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Ars Technica Covers The Atvm Loan Hoarding Catastrophe

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Thomas Malkin

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I've responded to this challenge in an edit to the original post for this thread so it may have greater visibility. So, no. I will go on saying it, because it is true, though not written-down-true, because the ATVM loan people are weasels and have made Elio Motors require the confirmed orders themselves, so the ATVM had deniabity of ANY requirement that could be numerically or technically met. They added the new requirement in June 2016, worded most entertainingly. Read my post, all the links are there.

The ATVM people stated that reservations or market acceptance was no longer sufficient, but Elio Motors could entertain them with suggestions as to what could be sufficient. Truth. They left it up to the applicant to negotiate acceptable terms for the loan (unilaterally, it turned out).

As the August 2016 Elio newsletter stated, they *chose* confirmed orders as a method of complying with the new requirements which I have posted below. They were completely at sea, as the ATVM people would not tell them what the hell they wanted.

HERE. It was all on Google, and covered HERE, on this forum, by me, back in August 2016.


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Rob Croson said:
This is absolute garbage FUD!

65k reservations was NEVER an ATVM requirement.

The DoE NEVER demanded "verified purchase orders".

The DoE NEVER, NEVER, EVER demanded "fully-paid purchase orders"!!!!​

Stop spreading misinformation and FUD!​

EM was very explicit that the 65k reservation goal was an internal EM goal, that had nothing whatsoever to do with the ATVM loan requirement. There was concurrent timing in the release of several announcements that you have obviously conflated, and then embellished with your own headcanon.

1) The DoE releasing updated guidance on the ATVM loan program, adding specific requirements for an "ultra efficient vehicle", which did not previously exist. This change made it so that the Elio clearly qualified for the ATVM program.
2) The DoE added amplifying information in the loan program guidance stating in section II. 2) H. Additional Guidance on Adequate Future Sales: "...market studies and non-binding customer reservations to purchase vehicles will not be sufficient to establish adequate future sales." This is the origination of the lock-in commitment program for EM. This is the guidance that allows you to prove financial viability even if you have no sales to prove it. You prove it by binding commitment. The DoE implies, but never specifically states publicly, that an "all-in" reservation simply was not a firm commitment. This is actually supported by EM's own definition that an all-in reservation was NOT a commitment to sell or buy a car.
3) EM announcing the introduction of the "locked-in commitment", to fill the requirement of point #2 above.
4) EM stopping of reservations at 65k. this was explained as simply: That's enough reservations to fulfill a significant portion of our first year production.

We've covered this before. Provide a link to support your accusations, or stop spreading FUD.

For your reference, the ATVM loan program guidance document can be found here:
https://www.energy.gov/sites/prod/f...ce_for_Potential_ATVM_Applicants_June2016.pdf
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Rob Croson

Rob Croson

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Thomas Malkin said:
EDIT: response to source challenge.
As you say, the ATVM loan people did not "require" confirmed purchase orders. OK. But Elio Motors changed to confirmed orders to provide what the ATVM newly required: proof of "market acceptance" and "long term viability" that went beyond mere reservations.
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This was not a change of requirements. It was the DoE providing an alternate way for start-ups to prove that they could repay the loan. The problem with EM's application for the ATVM loan was that EM had no income, no product, and no financial history to demonstrate that they could repay a loan. The DoE ammended their loan guidance to allow these kinds of startup companies to apply, but needed some way for the applicant to demonstrate market acceptance. You can't accept market studies or feasibility studies or any of that crap, because lying with statistics is child's play. They had to be binding commitments. For anyone who followed the Reg A+ program, the reason should be obvious. EM's Reg A+ program brought in barely 1/3rd of the indicated amount, because the program let anyone put in any stupid amount they wanted, with no expectation of ever having to actually pay it.

How EM was supposed to prove market acceptance was up to them. EM chose to go the confirmed/locked-in route. Could they have done something else? I have no idea.

As quoted by Elio Motors below, the new ATVM loan requirements were that "market studies and non-binding reservations to purchase will not be sufficient". That they interpreted to mean confirmed purchase orders. What the hell else could it mean?
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A binding commitment to purchase is NOT a "confirmed purchase order". It is in no way, shape, or from, any kind of "purchase order". A purchase order is a specific legal document that would bind EM to sell a vehicle, and a customer to pay for one. If EM were to actually accept and confirm a PO, they would in fact be selling cars, which everyone knows they cannot produce. That would be outright fraud.

And at no time did EM or the DoE ever even hint that a "fully paid purchase order" was a requirement. EM has continually refused to even contemplate prepayment up front as a fund raising method, for reasons whihc should be blindingly obvious.

And HERE are the new 2016 ATVM loan requirements that made Elio Motors require "binding commitments", that is to say: Confirmed. Purchase. Orders.
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WRONG!
A confirmed purchase order is a specific legal document which would require EM to produce and deliver a car. Failure to produce and deliver that car would be a breach of contract, opening up EM to class action lawsuits. Even failure to deliver in a timely manner would be breach of contract. You will never find anywhere that EM ever referred to the commitment process as any kind of "order", let alone a "confirmed purhase order".

And why you may think this is an irrelevant matter of semantics, it is most certainly not. The difference is critical.

As for the 65k number, per EM's lock-in offer letter:

"The 65,000 number relates to the total reservations in which our non-refundable reservation holders have the opportunity to set the base price of their Elio at $7,300, with the opportunity to save an additional $300 by signing a binding commitment."​

That's it. That's all that the 65k number was. A limit on the number of people that could get the $7,300 price with an offer for a $7k option. This had NOTHING to do with the ATVM loan or the DoE. No mention of anything to do with loan acceptance or the ATVM/DoE at all.

So. The ATVM new requirement was that Elio Motors negotiate with the ATVM board a method of proving market acceptance and something more binding than mere reservations. Elio motors chose confirmed purchases.
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No! Absolutely not. They chose to use a program they referred to as a "binding commitment". This is NOT a purchase order!

They were never gonna give Elio a loan. ANYone a loan. The ATVM loan process was a black box that when on which a button was pressed, said "No."
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That is quite possible. I'm not arguing against that. If you will notice, the parts I objected to are the parts I quoted.
* The 65k number had nothing to do with the ATVM por the DoE.
* Neither the DoE nor EM ever required any form of "confirmed purchase order", let alone a "fully-paid purchase order" as you claimed here.

The debate over the DoE's intent to approve or not approve the loan is all pure speculation on everyone's part. I'm not gonna go there. None of us have, or could have, any proof. The only people that really know aren't talking, and probably never will.
 
Elio Amazed

Elio Amazed

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Man, you have no-one left to inflame! Gotta hand it to the members here for not taking the bait.
Looks like you'll have to try some other forum if your motive is to stir up a debate.
And... quit yelling. David Brower is the only one allowed to do that.
 
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davzway said:
JUST ANOTHER PART OF SCAM,, PERSONALLY AM 'ALL IN', TAKING PAUL ELIO AT FACE VALUE,, WANT TO BELIEVE; HOWEVER, NEVER SELL STORY THAT PAUL & CO. DID NOT KNOW STATUS OF 'LOAN' AND FACT 'NO LOANS BEING ISSUED',,,THERE HAVE BEEN TOO MANY MILLIONS OF $$$$$ taken in and NOTHING produced, going on for too long,, LOOK at initial SEC Filing,, may NOT have been requirement for LOAN, having SO MANY ORDERS WITH DEPOSITS IN ONE FORM OR ANOTHER,, IT IS a CRIME that NOTHING was produced to fulfill those orders,, EVEN having an ELIO A car that was a Higher price,, apply deposit to 'A' car or wait and maintain place in line for B car at lower price when the BIG GM plant goes into production. If NOT a SCAM,, worst mishandled manufacturing company can remember.
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The SEC report should be out by the end of the month, everything should be clearer then.
 
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