Caddo Parish Commission - May 20th 2014 Meeting Minutes

[eddie66]

Will summarize my minutes questions:
"... Mr. Lichter said that Mr. Elio is selling approximately 65% of the cars in the nation." What is meant here, was the note-taker not quite accurate?

"... Answering a question from Ms. Baker regarding to the start of the hiring process, Mr. Elio stated that it depends on the signing of the contract. He informed the group of the stakeholders: Racer Trust, Elio, and Komal that are working on the contracts." What is the contract that is mentioned? As to the question of when is the hiring process to start, is it as simple as knowing the projected start of production date and working backwards 2-3 months from that? So maybe the hiring process starts in June or July 2015?

Thanks everyone!

What I'm not understanding is , if Stew Lichter purchased the GM plant, and leased the space to Paul Elio, wouldn't the proceeds from the sale of the equiptment , go to Lichter?

 

[goofyone]

What I'm not understanding is , if Stew Lichter purchased the GM plant, and leased the space to Paul Elio, wouldn't the proceeds from the sale of the equiptment , go to Lichter?

Elio Motors made a separate deal to purchase the equipment inside the plant. Regardless of what happened to the facility the equipment inside would have been available for them to use or sell.

 

[ecdriver711]

All this news is a great physiological boost for sure.

 

[eddie66]

Elio Motors made a separate deal to purchase the equipment inside the plant. Regardless of what happened to the facility the equipment inside would have been available for them to use or sell.

Thanks goofyone, I was wondering why if that equipment was so valuable why he would give it up in the lease.

 

[whattheelf]

Hey Quick...I guess you were talking to some else because you got a lot of stuff incorrect. But it sounds like your kind of emotional about the situation. Cool down a bit.
What we do know for a fact EM has to raise a lot of money!
We also know they probably cannot do it with the reservist sending money.
You are correct in the motorcycle license problem, and it is a problem today. Your family will require a motorcycle license to drive the elio in many states...which means your wife if you have one, and all your children will need one also. Not a selling point!
We know and have watched the media drive the P3 and the P4 around and reports are good and bad. A P4 that sounds like a tractor probably isn't the best way to convince the folks standing around that EM can build a quality vehicle for $6800.
We know the price of the elio will be kept under $7000 as of this week. Cost go up as the delays mount.
I know I don't live in Ohio.
I don't have to convince anyone, the results will be proven as they have been for the last 7 years and no completely operational vehicle...the basics are still not in the P4...4 concept cars and no finished elio.
I like the vehicle, that is why I am here, but I do not have faith in EM at all. Way to many errors and delays.
Pointing out these problems, I hope, will make all of us "take some action" and put pressure on EM to, as you said, do the right thing. I am glad you are done...it must be hell to believe that strongly and see the time line get longer instead of shorter.

I like the vehicle alot also, but even as one of the parrish commisioners indicated, "they are severely undercapitalized", its highly unlikely EM will make it much further. Just to get to launch entirely depends on hitting their 200M funding, and even selling off the old excess equipment for @70M only makes up less than half the gap. Thats also a hell of alot non-refundable reservations to make up the difference.

I also had to laugh in the recent meeting minutes when Paul's biggest data point for indicating demand was; that they have 125K likes on Facebook, as if more that 10/15% of those "likes" would ever be converted to actual sales, its hilarious. If Paul took the time to read all the negative comments on that page daily its fairly easy to see its not attracting buyers, its actually scaring buyers away, otherwise known as massive FUD.

For now if anyone was looking to put pressure making this happen, its private equity in all its forms you have to do that to, not EM whom I am sure is scrambling around and doing everything they can to get investors to buy in.

 

[Rickb]

Paul is smiling as 15% of the 125K likes have already preordered and that number grows daily.

I find it difficult to believe that you like the vehicle a lot. Also, any funding gap seems to be closing a little more and more with each progress update. There seems to be a business plan in action along with any engineering and design changes deemed necessary for the P5 production refinements. It would be interesting to see your business talent used to provide positive solutions to speculative problems that you work so hard to point out. I actually appreciate some of your comments, but many out of context could scare buyers away. I'm uncertain if that is your agenda.

 

[whattheelf]

Paul is smiling as 15% of the 125K likes have already preordered and that number grows daily.

I find it difficult to believe that you like the vehicle a lot. Also, any funding gap seems to be closing a little more and more with each progress update. There seems to be a business plan in action along with any engineering and design changes deemed necessary for the P5 production refinements. It would be interesting to see your business talent used to provide positive solutions to speculative problems that you work so hard to point out. I actually appreciate some of your comments, but many out of context could scare buyers away. I'm uncertain if that is your agenda.

I am definitely one of many that love the Elio as a design. As a past Mechanical Engineer and Industrial Designer for many years, building and designing very complex mixed technology products, the Elio design itself, is about as close to home run as it gets in this modern 3 wheel form factor, it has integrated some very pleasing design language and appears to have thought out ergonomics. So if this were my only experience, I'd likely even be bought in, but its not.

Mechanically its a big unknown, the new ground up build of the IAV engine is a huge unknown, as to how reliable it will be and actually performs, and then how that will translate into the unique actual driver experience within a tightly enclosed moving chassis/body. So its a huge unknown as to whether the mass market will really gravitate to it in volume, because of the dramatically different platform and driving experience, versus driving either a car, or a motorcycle. It is very difficult to believe people would actually choose this tight space as a commuter, where you would want to be the most comfortable in what is most often very frustrating commuting traffic.

Further, Paul has stated clearly, the Elio is an "and" vehicle, its seen as an addition to what you drive now, not an “or” vehicle, not to replace your car. So its admittedly difficult to imagine there is a mass market for an "and" vehicle that you may look at and really like, but likely not want to actually, or preferably drive, let alone commute in.

This is where I see the breakdown in the mass retail sales process. I see a lot of initial mass market interest, or curiousity, and maybe a brief spike in sales to a tiny group that will buy anything new, but I do not foresee a sizable and willing mass market that will adopt an entirely new driving platform, its too different, and then people start to rationalize what they would much rather spend money on for an "and" vehicle, and that usually comes down to owning something a lot more fun, like a real motorcycle, or a convertible. This is how the mass market thinks out there, which is not inside this forum of gadgeteers. People want to be comfortable when they are driving, even more so when commuting and in traffic, they want to be more in an oasis of a space, and not within a tight and highly likely noisy space.

So, this is the main rub. If, Private Equity/Investors really believed this was the next mass market big thing, that the masses would realy buy this "and" vehicle en masse, so they could see a nice ROI on their investment, they would of ALREADY closed the 150M funding gap to get to launch. They know they would have to see 100K+ reservations by now, to consider pulling the trigger. Sure, I know and expect some here will disagree with the brief thesis here, but they always forget they are just part of the tiny NON mass market early adopter group, that doesn't fully grasp the mass market mindset and landscape.

This is where my additional career experience intervenes to control my emotions over this vehicle, which is how Private Equity/investors think, because I've worked with many of these groups, and its all about business analyses, which involves detailed psychographic and demographic analyses, before PE ever writes the check, and if they don't believe the analyses and the projected numbers with a confident probability behind it, there are far better options to consider in funding.

Its about as simple as I can explain it here, other than saying there is a big difference between a great design versus a great business. There is nothing I can offer or suggest further to change or influence the success factor of this enterprise. With no further funding to 200M its game over. Without hundreds of millions of funding thereafter flowing in quarterly, its game over. Its really only a question of when if fails unfortunately. You also have to keep in mind here, even if a bonafide miracle arrives and they start selling AND producing in volume, one of a few big automakers will intervene, either by producing a competing platform for less, or even more likely influencing the political landscape that enacts legislation that stops EM altogether in several ways.

 

[pj rogers]

Outstanding what, just out standing! Even Ray Charles can see it. is he still alive...have to change it steve wonder or a NBA ref., anyway, I do disagree with some of your opinions.. sorry, there is always a fly in the forgotten drink.
The elio design, when compared to dozens of other concept cars, leaves a lot to be desired. if the design team would have actually looked at some of them, the elio would be changed quite a bit. All you folks know that..If you have checked and watched any of the videos I shared with you, it is obvious. A tuvie.com SEV, is one that fits 3 people in asmaller design and the dog or grandmother could ride along,...Mitt Romney and his trip with his dog on the roooooffff, comes to mind.
If I could have bought the evaro...I would in a minute, a corvette killer and over 90mpg.. They couldn't get financing, just like someone we all know..wink, wink, wink.
since we all know the republiCANTS hate high mileage vehicles and love big oil, the elio has a hill to climb...(hill get it, congress?..)

 

[Ty]

I like the vehicle alot also, but even as one of the parrish commisioners indicated, "they are severely undercapitalized", its highly unlikely EM will make it much further. Just to get to launch entirely depends on hitting their 200M funding, and even selling off the old excess equipment for @70M only makes up less than half the gap. Thats also a hell of alot non-refundable reservations to make up the difference.

I also had to laugh in the recent meeting minutes when Paul's biggest data point for indicating demand was; that they have 125K likes on Facebook, as if more that 10/15% of those "likes" would ever be converted to actual sales, its hilarious. If Paul took the time to read all the negative comments on that page daily its fairly easy to see its not attracting buyers, its actually scaring buyers away, otherwise known as massive FUD.

For now if anyone was looking to put pressure making this happen, its private equity in all its forms you have to do that to, not EM whom I am sure is scrambling around and doing everything they can to get investors to buy in.

$40M raised already "This will take us through engineering phase"
+$70M in "expected extra equipment sale"
=$110M total. Now, I know the equipment isn't sold yet but if you can be a little optimistic, $110M is getting closer to their goal of $200M!
+$10M from 40K reservations where 25% are all in (I won't count the $100, $500, $750 people
=$120M

I think it reasonable to think Elio would have $120M soon... and the nay-sayers can now swoop in and say Elio can't get the last $80M for this or that reason. I hope Elio shows a running IAV motor soon.

 

[goofyone]

$40M raised already "This will take us through engineering phase"
+$70M in "expected extra equipment sale"
=$110M total. Now, I know the equipment isn't sold yet but if you can be a little optimistic, $110M is getting closer to their goal of $200M!
+$10M from 40K reservations where 25% are all in (I won't count the $100, $500, $750 people
=$120M

I think it reasonable to think Elio would have $120M soon... and the nay-sayers can now swoop in and say Elio can't get the last $80M for this or that reason. I hope Elio shows a running IAV motor soon.

Thanks for this as it shows the numbers are really starting to swing in Elio's favor. It is now obvious Elio Motors truly does have access to all the money they need to complete the design, engineering, and testing phases of this project. They do need to raise more money to get the plant operational for production however as you pointed out the funding gap is narrower than it was. It should also be much easier to raise money for a project with a production facility secured and a fully engineered and tested vehicle which is what EM will have now that they have all the funding in place to complete these steps.

I believe most people have missed the one key item in the minutes which could be a huge game changer for Elio Motors. The CAFE credit sales idea is brilliant as it could make Elio Motors profitable even if they only break even on the direct sales of these vehicles. EM is estimating they can sell the credits at about $2,400 per Elio sold. This would give them a great profit margin per vehicle as the business plan from two years ago only lists $1,000 profit per base vehicle. Heck even if Elio Motors only sold 50,000 vehicles a year and made $2,000 from each vehicle from CAFE credit sales this would still bring in $100 million which would be more than enough to keep them in business and generate a profit for investors.

Some may argue that Elio Motors has no chance of getting the CAFE rules changed however I would say they have a very good chance as this change would actually benefit the big auto makers. The large auto manufacturers who wish to buy the CAFE credits from Elio Motors benefit directly from supporting this rule change and I would expect them to use their considerable lobbying clout to help push this through.

When Elio Motors gets the CAFE rules changed, with the assistance of the big automakers wanting to buy those credits, they will have no trouble lining up any needed investment as this will make them more profit than the vehicles themselves.