$7300 Final Price

[Coss]

Did you use a different email when you made the deposit?

Same email, I've owned that Domain name for 10 years.
And since that is my main account, and I went and check previous emails from them, I checked all of those, and same email.
EKH you know they know me by that account, I have my own avatar there in their system.

 

[Ekh]

I know... But, it could be a squeaky, rattly, barely driveable car. I was trying to go to an extreme. Perhaps you show up and it's a car but it just isn't worth even $4,000 to you. Then what? It doesn't matter, really. If you Commit, you get it no matter what. If you didn't, you can walk away losing only your deposit. (for someone only $100 in, that isn't much but to then force that person to fork over another $6,800 on something they don't want is the issue)

Is there anything about Elio that has said it will be a squeaky rattley, barely drivable car (other than that R&T fiasco, and that was a prototype)? So far, EM has made consistent claims that they want this car to be fully competitive on a quality basis with anything out there -- and that's smart, because cheap crap = Yugo, and they would lose their butts if they produced one of those! Yes, they COULD do that, but they're not insane. In fact, they have pretty high standards ... so I think the quality risk is a windmill, not a real dragon.

 

[Ty]

If they did that, they would open themselves up to a whole host of lawsuits based on breach of contract, breach of merchantability, false advertising, etc. I suspect the Elio that comes out of the factory will effectively be what we've all been seeing; whether that final product is a pile of dung will then be up to you, but if they provide a vehicle that conforms to what they've been disclosing up to the point of actual manufacturing, it might be tough to support a lawsuit.

I'm willing to put my money where my mouth is; I have faith that EM is in for the long run and is not willing to put their reputation and good will at risk by putting out a substandard product.

I've got faith too. I just meant that committing can be a big deal. If someone put $100 down, they've assigned $100 of their earnings to an Elio whether or not they end up liking it enough to follow through on the purchase. Once committed, that person has assigned $7,000 of their earnings to an Elio. That's 70 times as much money. So, it IS a big deal. I happen to think it's a great deal. I've been a little worried that they'd come out at $9000 or so and that would be harder to justify in mileage savings alone. I'm very happy that they've locked the price down now.

 

[Ekh]

Same email, I've owned that Domain name for 10 years.
And since that is my main account, and I went and check previous emails from them, I checked all of those, and same email.
EKH you know they know me by that account, I have my own avatar there in their system.

Well, then, you'll have a good laugh with them when it gets straightened out. But if it's a system wide problem ... uh-oh.

 

[Ty]

Is there anything about Elio that has said it will be a squeaky rattley, barely drivable car (other than that R&T fiasco, and that was a prototype)? So far, EM has made consistent claims that they want this car to be fully competitive on a quality basis with anything out there -- and that's smart, because cheap crap = Yugo, and they would lose their butts if they produced one of those! Yes, they COULD do that, but they're not insane. In fact, they have pretty high standards ... so I think the quality risk is a windmill, not a real dragon.

Again. I agree. I'm talking about perceived risk.

 

[Ekh]

Again. I agree. I'm talking about perceived risk.

And that may have be a real factor affecting the "wash out rate" -- the percentage of all-inners who won't commit. Let's all pray it's not a vital concern!

 

[AriLea]

My take on all of this...

Do you see how so many people are hesitant to sign this commitment, even though they have already put non-refundable money on the line? This proves why the DOE wants these commitments before they commit to giving Elio Motors a loan. If enough reservationists have faith in the company to sign this ambiguous "commitment" to purchase, then the DOE can feel confident to grant Elio Motors an ATVM loan authorization.

It is a measurement of our faith, really. Do you remember the Reg A+ campaign? $48 Million pledged, but only $17 Million actually paid money when the rubber hit the road. I think the DOE wants to avoid a similar result, and so is asking for an additional level of commitment. Seems fair to me.

To tell the truth, I think the problem was that the original reservations may not have collected enough information to establish a 'real' person. The Driver's license name seems to be the key here, that and it's a 'recent' commitment. That documents that EM or Paul or someone like an investor has not put in bogus reservations.

This is more like dotting the I's and crossing the T's kind of stuff. At least it served us to pushed Em into a solid quote on the selling price.

And I'm guessing too the ATVM guys had a hard time with language, a petty-fit that they wanted an explicit stated 'commitment' in the mix. An implied commitment probably just want enough for them.

All this says to me, that the ATVM loan is actually getting closer.

 

[Ekh]

To tell the truth, I think the problem was that the original reservations may not have collected enough information to establish a 'real' person. The Driver's license name seems to be the key here, that and it's a 'recent' commitment. That documents that EM or Paul or someone like an investor has not put in bogus reservations.

This is more like dotting the I's and crossing the T's kind of stuff. At least it served us to pushed Em into a solid quote on the selling price.

And I'm guessing too the ATVM guys had a hard time with language, a petty-fit that they wanted an explicit stated 'commitment' in the mix. An implied commitment probably just want enough for them.

All this says to me, that the ATVM loan is actually getting closer.

agreed -- but it would look really bad if the "conversion rate" of all-inners who also sign commitments is much less than 75%.

 

[Sethodine]

In theory, they can deliver the car in 2022 and I have to pay for it then.

Lets do some quick math.
From 2012 to 2016, we have seen inflation of 5.7%. This is below average, but we'll use it anyways.
If we project 5.7% inflation into the future 4 years, then by 2020 your "Locked-in" price of $7000 will be worth $6601 in 2016 money. So by locking in today, you are actually proofing your future Elio purchase against inflation.

 

[AriLea]

So it looks like EM and the ATVM folks have been discussing EM's application. And EM seems to have gotten the impression that full binding commitments at $7000 will satisfy the requirement that the applicant demonstrate the ability to pay back the ATVM loan.

But 65,000 X $1500 (I think this was the projected profit per vehicle) = $97,500,000. The loan application was for $185M. So where is the remaining $87,500,000 coming from? I wonder if EM has some investors willing to co-sign on the loan and would be responsible for making up the gap?

One really should look at the full production count. Lets round it all out for an easy but raw example.

$200m loaned. $100m from other sources. $1k profit on 240k Elios = $240m.

The $200m will actually be paid back in some number of years, as will the other $100m.
Probably EM will need to pay most of that 240m in the first year to other short term loans and facilities costs.
But a lot of that gets mixed up in the $7k cost to produce each Elio with about $4-5k going to vendor parts deliveries.
So maybe about another $1k each (or 240m total) of the money recovered after paying cost to produce, goes directly back to those factory set-up costs.

It all look very fundable, at least on the surface.

In past automotive business rules of thumb, 7 year payback was considered a standard.