Send Email To Dop To Show Support For Elio Motors Loan.

[eddie66]

I can't see it.

Thanks Jay, I think its another one of those protected images that won't paste. I deleted the post.

 

[tonyspumoni]

I too hope I am wrong and no one would be more delighted to be wrong than me, but I fear that I am not. Sure, there are a lot of suppositions in what I said but no more (and likely a lot less) than those who hold the view that the hard part was applying and now EM gets the loan next week.

I'm well aware that DOE is a standing department, but while the Administration will be happy to take credit for a loan and a successful launch, DOE will get all the blame if it goes south and will therefore do their job which, in the past, has been on the timescale of quarters and years. And all the stuff about 'applying being the hard part' is opinions too, though from some folks closer to the bone. Those folks do not, however, have any more impact on the process, despite present or former proximity. Has 'fast track' been defined? Nope. Words. Politics.

If this is such a slam dunk, then why hasn't Paul said so? Probably because either (a) it isn't a slam dunk and/or (b) it is but the timing remains in doubt. I have said elsewhere "EM gets the loan". What I'm am saying is that it is Pollyanna-land to think it FUNDS this year or even early next.

 

[outsydthebox]

I too hope I am wrong and no one would be more delighted to be wrong than me, but I fear that I am not. Sure, there are a lot of suppositions in what I said but no more (and likely a lot less) than those who hold the view that the hard part was applying and now EM gets the loan next week.

I'm well aware that DOE is a standing department, but while the Administration will be happy to take credit for a loan and a successful launch, DOE will get all the blame if it goes south and will therefore do their job which, in the past, has been on the timescale of quarters and years. And all the stuff about 'applying being the hard part' is opinions too, though from some folks closer to the bone. Those folks do not, however, have any more impact on the process, despite present or former proximity. Has 'fast track' been defined? Nope. Words. Politics.

If this is such a slam dunk, then why hasn't Paul said so? Probably because either (a) it isn't a slam dunk and/or (b) it is but the timing remains in doubt. I have said elsewhere "EM gets the loan". What I'm am saying is that it is Pollyanna-land to think it FUNDS this year or even early next.

What I "know" is what I have read. And that is subject to change, without notice, for any reason, or for no reason at all....and that is: 1) EM says they have the money they need, for now. 2) They are expecting around $70 million from the sale of unnecessary equipment. Now, lets wait for the big announcement at the SEMA show!

 

[Kuda]

Snipped: What I'm am saying is that it is Pollyanna-land to think it FUNDS this year or even early next.

Remember the "Due Diligence" statement? Elio must show 'ability to produce'.
They've already proved solvency to produce, but haven't actually done it yet.
I wouldn't be surprised if the ATVM comes in after the first years reservations
& fleet sales are fulfilled & a 'political' point is made in time for the '16 Election.
JMO............

 

[goofyone]

Remember the "Due Diligence" statement? Elio must show 'ability to produce'.
They've already proved solvency to produce, but haven't actually done it yet.
I wouldn't be surprised if the ATVM comes in after the first years reservations
& fleet sales are fulfilled & a 'political' point is made in time for the '16 Election.
JMO............

Actually it would not surprise me if Elio Motors can get the loan if they can prove they will not fail before the 2016 election cycle is over. With 36K+ reservations in hand and the very real likelihood hood of selling out the first years production well in advance it would be a huge political gain to loan Elio Motors the money they need to produce these vehicles starting in late 2015 and continuing through 2016.

I can already see politicians lining up in front of the Shreveport plant during the 2016 election cycle to take credit for creating thousands of American manufacturing jobs which deliver 10's of thousands of affordable and environmentally friendly super fuel efficient vehicles to average Americans.

 

[ks6c]

I'm sure the founders are wrestling with the standard decision founders face when investing early. Risk versus reward and how much risk they want to bear.

They are already on the hook for probably $50M. If they get too greedy and want to maintain the company as closely held, then they will have to double down and pony up the funds to get into production. That won't be milestone based in the conventional sense because they are already on the management team and they would be fully informed on progress on the vehicle. We can safely assume that every major founder is represented on the board, either in person or by proxy.

I still think ATVM is a clever ploy. Second round capital - evaluating the opportunity to invest today - would have to have in the back of their minds the possibility that ATVM funds and Elio no longer needs them, which would worsen their position with respect to current shareholders. Think of it as greenmail the current investors are using. Would Lichter like to see his shares remain undiluted and yet get someone else to bear the risk? Um, yeah, he would. But his investment could go south if he relies on ATVM and thinks that unless ATVM happens he won't throw in more cash.

Still, time is short to either get enough cash to make this a going concern for fall of 2015 deliveries from the founders, keeping their share of ownership undiluted but with them bearing all the risk, or go out to second round investors, reducing their risk but also diluting their ownership stake.

And before anyone says something foolish like 'Elio won't let them own the company' let them offer Paul $1M for, what, a share of future profits? Anyone who invests will get a share of the company. Period.

I think the motivation for the ATVM loan is so much simpler - the founders are looking at two choices, put up more of their own money and forgo other investment opportunities (lots of eggs in one basket), or get 4% money from the feds (with no ownership dilution) and reserve their money to work on another investment with a greater than 4% opportunity for return. Two investment opportunities for the price of one...

Who wouldn't take that play?

 

[Chris F]

I disagree with none of this. All the points are true. However we are speaking of this three-step process as if this were strictly a question of the height of the hurdles and not also the distance between them. The first may be tallest but the others are DOE's to jump over. What if there are five levels of approval ("Just a formality Elio Motors, don't worry") and, with the holidays, the level 3 person is on vacation? Elio Motors has a refreshing damn-the-torpedoes-full-steam-ahead attitude to problem solving. Why is the vibe here that DOE will be similarly motivated? DOE doesn't get a cut - they get 4% APR. Where the win is for DOE? Their win is to get paid back, not to make the loan.

Furthermore, if you read Moniz's recent Silicon Valley interview he said that DOE wants to multiply their power to drive innovation by forming equity partnerships with private investors with DOE kicking in money and private equity matching it or kicking in too. Practical details? None offered. What if DOE is doing that here and, despite the attractive nature of ATVM the hitch is that to get all the money EM has asked for, they need to offer an equity stake to that DOE private equity partner? DOE sounds very much like they are making up the rules as they go along here in so many ways. Where in government do we ever see this yield fast results? Everyone carps about the government, which has made its administrators terrified of risk lest they be hounded out.

The bottom line is that DOE is just too much of an unknown, unpredictable quantity around which to wrap a very tight production schedule. If it transpires that ATVM success and The Plan are one, then the Elio is highly unlikely to roll of the lines by fall of next year. Sorry to be a downer, but unfortunate and unpopular though this view may be, it is likely to be true. They need money and they need it now. ATVM does not have 'now' in it.

I have to disagree. EM is applying for a loan program with existing protocols, requirements and procedures. They are not making it up as they go along. This is not an equity program; it's purely a loan program with a specific budget that several car companies have already taken advantage of. The bureaucrats in charge of the program have a win when they fund a loan and it gets paid back. The people that approved the Tesla loan probably got bigger offices. That's their motivation. I'm sure EM knows the timelines involved and has factored them into its plans. EM lucked out when the loan program got restarted at a time advantageous to them.

 

[Ekh]

To once and for all clear long standing confusion on one aspect of the loan requirements:
"The applicant must be financially viable without the receipt of additional federal funding for the proposed project other than the atvlpm loan."
http://energy.gov/sites/prod/files/2014/03/f14/applicantguidance.pdf

That's been my concern all along, but I've been told that there are actually two types of loan, and the one Elio is applying for doesn't carry this stricture. If that's wrong, I'm surprised DOE is entertaining the application at all ... or else, Paul really does have some very large investors ready to play back-up. The ATVM program is really aimed at nudging the big guys to adopt more efficient / advanced technologies, not at start-ups. But who knows, it's gone this far ... I am hoping for the best.

 

[wayne kemp]

Actually it would not surprise me if Elio Motors can get the loan if they can prove they will not fail before the 2016 election cycle is over. With 36K+ reservations in hand and the very real likelihood hood of selling out the first years production well in advance it would be a huge political gain to loan Elio Motors the money they need to produce these vehicles starting in late 2015 and continuing through 2016.

I can already see politicians lining up in front of the Shreveport plant during the 2016 election cycle to take credit for creating thousands of American manufacturing jobs which deliver 10's of thousands of affordable and environmentally friendly super fuel efficient vehicles to average Americans.

NO POLITICS, goofyone. LOL

 

[Rickb]

Actually it would not surprise me if Elio Motors can get the loan if they can prove they will not fail before the 2016 election cycle is over. With 36K+ reservations in hand and the very real likelihood hood of selling out the first years production well in advance it would be a huge political gain to loan Elio Motors the money they need to produce these vehicles starting in late 2015 and continuing through 2016.

I can already see politicians lining up in front of the Shreveport plant during the 2016 election cycle to take credit for creating thousands of American manufacturing jobs which deliver 10's of thousands of affordable and environmentally friendly super fuel efficient vehicles to average Americans.

With all of the government support and assistance EM or any new startup company requires to establish actually becomes successful........the politicians that helped make it happen should line up.........generally it's the politicians who opposed it initially that line up to take the credit and somehow convince their constituents.