

In addition, German auto supplier ZF Friedrichshafen AG invested 135 million euros ($154 million) in e.GO as part of a project to jointly develop a self-driving minibus. The startup has now enlisted HSBC Holdings Plc to raise as much as 300 million euros for its plans to expand to four models.

While Tesla is offering sports car-like performance, e.GO is taking a utilitarian tack. Its first model, the Life, is an urban four-seater runabout. So far, e.GO has 3,200 pre-orders and isn’t taking more. Deliveries will begin in April, and the plan is to produce 100,000 vehicles annually by 2022.

Life uses many off-the-shelf parts, including the drive train, which comes from Robert Bosch GmbH, and rear lights that were initially developed for trucks. Schuh expects the company to generate positive cash flow already next year and be profitable in 2021.

Despite the grand ambitions, e.GO’s success ultimately depends on making money on an electric car cheap enough to offset the drawbacks of limited driving ranges and long charging times (as much as 9.8 hours for the Life). Schuh is aware that he’s entering uncharted waters.