Financing Elio Motors Development And Production

[Avards]

"He (Mr.Elio) also goes on in the article to explain that Elio Motors can not start the next round of funding until the $7.5 million from IRG is in hand which likely matches up with what Kuda has mentioned in the preceding post about a 'private placement' and answers the question about how they will get more money."


http://us6.campaign-archive1.com/?u=24b371802c83d81776b06aa68&id=0d2e95dfd4

http://www.shreveporttimes.com/article/20140519/NEWS0503/305190007/Elio-production-delayed-mid-2015

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I just thought that some might appreciate a definition of "Private Placement". This is copied from Ivestopedia.

wr

Private Placement

Definition of 'Private Placement'
The sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market.
Investopedia explains 'Private Placement'
Since a private placement is offered to a few, select individuals, the placement does not have to be registered with the Securities and Exchange Commission. In many cases, detailed financial information is not disclosed and a the need for a prospectus is waived. Finally, since the placements are private rather than public, the average investor is only made aware of the placement after it has occurred.

 

[JP]

As much as I like the Elio, $7000 is a lot of money for anybody, so I personally wouldn't put that down, even if it were refundable. The finalized production model hasn't rolled off the assembly line yet so I'd rather keep my 7 grand for an emergency, or another car if I can no longer wait for the Elio. Just being realistic. While I like the Elio, it is not the only option for a vehicle I am considering buying

 

[whattheelf]

I love the idea of the Elio, the design is really well refined for what it is, its the kind of thing as a kid I would dream to own someday. The problem is 200 million only gets you to your side of the 20 yard line, and in no way could such complicated initiative be achieved through crowd funding. Any startup vehicle company has to be extremely well capitalized, as there are significant upfront supply chain and operations costs involved, to the tune of nearly 1B, in order to reach an economies of scale formula that could price a vehicle for just $7K. The fly in the ointment here is that to justify the infrastructure/investment, there has to be significant and continued demand, and a bonafide level of confidence on return on investment, neither of which Elio will be able to acquire initially, let alone ongoing and growing, the vehicle is in too much of a niche, and that niche overlaps considerably with other low cost transportation alternatives, ie: motorcycles and other micro cars, and those coming shortly. As a very experienced engineer and industrial designer, within world class volume manufacturing of well known consumer products, after my assessment of their business model and with scant details on their fulfillment process, I have nearly zero confidence this company has legs beyond maybe producing a maximum of 1000 units before reaching an unsustainable cash burn due to exhausted cash flow. Now, that first lot will cost them 2-3X more than the selling price since the factory is significantly incapable of automating itself in time to see any profit whatsoever. So what we have here is a product, that we all love the idea of, that however will eventually crash and burn. Big car companies could bring a vehicle like this to market fairly readily, but they however are in the position of writing off hundreds of millions of dollars of loss, something a small startup company simply cannot do. As its a childhood dream to see something like this happen, maybe someone with the same dream, but with say 700M+ of available funds, may just swoop in at some point to help make it happen, but even then, this vehicle will never see significant sustainable demand, unfortunately. Money is far better spent on the many variants of electric vehicles that will be out in the next few years while the Elio struggles to squeak out the door, and those electrics will have a place to bring it to for service, whereas with the Elio, you will need to be fully capable of doing your own work.

 

[Craig]

I love the idea of the Elio, the design is really well refined for what it is, its the kind of thing as a kid I would dream to own someday. The problem is 200 million only gets you to your side of the 20 yard line, and in no way could such complicated initiative be achieved through crowd funding. Any startup vehicle company has to be extremely well capitalized, as there are significant upfront supply chain and operations costs involved, to the tune of nearly 1B, in order to reach an economies of scale formula that could price a vehicle for just $7K. The fly in the ointment here is that to justify the infrastructure/investment, there has to be significant and continued demand, and a bonafide level of confidence on return on investment, neither of which Elio will be able to acquire initially, let alone ongoing and growing, the vehicle is in too much of a niche, and that niche overlaps considerably with other low cost transportation alternatives, ie: motorcycles and other micro cars, and those coming shortly. As a very experienced engineer and industrial designer, within world class volume manufacturing of well known consumer products, after my assessment of their business model and with scant details on their fulfillment process, I have nearly zero confidence this company has legs beyond maybe producing a maximum of 1000 units before reaching an unsustainable cash burn due to exhausted cash flow. Now, that first lot will cost them 2-3X more than the selling price since the factory is significantly incapable of automating itself in time to see any profit whatsoever. So what we have here is a product, that we all love the idea of, that however will eventually crash and burn. Big car companies could bring a vehicle like this to market fairly readily, but they however are in the position of writing off hundreds of millions of dollars of loss, something a small startup company simply cannot do. As its a childhood dream to see something like this happen, maybe someone with the same dream, but with say 700M+ of available funds, may just swoop in at some point to help make it happen, but even then, this vehicle will never see significant sustainable demand, unfortunately. Money is far better spent on the many variants of electric vehicles that will be out in the next few years while the Elio struggles to squeak out the door, and those electrics will have a place to bring it to for service, whereas with the Elio, you will need to be fully capable of doing your own work.

Welcome to the forum. Too bad it had to be a negative one. All are welcome, please don't push it.

 

[whattheelf]

Its more a realistic persective on Elio, for a reason. I want an Elio, I really do, I want to believe, but because my background and experience, being a part of more than few successful and unsuccessful startups, means its not possible to believe, just hope, even it thats unrealistic. The reason I posted what I did is to help prevent people from getting burned on deposits, and that includes the so-called refundable deposits, because few people understand what happens to your money once a company is no more. Elio is also not going to fail because of not having enough deposits, they are a fraction of a fraction of what this company needs to get off the ground. I do not want to see people earning hard earned cash get taken thats all. If the car comes out, and you can go down and get one there and then, then go buy one like I will, but do yourself a favor and do not send in any money until this vehicle is reaches mass production release, and you can physically go and get one. Thats the safe and honest way to approach this product. Keep the faith, but keep your money.

 

[Dustoff]

 

[Craig]

Its more a realistic persective on Elio, for a reason. I want an Elio, I really do, I want to believe, but because my background and experience, being a part of more than few successful and unsuccessful startups, means its not possible to believe, just hope, even it thats unrealistic. The reason I posted what I did is to help prevent people from getting burned on deposits, and that includes the so-called refundable deposits, because few people understand what happens to your money once a company is no more. Elio is also not going to fail because of not having enough deposits, they are a fraction of a fraction of what this company needs to get off the ground. I do not want to see people earning hard earned cash get taken thats all. If the car comes out, and you can go down and get one there and then, then go buy one like I will, but do yourself a favor and do not send in any money until this vehicle is reaches mass production release, and you can physically go and get one. Thats the safe and honest way to approach this product. Keep the faith, but keep your money.

Thank's for your concern, but trust us, we have heard it all and we are all over 21.
Some of us a little farther then we care to be.

 

[whattheelf]

Ok great, the Elio is one powerful elixir, so glad to know people are as fully informed as possible before plunking down any cash!

 

[jetpack54]

I love the idea of the Elio, the design is really well refined for what it is, its the kind of thing as a kid I would dream to own someday. The problem is 200 million only gets you to your side of the 20 yard line, and in no way could such complicated initiative be achieved through crowd funding. Any startup vehicle company has to be extremely well capitalized, as there are significant upfront supply chain and operations costs involved, to the tune of nearly 1B, in order to reach an economies of scale formula that could price a vehicle for just $7K. The fly in the ointment here is that to justify the infrastructure/investment, there has to be significant and continued demand, and a bonafide level of confidence on return on investment, neither of which Elio will be able to acquire initially, let alone ongoing and growing, the vehicle is in too much of a niche, and that niche overlaps considerably with other low cost transportation alternatives, ie: motorcycles and other micro cars, and those coming shortly. As a very experienced engineer and industrial designer, within world class volume manufacturing of well known consumer products, after my assessment of their business model and with scant details on their fulfillment process, I have nearly zero confidence this company has legs beyond maybe producing a maximum of 1000 units before reaching an unsustainable cash burn due to exhausted cash flow. Now, that first lot will cost them 2-3X more than the selling price since the factory is significantly incapable of automating itself in time to see any profit whatsoever. So what we have here is a product, that we all love the idea of, that however will eventually crash and burn. Big car companies could bring a vehicle like this to market fairly readily, but they however are in the position of writing off hundreds of millions of dollars of loss, something a small startup company simply cannot do. As its a childhood dream to see something like this happen, maybe someone with the same dream, but with say 700M+ of available funds, may just swoop in at some point to help make it happen, but even then, this vehicle will never see significant sustainable demand, unfortunately. Money is far better spent on the many variants of electric vehicles that will be out in the next few years while the Elio struggles to squeak out the door, and those electrics will have a place to bring it to for service, whereas with the Elio, you will need to be fully capable of doing your own work.

It's a fair statement since we're the only ones talking and EM remained silent with their funding to bring this ELIO to full production. With that said, not even you with your expertise can predict if the buying public will embrace this car or not so for you to say that "this vehicle will never see significant sustainable demand" makes me think that you're one of the electric car fanatics that only see electric car as the future of transportation! Also, EM partnered with Pep Boys just in case you missed this little detail to service ELIOS. And EM can easily partner with other car service providers to reach those owners that's not close to Pep Boys. Nothing's wrong with electric if you're willing to shell out $3-4,000 for a fresh battery plus installation every 5 or so years that is if you're willing to keep it longer. Another thing with electric cars is, it's not easy to sell USED because potential buyers are more informed now that they will have to replace the battery - they would rather buy a decent used gas engine car worth the price of the battery. So you see, ELIO has a place in the automotive future, you just don't know it yet! Funding is the big kahuna of a problem here but there's definitely money to be made here. Paul Elio could easily give more control and a percentage of ownership to a big investor whether foreign or not just to get it realized, it'll still be American made if it's made here. Just my 1 cent!

 

[KenK]

I think most of us have already had our own little memorial for our deposits. It's all we can do and we hope for the best.