250,000 Units Per Year ?

[Smitty901]

If there is market demand and a reasonable profit to be made building 250,000 a year would become simple very quickly. The resources would flow like water to make it happen.

 

[ozarkbugg]

From the little know about Paul Elio, he seems to be one sharp cracker. The way he is going about this, says" Genius" to me. I would love to find out more about his past , but google does not have much.

 

[Edward43]

Comp, I understand your concern, but remember this is being made mostly with off the shelf parts, which I'm assuming have proven themselves already, except frame, engine and a few other original designs. Composit body means no rust, which if you live in an area where they dump tons of salt on the road in winter, makes a big difference. Only time will tell, if they hold up but I'm betting they will last at least as long, as the average low priced vehicle today.

And, like a cat, it will have 9 lives, unless the complexity makes that difficult to pursue.

 

[Edward43]

For me, it's easier to speak in specific examples rather than general terms. It's too easy for me to make incorrect assumptions from general terms.

Let's do a specific example. Let's say production starts Sept. 15, 2015. It is possible that the 500 vehicles per day rate will be reached by approximately Dec. 15, 2015. During the ramp-up time for that first 3 months of production, about 14,400 vehicles total will have been produced. During that 3-month initial period of production, there are about 65 work days. If these numbers look incorrect, feel free to correct them.

These numbers are based on what Paul Elio has stated as goals. The goals are backed up as feasible by those with experience and knowledge on this forum.

If all is going well, then the 4th-6th months could see a ramp-up that gets to 1000 vehicles per day by the end of the 6th month, again if there is sufficient demand. This would be roughly 130 work days in 6 months. During the ramp-up for the first 6 months, about 61,300 vehicles will have been produced.

One would have to assume that all is going well for Elio Motors, for these numbers to happen. All the necessary parts are present and correct. There are no natural disasters affecting supply chains or the plant itself. Insert any other delay reason here. Any sort of forseen or unforseen delay would reduce the total number of vehicles produced during production ramp-up. For our sanity and happiness, it might be best for us to assume that delays will occur, starting with Sept 15 as a production start.

If you put yourself in the CEO chair for Elio Motors, you see there are around 35,000 reservations by end of Sept 2014 (i.e. right now), and based on the above prediction, you reach that number of vehicles with about 20 work weeks of production. I'd be a bit nervous about my plant creating hundreds of cars per day during week 21 and I'm not sure if we have buyers.

It's easy to say "build them and folks will buy them", but these aren't $10 widgets. Demand really REALLY has to be there.

In this specific example, I believe I've talked myself into the idea that a good number for a reservation shut-down would be a projection for the first 6-months of production, which is 61,000.

I find it easy to follow your thinking, and commend you for it. Bean counters use very nearly the same process, give or take..

 

[Edward43]

Once they're on the road, supply and demand will be a factor. IMO.
While it'd be great if he met the 6800 price, I certainly won't grumble if/when it's a bit higher.
Ones built later may have additional features, or raw good prices may change, causing a higher price as well. That's to be expected. I much prefer he gets them built, and is able to maintain a viable income good enought to keep building them for a long long time.

Is'nt it strange how when a good price is quoted, everyone starts feeling guilty, and wants to raise it? Hmmmmm.

 

[Edward43]

I can see a scenario where Elio is close to their stated production price and eat the cost difference for the reservationists as long as they don't dip too far into their profit per vehicle. Say they do get the cost down to $7,500 per vehicle with $1,000 profit in there. They already lose $500 of that matching our $1,000 all-in reservations which only leaves them $500 to profit. If they sold them at cost as a good will jester (or to ensure we continue to support them and are happy so we keep advertising free), the car would then be at $7,000. Most people will get a few options added on and with a little creative accounting, the base car could still be $6,800 but the accessories would then make up the difference. It's doubtful that Elio could manage that because without profit, they'd be relying on green credit sales to carry them through that first year. At full tilt, they COULD build about 500/day on one line which means that the "no-profit" time period would be about 6 months. Which, if they do like most manufacturers, could carry them far enough into 2016 to introduce the "New, 2017 Elio with larger trunk, improved aerodynamics, automatic remote latte maker, only $7,650* ". The "first year" production could be however long it takes to build all the reserved cars. Anyway, sorry I rambled...

Just soak dem beans a little longer afore ya start cookin.

 

[Edward43]

Keep in mind, a really low base price, holds the volume up, but also it discourages competitors. Who's only way to compete is to be cool (in some way) enough to justify a higher price, then their volume drops off, loosing some production efficiency.

Making your more lucrative profit off of options is the better business model for Elio.

Now the trading of 'points' for fleet mpg's, that aspect actually encourages competition to jump in to get their own 'points'.

I somewhat agree, but feel that volume will be more important in the beginning, and a solid engine/tranny, (almost bullet proof). The options/aftermarket can be a separate arm building on a solid base, even a separate sale after the original.

 

[Edward43]

GM has sold over 2.2 million light-vehicles in the first 9 months of 2014. Total auto sales in the U.S. are projected to hit 17 million light-vehicles in 2015.
http://www.autonews.com/section/us_monthly_sales

Could Elio could acquire 250,000 (1.4%) of the 17 million?

• Could be a game changer for the auto industry...
• Ridiculously high mpg and ridiculously low price of the Elio could make it possible.
• Not to mention the enormous impact on used cars sales. All used cars would have lower mpg, and many, many would have higher used-car prices than a new Elio.

That is why this is such a GREAT project. And we all agree, You are exactly right..

 

[imageon]

Lets not forget that most of these vehicles will cost much more than the bace price. The automatic transmission for instance will kick it up well into the $7000.00 by its self and most will be sold with this option I think. Then there is the other stuff.
I know mine will be well into the $8500 range. Now ad that profit into the unit price structure. Now multiply that by 500 or so units a day and profit will not be a factor limiting #s made.
I think if it takes off it will go BIG!
MK

 

[JEBar]

Lets not forget that most of these vehicles will cost much more than the bace price. The automatic transmission for instance will kick it up well into the $7000.00 by its self and most will be sold with this option I think. Then there is the other stuff.
I know mine will be well into the $8500 range. Now ad that profit into the unit price structure. Now multiply that by 500 or so units a day and profit will not be a factor limiting #s made.
I think if it takes off it will go BIG!
MK

I think I've read in a few places that adding an automatic transmission will add about $1,000 .... if that is the case, the price will jump to $7,800 and with additional options + taxes+ tag+title+?, my bet is the sticker for many will be bumping (if not exceeding) $10,000 .... in addition, the 84 mpg will often be less because of city driving being mixed in .... not that $10,000 is a bad price or that 60 some mpg is bad mileage .... I just hope that those who are set on $6,800 and 84 mpg end up with numbers that they will be happy with

Jim