Elio Motors Engine Unveiling 2/6/2015 -3/6/2015

[John Painter]

OK, then assuming the engine isn't the problem and everything is hunky-dory there, what ELSE might be the source of such odd behavior? Option 1 - they got bad news from ATVM, e.g. either an outright refusal or something material that would cause a serious delay in processing of the loan, putting any funding date too far into the future to make their new dealine for production. Option 2 - they are courting another major investor who wants to do due diligence on their entire porfolio and asked for an embargo on disclosures while that is happening.

One of the reasons this seems particularly odd (again assuming the engine is ok) is that having a completed and functional motor would actually be something material to support the ATVM. Again, the closer they are to production, the better their odds of a successful ATVM outcome as this de-risks this for DoE and underwriters.

I don't even know where one would come up with there's a problem with the engine thing, that's complete fantasy since Elio has said pretty clearly it's due to key stakeholders scheduling conflicts. If one is in the camp that Elio doesn't tell the truth this whole line of thought is moot anyway, so why go there. Certainly not for my edification. The hard reality for any of us into the Elio Motors experience is waiting for some news from Elio, or looking around for some hints from key stakeholders. Sometimes, the reality is just slow and boring, that's why we have Hollywood and Disneyland.

 

[tonyspumoni]

I agree that behavior of this organization and its PR group stands somewhat outside of the mean, but no reasonable organization would have done what EM did (delay a major material announcement) simply because one or more board members were too busy to attend. Either something is going on or the entire PR group needs to be whacked. This is too much bad press for no reason if there isn't some kind of problem. You may all be right (insiders and outsiders alike) and the engine is fine, but it doesn't sniff right.

Bear in mind that this group hasn't exactly had the best track record of meeting their deadlines. In fact, that number is precisely zero. So if they actually have GOOD news and are so completely clueless as to say "we're gonna show on Feb X" and then Feb X rolls around and they said their p**sy hurts and they can't give you the good news and oh-by-the-way we don't when we're actually gonna get around to that but yeah it is real good news (real good), they are genuinely clowns. If nothing else, their unpredictability is certainly keeping this entertaining.

And I'm not buying one cent of whatever BS they are selling anyone through casual leaks. I mean no disrespect to those (even here) who are the recipients of such leaks, only that such leaks are no substitute for true and open disclosures. I believe what I read in press releases. Everything else is coffee-machine talk.

 

[BaldGuy]

I will agree with you with EM not doing so well with deadlines, but the job hiring deadline is one they are forced to meet or got to pay so much for each job not created and i would guess lose the plant lease. Even that one he got lucky and got an extension, but the new deadline is still there and I doubt they will forgot the whole thing. As far as I know, this was the only deadline that he made that had a penalty if he didn't meet it.

In some ways, I'm glad he accepted this hard deadline. In others, if he can't meet it or get more extensions, could mean the end of the dream. The next 15 months will be interesting.

 

[tonyspumoni]

Let's put this in another context. Let's say I am a venture capitalist with $250M to spend. I scan the horizon for the most excellent opportunities - usually those with the best risk-reward potential - and lo' I see Elio Motors. I have my people look at it first from a material perspective and I see a lot of promise, a serious design effort, an interesting grass-roots marketing plan (nice), a path to production, and capital starvation leading to delay after delay after delay. I then look PR and I see them lurch between leaking like a seive and outright buffoonery (danger). I also encounter a rigid founder (84 mpg, $6800) and see no flexibility testing the market on either metric, particulary on the cost side. If Paul says they'll make $500 a pop selling at $6800 I would, as a sane investor, ask the entirely rational question of whether the market would buy them at $7300 a pop, doubling my margins.

So the delay in unveiling the motor and sticking to promises probably also impacts the perception of stability you would want to convey to potential partners too.

 

[JEBar]

I will agree with you with EM not doing so well with deadlines, but the job hiring deadline is one they are forced to meet or got to pay so much for each job not created and i would guess lose the plant lease. Even that one he got lucky and got an extension, but the new deadline is still there and I doubt they will forgot the whole thing. As far as I know, this was the only deadline that he made that had a penalty if he didn't meet it.

In some ways, I'm glad he accepted this hard deadline. In others, if he can't meet it or get more extensions, could mean the end of the dream. The next 15 months will be interesting.

due to very visible necessities like setting up that assembly line, hiring/training workers and such, it won't take waiting 15 months to determine how things are going

 

[John Painter]

As far as I know, this was the only deadline that he made that had a penalty if he didn't meet it.

Why do you say that?

It's more likely Elio Motors has had a number of deadlines with clear benefits and penalties if certain objectives are met/not met. To make an analogy, this is virtually how all of health care financing in the US operates. Public funding such as through Medicaid is something the public can find out about (albeit sometimes the process to do so is cumbersome), private funding is, well, private and very likely to not be public knowledge. This is my experience in health care anyway.

I find it peculiar that there's so much assumption private (non governmental) financing, especially of large amounts of capital, would be a matter of public knowledge, and would be invested without considerable strings attached.

 

[tonyspumoni]

John,

You are quite right regarding the rather erroneous assumption on the part of many that details of private capital infusions would become public knowledge. As long as Elio is a privately held company and they adhere to U.S. banking and tax laws, they need not divulge the nature of ANY of their financial dealings not otherwise obligated by contract or law.

Typically private capital infusions are at least acknowledged through a press release, even if the source is kept secret. Oftentimes this happens again through shell organizations of some kind, VC firms, hedgefunds, etc. There is benefit in doing so for both parties - Elio Motors wins because capital infusions validate their business model leading to lower risk terms for even more capital and the provider wins because it may lead other providers to invest, increasing the odds their own stake can be made good.

 

[Rickb]

its easy to sit back and guess .... I tend to try and stay away from doing so, I'd rather deal with facts than guesses .... they say the delay was called by IAV due to an emergency they had to deal with for one of their major customers .... I stopped worrying about it after that

I didn't believe that as fact, but then again I'm not worried about the engine start delay, but worry only about the funding shortfall that caused the latest production start delay. The engine start delay and no reschedule is just puzzling. Plenty of time to worry about the engine if it hasn't formally started by the time funding is secured and the first prototype rolls out the shop.

 

[tonyspumoni]

I'll put it this way. If this little PR debacle is just a simple PR problem, the engine really is just fine, some stakeholders just really didn't have time for this, then Elio Motors would do well to issue a statement saying something like this: "Elio Motors would like to express their gratitude to so-and-so for their wonderful orchestration of our marketing and public relations efforts to date. As Elio Motors matures and gets closer to genuine production, our marketing and PR efforts need to keep pace with our growth. Elio Motors therefore announces the following leadership changes. Effective immediately, Hewey, Dewey, and Lewey [famouse PR house] will be managing these efforts."

In other words, you chuck the present bunch under the bus. The new bunch comes in a matures it up a level, making 100% sure that when they say something will happen it does happen, they manage messages properly, and that when they talk, they actually have something to say. And this business of their employees yammering to people who post to forums would stop dead. No loose cannons of any kind. That's how it is done professionally.

 

[Truett Collins]

I agree that behavior of this organization and its PR group stands somewhat outside of the mean, but no reasonable organization would have done what EM did (delay a major material announcement) simply because one or more board members were too busy to attend. Either something is going on or the entire PR group needs to be whacked. This is too much bad press for no reason if there isn't some kind of problem. You may all be right (insiders and outsiders alike) and the engine is fine, but it doesn't sniff right.

Bear in mind that this group hasn't exactly had the best track record of meeting their deadlines. In fact, that number is precisely zero. So if they actually have GOOD news and are so completely clueless as to say "we're gonna show on Feb X" and then Feb X rolls around and they said their p**sy hurts and they can't give you the good news and oh-by-the-way we don't when we're actually gonna get around to that but yeah it is real good news (real good), they are genuinely clowns. If nothing else, their unpredictability is certainly keeping this entertaining.

And I'm not buying one cent of whatever BS they are selling anyone through casual leaks. I mean no disrespect to those (even here) who are the recipients of such leaks, only that such leaks are no substitute for true and open disclosures. I believe what I read in press releases. Everything else is coffee-machine talk.

Until you see and post the signed contracts/agreements with all the board members/suppliers/supporters/investors you are simply blowing smoke here...