Financing Elio Motors Development And Production

[Ekh]

Elio could possibly get that if they went public with some truths, So far since they decided on the BS approach they haven't been able to get 5000 people to put up 1000 .

I don't have that much available cash to tie up. Pity. But to your real point, I too sense that Elio is masking difficulties in favor of snowing us with the positives. For example, we've seen Weather Channel and Fox New people taking off for test drives -- but not one word on how they felt about their experience. What's wrong with this picture?

The IAV engine decision bothers the heck out of me … the start-up, proving, and tooling costs for an engine putting out only 55 hp are enormous. There are lots of engine alternatives -- some new, some well-established -- that Elio might have considered. But at a $100 million tooling cost for the block alone, the IAV engine looks like a bad deal to me.

So --how about an explanation of Elio's thinking on this matter? What are the overwhelming advantages of this cast aluminum block / sprayed cylinder liners that make it worth the investment?

If Elio were addressing such questions, it might be possible to get crowd-funding for big ticket "all-in" people. But as it is, while I (and others) remain optimistic about the project and hope for its success, I'd surely be unwilling to kick in $7k based on the skimpy factual (as opposed to BS PR fluff) material on how the development / tooling process is going.

 

[Ekh]

15" tires aren't necessarily a problem, possibly width may cause some handling concerns, potentially skittish at higher speeds. Haven't seen any road test reviews on how it handles, but those third party reports would fairly note any concerns. I do expect that beyond early adopters, there may be too much of adjustment for most people to feel comfortable with, may feel too claustrophobic or leaving many feeling too exposed or feeling too surrounded, that and adjusting to the front wheel outrigger type geometry, this is not like getting into a motorcycle, nor a car.

The Elf that I have on order does not compete with an Elio, and is much more exposed, and does not ride in traffic lanes, as it is mostly a bicycle, a three wheeler with the similar two wheels up front, but its an electric assist pedal recumbent, a niche within a niche, and does not have a full enclosure, no side doors yet. It is however a great grocery getter, to get a little more of a pedal workout added to my cycling routine, and you can actually buy one too, it was a successful kickstarter vehicle which is where I spotted it, and there nearly a half dozen of these to take group rides with here time to time for fun, and its not going to change the world.

During the late 50s thru early 60s mostly,there were many brands of micro-car vehicles introduced, many of them 3 wheelers, like the BMW Isetta , or the tandem setup Messerschmidt, were fairly popular initially, offering a very low price, high mpgs, at the time, but they were not for the masses, even on the much less congested roads of the times. The smaller makers soon disappeared, the larger makers sold a bit longer into very narrow niche markets, and the market masses migrated to larger vehicles, or what was fashionable. Americans are fickle by nature, even the masses want the next great thing all the time, and are not necessarily loyal as they may have been, because of the pace of change today. That said, BMW has been toying with remaking a modern Isetta, this time a 4 wheeler, you can google the fantastic concepts of it, I'd buy one in a heartbeat if they do, and it won't be electric was the initial thought.

The gist of the Jordan Perch comment therefore, really represents the EM conundrum, getting to volume sales, via what dealerships, when, and who is going to fund a buildout of those dealerships, plus in dealer inventory to have on hand to build confidence that convinces the masses the size of who buy the Honda Civic today, to buy an alternative like an Elio instead.

Their survival really doesn't depend on if they can get this first production launch funding, which is mostly to deliver on the reservations, but they need a hockey stick major cash flow in order to support this infrastructure buildout, which requires major volume sales, its a big chicken and egg problem, which is way way before they even hit profitability. So the issue here is how to convince just the first round funders to believe that there are major volume orders, without most dealers in place, etc etc, and if they even believe the masses will be comfortable in, and can adjust to driving and Elio, its a big risk. Most early adopters will buy one out of curiousity, without knowing how it drives first, and like most early adopters, they have dispensable cash to take the chance, just for fun, and early adopters are not the masses.

It was interesting watching Paul Elio on Fox and Friends on April 28, the Elio looked impressive, the TV hosts were impressed with it, and it was good press. But, if you picked up on the dialogue, you can watch it on youtube, Paul wasn't pitching the Elio as an alternative, he was pitching it another vehicle to add to what you already own, so you "keep your SUV", verbatim. Interesting pitch, when you only have 30 seconds to convince people, and what that really does is tell people its a toy fun vehicle, not a replacement for what you currently drive. Was fairly clear Paul is not the pitch man you want on national TV pitching this, they need someone telling people, this is the next peoples' car.

So, we shall see where this goes, if even into first production.

I like this analysis. My guess is that this car would sell like hotcakes in China … and there is a rumored buy of 125,000 of them on the shelf. (The rumor coming from a comment from the Elio mfg vp in a taped comment, posted elsewhere -- and wasn't stated as a rumor). But Elio keeps saying "we'll build it here for americans, then consider selling to other countries." Suggests he doesn't actually have orders for 125,000 cars in writing anywhere.

Regarding pitching the Elio as an "also" car, not an "instead of" car, the main reason is carrying capacity. I see the logic of this, but I think it's a mistake. For all the single folks, young couples, and long-distance commuters, the Elio could be THE car, and rent a van when you need one. In my own case, I will have my gas-thirsty Forester paid for in November, and will keep it for hauling stuff. But routine driving will be the Elio -- if it ever goes into production. I drive a lot, mostly alone, and REALLY hate 22 mpg!

I think the project is too far along to just vanish. But I also think it's facing difficulties that need to be publicly addressed.

 

[outsydthebox]

History is filled with success stories. Tho,I am sure the list of failures is many times longer. So many times, the only difference between success and failure, has been perseverance. Thomas Edison did not invent the light bulb. It was an idea that "others" started, but it was Edison who "persevered". It took years, and hundreds of "prototypes" before a "practical" version was realized. Do you remember the "household cleaner" named FORMULA 409? How did it get it's name?...It was 409 attempts (or prototypes), to reach the final formula. The telephone is a good example of persistence :

http://en.wikipedia.org/wiki/Timeline_of_the_telephone

Alexander Graham Bell did not invent the telephone. Notice too, that he was close to bankruptcy, a few years in to it. He also was not a "great man" or a "god". But he, like MANY others, is admired for NOT GIVING UP. Maybe that is what defines greatness.

Paul Elio did not invent the "reverse trike". The "Morgan Motor Company" has been in producing them since 1910. It is however, my hope that EM will persevere.

They say "Genius is 5% inspiration and 95% perspiration"

 

[CheeseheadEarl]

sorry, I missed that. ignore is a many splendored thing.

Unfortunately, I use Tapatalk on my phone, and it doesn't ignore. I have him set to ignore on my computer but still see every post when mobile.

 

[Rickb]

I like this analysis. My guess is that this car would sell like hotcakes in China … and there is a rumored buy of 125,000 of them on the shelf. (The rumor coming from a comment from the Elio mfg vp in a taped comment, posted elsewhere -- and wasn't stated as a rumor). But Elio keeps saying "we'll build it here for americans, then consider selling to other countries." Suggests he doesn't actually have orders for 125,000 cars in writing anywhere.

Regarding pitching the Elio as an "also" car, not an "instead of" car, the main reason is carrying capacity. I see the logic of this, but I think it's a mistake. For all the single folks, young couples, and long-distance commuters, the Elio could be THE car, and rent a van when you need one. In my own case, I will have my gas-thirsty Forester paid for in November, and will keep it for hauling stuff. But routine driving will be the Elio -- if it ever goes into production. I drive a lot, mostly alone, and REALLY hate 22 mpg!

I think the project is too far along to just vanish. But I also think it's facing difficulties that need to be publicly addressed.

I suspect China will build their own version of the Elio........as they are notorious for copycat manufacturing. Also, Elio is the ideal "also" car for most families as a commuter vehicle. Elio will also be the "instead of" car for many and will meet the daily driving needs of some singles, retirees, and people living on limited incomes. I think they are doing a good job of pitching both. I've heard no real sign of difficulty except from Elio critics.

The company should only publicly report positives and work out any bumps they have along the way privately. The public is already over speculating Elio's every move.

 

[creekstone]

History is filled with success stories. Tho,I am sure the list of failures is many times longer. So many times, the only difference between success and failure, has been perseverance.

Failure is simply the opportunity to begin again, this time more intelligently. - Henry Ford

 

[creekstone]

I think the project is too far along to just vanish. But I also think it's facing difficulties that need to be publicly addressed.

I think the only "difficulty" they are facing is funding. The right amount of money will get them over the hump.

That said, private investments (and the details of the deal) are... well... private.
Don't worry... you'll know if Elio Motors gets the money. They will shout it from the mountain top.

 

[whattheelf]

Most definitely! And EM does not have to match the record sales of other cars like the civics, etc. There's just a huge market for this new type of vehicle! In Europe alone, they will embrace this wholeheartedly! It'll cost the British just 4,249.70 pounds and 5,133. EUR. (I based it on $7,000 price). You also have to realize that there's a lot of those just waiting to trade in their "other car or cars" for a replacement! We currently own a 2003 Civic and my old reliable 1999 Toyota Corolla stick shift- I can trade in one and replace it with an Elio. Why will you use your precious BMW or Mercedes for every day driving when you can buy an Elio for that purpose? Who says you have to "add" another car unless you're a collector. As far as the target market...I think once it's out....it'll appeal to almost everybody....I mean what can I say....it's too cute....it's design is updated and slick.....easy to work on for cheapskate like me that does all of the regular maintenance of our cars from simple oil change to break pad replacements. I let my wife replace the wiper blades so she feels she did something! LOL. It's my honest belief or opinion that it'll be a worldwide hit so EM better be ready to crank it up from the start. I also believe that Investors see this not just for domestic market but like I said for every corner of the world where there is road! Soon after, Em can introduce other power plant from diesel to electric (hybrid or plug in) so everybody's happy!

Correction. EM does have to match at least the volume of Civic sales, if not displace a nice chunk of Civic sales.

To price this vehicle at just 6800, as spec'd out now, made in the USA, mass production volume is not nice to have, its a must.

EM cannot survive otherwise because every one of the Elios just on reserve now, if not twice as many as that, will easily cost them 3+ times more to produce than what they will sell them for, thats the business reality, referred to as; the "cost of goods sold" (COGS).

At the same time they need the funds to both simultaneously dial in and build out the capacity of what will need to be perhaps the most efficient assembly process ever seen, plus a nearly ready to go dealer buildout rate that is like building out the next big restaurant chain. ALL of this just adding further COGS.

This is why without the first 200M+ just to launch, and ALOT more coming in behind that, REGULARLY, nothing ships other than maybe a quarter of the reservations that have the very most skin in the game.

Then you just can't build brand awareness, acceptance, and comfort, with just 5-10K of these vehicles running around back and forth to Pep Boys for recalls, because everything out of the gate this new, has significant problems, most of the market on just about every new car design, waits to purchase a bit until they sense the car maker "has worked all the bugs out of the first production units". Don't kid yourself, the list of "in the field" problems are going to be numerous. Only the Japanese, and maybe the Germans, with a ton of experience, and a rapid ability to change, are good at this game. Some rag tag group of up and comers in Shreveport won't be nearly as nimble.

What I do believe, is that Paul's positioning is actually right, even though he may not be the best pitch man, nor have the time in interviews, as how this vehicle actually has broad appeal, to just about every demographic. He may only get the chance to say on TV its a third vehicle and keep your SUV thing too, but he is hoping likely that enough people will come from every demographic to buy these, because he NEEDs alot of people from different demos to buy this, because he needs VOLUME. There aren't enough soccer moms, or enough cheap ass older Corolla drivers, early adopters, curious funny money rich people, or elderly, themselves to hit volume, he needs alot from every one of those categories.

The question is, does this very next round of private equity, believe the shtick "if EM builds it, they will come" routine. I say no because they do not have the critical mass in terms of market awareness/buy-in now, and funders are not fools. They know if they do see a critical mass demand, the germans and the japanese, IF not the CHINESE, will crush Elio, because they can likely build a better, more reliable small alternative vehicle, and if necessary, if they see major loss of sales of Civics, develop an Elio killer, practically overnite, something you can actually bring to a dealer for service, and not Pep Boys.

Don't kid yourself either that there are markets in Asia and Europe for the Elio, the other makers know how to make very small cars, at even higher MPGs than the Elio, and they have infrastructure, and can write of losses on just one Elio killer for a decade as just one tiny writeoff.

Choose to believe if you will, but there are so many business reasons, and the harsh side of business strategy that doesn't really give the Elio chance barely to get out of the gate, unfortunately. I want an Elio or two, but I know the business model, and more importantly, how big business would react to any small bit of just initial success they are not even likely to get.

 

[Jim H]

Manually, they had a little handle on the side of the seat they was pumped about a dozen times for her.

And that is how it was on the P3 when I saw it last year. It was simple, efficient, and easy to do.

 

[GREGG REID]

i'm all in lets try SHARK TANK" maybe they will help us!