Announcements Post Suppliers Summit August 2015

[Trusting]

I sure hope someone at Elio Motors is reading this....

 

[Rickb]

The ATVM is in the wings and there is no guarantee it will be approved.
I think the key part may be that the applicant has to show their ability to repay the ATVM Loan with interest. Also, proof that the applicant's alternative vehicle concept meets the minimum MPG requirements to qualify.

How can any DOE loan applicant prove their ability to repay a low interest ATVM loan as a new startup company without a product to sell? There is no profit & loss financial history as a new startup business. The approval process may simply take more time.

 

[Rickb]

Your opinion of what it says.
What it actually says is...............
"In order to be financially eligible for an ATVM loan, an applicant must be financially viable without the receipt of additional federal funding for the proposed project." ............ from ----------> http://energy.gov/lpo/services/atvm-loan-program <-----------

I think the key part may be ..........."without the receipt of additional federal funding".............

Quit trying to spread FUD.

My opinion is that the key part is "an applicant must be financially viable".

 

[WilliamH]

My opinion is that the key part is "an applicant must be financially viable".

At which point we ask 'Is a business with pre orders totaling about $30 million financially viable when they have show of interest of another (about) $30 million in investment financially viable"?
My opinion would be yes. But the people making that decision are part of an organization that is almost $18 trillion in debt. Hmmmm? What would you think?

 

[AriLea]

At which point we ask 'Is a business with pre orders totaling about $30 million financially viable when they have show of interest of another (about) $30 million in investment financially viable"?
My opinion would be yes. But the people making that decision are part of an organization that is almost $18 trillion in debt. Hmmmm? What would you think?

Preorders are, $6,800 x 45,000 = $306,000,000 unless EM uses the $7,100 pricing, then it would be $319.5mil. It's prepaid that is around ?60% of reservations or $30mil. The actual terms are 'Total retail amount from preorders'(300mil) and 'Money collected from pre-orders'(30mil).
But does this constitute viability with-out the loan?

At some point, enough preorders and private investment makes a good enough case for a business loan without the AVTM, and then it is definitely viable.
Which is why I think the rule is stupid, you can only get the loan when you don't need it? Hopefully, it's not quite that restrictive in practice.

 

[WilliamH]

Preorders are, $6,800 x 45,000 = $306,000,000 unless EM uses the $7,100 pricing, then it would be $319.5mil. It's prepaid that is around ?60% of reservations or $30mil. The actual terms are 'Total retail amount from preorders'(300mil) and 'Money collected from pre-orders'(30mil).
But does this constitute viability with-out the loan?

At some point, enough preorders and private investment makes a good enough case for a business loan without the AVTM, and then it is definitely viable.
Which is why I think the rule is stupid, you can only get the loan when you don't need it? Hopefully, it's not quite that restrictive in practice.

Thanks, I dropped a decimal.
I thinking ..........."without the receipt of additional federal funding"............. means it's OK to count the ATVM loan but not another loan. Although that may all be Washington double speak.

 

[Graemexx]

Preorders are, $6,800 x 45,000 = $306,000,000 unless EM uses the $7,100 pricing, then it would be $319.5mil. It's prepaid that is around ?60% of reservations or $30mil. The actual terms are 'Total retail amount from preorders'(300mil) and 'Money collected from pre-orders'(30mil).
But does this constitute viability with-out the loan?

At some point, enough preorders and private investment makes a good enough case for a business loan without the AVTM, and then it is definitely viable.
Which is why I think the rule is stupid, you can only get the loan when you don't need it? Hopefully, it's not quite that restrictive in practice.

You have to factor in the cost of making those forty three thousand Elios, which would be around three hundred million

 

[WilliamH]

You have to factor in the cost of making those forty three thousand Elios, which would be around three hundred million

Not necessarily. It depends on what the rules say.

 

[Rickb]

At which point we ask 'Is a business with pre orders totaling about $30 million financially viable when they have show of interest of another (about) $30 million in investment financially viable"?
My opinion would be yes. But the people making that decision are part of an organization that is almost $18 trillion in debt. Hmmmm? What would you think?

Apparently you would hand over millions to a startup company with no current source of revenue (no product to sell) promising to manufacture a concept vehicle that needed the ATVM loan to do so with no other real funding options in the bank. I wouldn't risk it. Pre-orders are a positive market indicator and a source of future revenue, but that doesn't guarantee EM's financials to repay the loan until they are a viable business. I think the DOE is being justifiably cautious in waiting for the P5 and any additional info needed to make the final approval.

 

[Rickb]

Not necessarily. It depends on what the rules say.

If they don't consider the cost to build, then it's precisely the reason for the $18 trillion of debt you mentioned earlier.