Does The Elio *have* To Sell In High Volume To Succeed?

[Sethodine]

Guess you've never lived on a farm or ranch.
Never bailed hay or alfalfa.
Never harvested crops.
Never done construction.
How does the plumber get his equipment to a job site?
How about the builder?

I've helped buck hay bales when I was a teenager, but besides that you are correct. However, a lot of what you are talking about could actually benefit from being an electric vehicle. There's no reason a hay baler can't be entirely electric.

The only real problem with moving equipment in an electric vehicle is that nobody has attempted to bring an electric Truck or Van to market yet. Even today's batteries would be capable of moving, say, a Plumber's van loaded up with tools and pipe on racks, around town for a day. The battery doesn't really drain while sitting in traffic, so especially in stop-and-go, around-town applications they benefit.
VW has a multi-application EV platform ("Phaeton") that will start going into EVs around 2019--they expect 350 miles of range for some applications, so 200 miles out of a work truck platform would not be beyond reason or reach.

The hardest part about EV adoption is not the technology anymore. It is the culture that has been trained so well to pump gas, that they can't imagine a world without it.

 

[WilliamH]

I've helped buck hay bales when I was a teenager, but besides that you are correct. However, a lot of what you are talking about could actually benefit from being an electric vehicle. There's no reason a hay baler can't be entirely electric.

The only real problem with moving equipment in an electric vehicle is that nobody has attempted to bring an electric Truck or Van to market yet. Even today's batteries would be capable of moving, say, a Plumber's van loaded up with tools and pipe on racks, around town for a day. The battery doesn't really drain while sitting in traffic, so especially in stop-and-go, around-town applications they benefit.
VW has a multi-application EV platform ("Phaeton") that will start going into EVs around 2019--they expect 350 miles of range for some applications, so 200 miles out of a work truck platform would not be beyond reason or reach.

The hardest part about EV adoption is not the technology anymore. It is the culture that has been trained so well to pump gas, that they can't imagine a world without it.

Not trying to pick on you, but you words ..."Even today's batteries would be capable of moving, say, a Plumber's van loaded up with tools and pipe on racks, around town for a day."...
"Around town" is the key.
Not clear how the plumber is going get his rig out to pull someones pump from a 300 or 400 ft deep well. And I don't think it will do too well when I have to haul 3 or 4 tons of bulk feed and load up the broadcast feeders.
As I've said before, if I lived around town I might get one, but towns aren't the only places that people live.
And a lot the places where people use a lot of heavy equipment aren't in town either.

 

[Maurtis]

I am confused. Is your point about range or power? There are already electric heavy construction vehicles (cranes, ore haulers, etc) but looks like most are hybrids for power generation or use heavy cables. So the electric motors are capable of the work, we just need to get better at batteries for an all electric mobile solution.

 

[AriLea]

Hey guys, if you are going to debate the EV question, how about moving to a new thread, where I'll be happy to participate in the 'food-fight' . The debate has very entrenched battle cries and gets pretty old very fast when off topic.

 

[Sethodine]

Hey guys, if you are going to debate the EV question, how about moving to a new thread, where I'll be happy to participate in the 'food-fight' . The debate has very entrenched battle cries and gets pretty old very fast when off topic.

Yes. Thank you, Ari.

I think the topic of this thread (Elio production needs) has pretty much exhausted itself. I'm sure it will come up again as more people join the board during the ramp up to production, so perhaps we shouldn't lock it, but we can just let it die for now. Some newcomer with surely come by to perform some thread necromancy in the future, and we can pick up the discussion from there

 

[Ty]

I've often wondered what the lower-end threshold of selling the Elio is. Obviously, it is somewhere South of 250,000 per year as that is their optimum sales figure for now. Would sales of 50,000/year be enough to continue production? I don't think so but it's possible. If 250,000 is the optimal production for a line staffed by auto workers, 250,000/year would double your personnel per vehicle costs. You can't get rid of people on a single shift line and continue production very easily. Sure, if the line is moving slow enough, you could man every other station and have every person doing two of jobs but that isn't very realistic. If we knew that Elio was making $1,000 per vehicle and if we knew how much of their cost was for personnel, we could figure out where those costs intersect and know where Elio would go from being profitable to unprofitable.

Elio obviously doesn't want headlines like this:
http://www.greencarreports.com/news/1087568_tiny-smart-cars-lose-5-billion-for-mercedes-benz-report

 

[3wheelin]

I am confused. Is your point about range or power? There are already electric heavy construction vehicles (cranes, ore haulers, etc) but looks like most are hybrids for power generation or use heavy cables. So the electric motors are capable of the work, we just need to get better at batteries for an all electric mobile solution.

You have to forgive him, he's old school! He also failed to read Seth's comment "I see a future"....and got all defensive right away that his ICE toys will be taken away from him!

 

[NorCalPhil]

Thanks Chris... A large gathering of Elio owners ends in bloodshed as long-debated topics on the online forum ElioOwners.com unravel the event.

"I would have thought that once we all got our Elios, we would get together all around the country and have a good time." said one of the owners who wished to remain anonymous. "20 years of waiting for this vehicle created a ridiculous backlog of hate, animosity and general bad will towards our fellow enthusiast. In hindsight, the battle royal should have been expected, but nobody expected the electrical fires from the numerous custom dash swaps."

Things got a little peppy around here today. Looks like BMW drivers have a new challenger to their title of biggest jerks on the road. This is Tread Lightly reporting live from downtown at the Pep Boys parking lot. Back to you.

 

[AriLea]

I've often wondered what the lower-end threshold of selling the Elio is. Obviously, it is somewhere South of 250,000 per year as that is their optimum sales figure for now. . . . .

A few years back, when the $6800 price point was already established, Paul was telling the media that he was very confident they could sell and produce 68,000 per year. I think that's likely above the lowest required volume.

Now that he's expecting more buyers than that, maybe the tooling or other methods have been up-scaled, and to support that technology maybe more are needed. In any case, I'm pretty sure 100k is more than adequate, since the major automakers make profits from lines that sell less than that with similar technology.

Up to now EM has established that there are more people willing to buy than the reservations indicate. But is the on-going yearly level they get, after the balloon of initial sales, going to be enough?

Generally, the replacement rate of cars is fully visible at 10years. That is when 90+% of privately purchased vehicles are now used, and those owners have gotten a replacement. Some replace with other car types(some in some out), and some get the same category, but generally at 10years sales rates are leveled out, no initial novelty purchasing left. Even so the first 5years are the focus of worry. If you can sell five, you'll sell at ten, if you keep the product technology and packaging advancing.

Given that the 55k reservationist are not exactly like normal buyers will be, what can we establish about normal buyers? We do know in the first year there will be a lot more than the reservationists. At least as many as the current volume reserved. Some few indications hint at 10x as many interested immediately after production starts. So 5x is not unreasonable, even if a bit unproven. However, EM confidence about sales allowed them to raise their estimate to 240k/first year. I think they have confidential data to back that up, and they have hinted to that effect too.

About to the year2+ sales, all I can say for sure is, if all year1's are sold as reservations (even if reserved just a few weeks before delivery), then year two will fully sell as well, even if by then many are purchased out-side the reservation process. Year 2,3,4 is where things get more suspect.

Best guess is, year-3-plus does not become scary to EM so long as that 68,000 rate is reached each year. If 240k are sold in year one and only 120k in year two, 68k looks pretty confident for later years 3 and up. And what rate do they need when their tooling is already paid for?

But quite possibly, 240k will sell year one, and capacity will be upped for year two, then capacity will likely start to come back down, settling a to some variable rate around year 5. That's the profile that Smart Car hit, but at a lot lower volume. Still those dynamics do translate.

Here's a super good question, Smart Cars sell well under 20k units each year at bottom dollar. Do they still make any profits? IS their technology relative to Elio's?

 

[Maurtis]

Here's a super good question, Smart Cars sell well under 20k units each year at bottom dollar. Do they still make any profits? IS their technology relative to Elio's?

The technology seems pretty similar to the Elio (but the Tridion frame that can support an elephant might be beefier), but the base price of $14,650 is not very bottom. There are other four seat base models with more utility in that same price range. At almost half that base price the Elio is in a market of 1.

I really think that if the Elio does not prove to be a safety nightmare in the real world, the very low purchase price will be the big seller and not the MPG. It is quirky like the Smart, but from what I hear of the people who sit in it that it does not feel tiny like the Smart. The Smart looks and feels tiny, the Elio's length I think helps with the perception. I had a friend drive me to the dealership to buy my Miata in his Smart. He was 300 lbs, I am 220. We could not sit with our backs flat on the seats without our manflesh touching each other. Not a problem in the Elio

The high MPG of the Elio is great, but I think the majority of the sales will be to people drawn in by the very low purchase price.