Financing Elio Motors Development And Production

[lnwlf40]

PROGRESS!!!!!!
Elio Motors takes major step toward producing new vehicle
at massive Shreveport plant

Troy, Mich., (Sept. 17, 2014) – Elio Motors, Inc., announced today that it will work with its manufacturing partner, Comau, to sell surplus manufacturing equipment from the former GM manufacturing facility in Shreveport, Louisiana, where the company will begin production of its enclosed, three-wheeled vehicle in 2015. The strategy allows Elio Motors to reuse the machinery it needs to manufacture its high-mileage vehicle, raise funds that will go toward production and recycle valuable machinery it does not need.

Elio Motors announced in January 2013 that it had purchased all of the existing equipment in the facility. One of the most important steps in Elio Motors’ overall manufacturing strategy was to determine which of the equipment would be required to manufacture the vehicle in the most efficient and cost-effective manner. The company has completed that assessment and is taking the unusual step of selling the surplus equipment.

“One of the keys to producing a low-cost vehicle is ensuring maximum efficiency in our manufacturing operations,” said Paul Elio, CEO of Elio Motors. “Our team recently cleared an important first step by determining what existing equipment in Shreveport is mission-critical and what equipment can be sold. This level of detailed planning and execution is putting the processes in place to make Elio Motors a world-class manufacturer.”

Comau plans to contract approximately 30 people to assist in the disposition of surplus assets and has enthusiastically agreed to give preference to local contracting firms where possible.

The announcement comes as Elio Motors is building momentum toward production. More than 34,000 people have made reservations for the innovative vehicle, which will have an anticipated fuel efficiency of 84 MPG and price tag of $6,800.

“Building a motor vehicle company from the ground up is a monumental feat,” said Jim Holden, Elio Motors board member and former Chief Executive Officer of DaimlerChrysler. “Elio’s partnership with Comau to effectively reutilize equipment from the Shreveport facility and leverage the surplus machinery reinforces Elio Motors’ theme of innovation. This is further proof that Elio Motors is going to make transportation history in 2015 when it begins production.”

Elio Motors will create more than 1,500 jobs in Shreveport, La., where the company will rent approximately 1.5 million square feet of a 4.1 million-square-foot building. In addition to job creation, the Elio Motors project will help reduce the country’s dependence on foreign oil and provide a more environmentally friendly transportation solution for American drivers.

The vehicle prototype is currently on a nationwide tour, introducing the vehicle to potential customers.

About Elio Motors
Founded by car enthusiast Paul Elio in 2008, Elio Motors Inc. represents a revolutionary approach to manufacturing an ultra-high-mileage vehicle. The three-wheeled Elio is engineered to attain a highway mileage rating of 84 mpg while providing the comfort of amenities such as power windows, power door lock and air conditioning, accompanied by the safety of multiple air bags and an aerodynamic, enclosed vehicle body. Elio’s first manufacturing site will be in Shreveport, La., with plans for the first production vehicle to roll off the assembly line in 2015 and significant production, sales and distribution during the next two years. For more information, visit www.eliomotors.com or www.facebook.com/ElioMotors.

About Comau
Comau is a worldwide leader in manufacturing flexible, automatic systems and integrating products, processes and services that increase efficiency while lowering overall costs. Headquartered in Turin, Italy, with an international network that spans 15 countries, Comau uses the latest technology and processes to deliver advanced turnkey systems that consistently exceed the expectations of its customers. Comau specializes in body manufacturing solutions, powertrain machining & assembly, robotics and maintenance as well as environmental services for a wide range of industrial sectors. The continuous expansion and improvement of its product range enables Comau to guarantee customized assistance at all phases of a project; from design, implementation and installation, to production start-up and maintenance services.

For further information about Comau’s consolidated experience and its vast portfolio of products and services, visit www.comau.com.

 

[goofyone]

I know I posted this in another thread however I felt this information should be in thread as well:

I just took the time to look into this and the 'financially viable' part of the ATVM program is really quite interesting. The law was different from what I had expected and it would appear that the 'financial violability' standard is not what many of us had assumed it was.

3) APPLICANT FINANCIAL ELIGIBILITY [10 CFR 611.100(A)(2)]:

In order to be financially eligible under the ATVMLP, the applicant “must be financially viable without the
receipt of additional federal funding for the proposed project”.

a) “Financially Viable”: The applicant will be deemed “financially viable” for purposes of 10 CFR
611.100(a)(2) if (i) there is a reasonable prospect that the applicant will be able to pay principal and
interest as and when due under the ATVM loan and (ii) the applicant has a net present value that is
positive, taking all costs, existing and future, into account. (See definition of “financially viable” in 10
CFR 611.2.) 10 CFR 611.100(c) sets forth a non-exhaustive list of the factors considered by the
ATVMLP in determining whether the applicant is financially viable.

b) “Additional Federal Funding”: 10 CFR 611.100(d) lists forms of direct and indirect assistance from the
federal government which would be considered “additional federal funding” for purposes of 10 CFR
611.100(a)(2).

http://energy.gov/sites/prod/files/...r-Applicants-Final-Version-October-5-2012.pdf

§ 611.2 Definitions.
Financially viable means a reasonable prospect that the Applicant will be able to make payments of principal and interest on the loan as and when such payments become due under the terms of the loan documents, and that the applicant has a net present value that is positive, taking all costs, existing and future, into account.

http://www.law.cornell.edu/cfr/text/10/611.2

§ 611.100 Eligible applicant.
(a)In order to be eligible to receive a loan under this part, an applicant
(2) Must be financially viable without receipt of additional Federal funding associated with the proposed eligible project.
(c) In determining under paragraph (a)(2) of this section whether an applicant is financially viable, the Department will consider a number of factors, including, but not limited to:
(1) The applicant's debt-to-equity ratio as of the date of the loan application;
(2) The applicant's earnings before interest, taxes, depreciation, and amortization (EBITDA) for the applicant's most recent fiscal year prior to the date of the loan application;
(3) The applicant's debt to EBITDA ratio as of the date of the loan application;
(4) The applicant's interest coverage ratio (calculated as EBITDA divided by interest expenses) for the applicant's most recent fiscal year prior to the date of the loan application;
(5) The applicant's fixed charge coverage ratio (calculated as EBITDA plus fixed charges divided by fixed charges plus interest expenses) for the applicant's most recent fiscal year prior to the date of the loan application;
(6) The applicant's liquidity as of the date of the loan application;
(7) Statements from applicant's lenders that the applicant is current with all payments due under loans made by those lenders at the time of the loan application; and
(8) Financial projections demonstrating the applicant's solvency through the period of time that the loan is outstanding.
(d). For purposes of making a determination under paragraph (a)(2) of this section, additional Federal funding includes any loan, grant, guarantee, insurance, payment, rebate, subsidy, credit, tax benefit, or any other form of direct or indirect assistance from the Federal government, or any agency or instrumentality thereof, other than the proceeds of a loan approved under this Part, that is, or is expected to be made available with respect to, the project for which the loan is sought under this Part.

http://www.law.cornell.edu/cfr/text/10/611.100

To me these are most important parts of all that legalize are:

“Financially Viable”: The applicant will be deemed “financially viable” for purposes of 10 CFR611.100(a)(2) if
(i) there is a reasonable prospect that the applicant will be able to pay principal and interest as and when due under the ATVM loan
and
(ii) the applicant has a net present value that is positive, taking all costs, existing and future, into account.

(8) Financial projections demonstrating the applicant's solvency through the period of time that the loan is outstanding.

So it appears that when the law says that the applicant “must be financially viable without the receipt of additional federal funding for the proposed project” what this means is not that Elio Motors needs to be viable without the funds but instead that Elio Motors needs to show that they are viable whether the funds come from the ATVM loan program or another funding source.

 

[JEBar]

So it appears that when the law says that the applicant “must be financially viable without the receipt of additional federal funding for the proposed project”

I suspect that the heavy, heavy pounding that the current administration has taken over loaning money for such projects as Solyndra ==> http://en.wikipedia.org/wiki/Solyndra <== has probably been the reason for such wording

Jim

 

[goofyone]

I suspect that the heavy, heavy pounding that the current administration has taken over loaning money for such projects as Solyndra ==> http://en.wikipedia.org/wiki/Solyndra <== has probably been the reason for such wording

Jim

Actually as far as I can tell that wording predates all the issues as it is original to the Energy Independence and Security Act of 2007 which created the ATVM loan program and was signed into law by the previous adminstration in December 2007.

Solyndra was not funded by this program, not automotive, however that of course does not mean that even with such wording the ATVM loan program has also not had issues. The big failure in this program has been Fisker.

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

 

[JEBar]

Actually as far as I can tell that wording predates all the issues as it is original to the Energy Independence and Security Act of 2007 which created the ATVM loan program and was signed into law by the previous adminstration in December 2007.

apparently the current administration wasn't paying much attention to the wording about the company being financially solid ... .... I can't say that would come as much of a surprise

Jim

 

[goofyone]

apparently the current administration wasn't paying much attention to the wording about the company being financially solid ... .... I can't say that would come as much of a surprise

Jim

I would be surprised if any administration pays attention to wording when there is a chance to give out money. [emoji4]

 

[JEBar]

I would be surprised if any administration pays attention to wording when there is a chance to give out money. [emoji4]

unless it will cost them votes, point taken ..

Jim

 

[zelio]

When can we expect news on the Gov. loan/grant Elio applied for last month?


Moderator Comment: Merged into existing discussion thread

When EM hears and then decides it is appropriate to share. It is fairly safe to say we won't hear this month or next. It may even be possible to say we won't hear until early next year. Or not at all although I doubt that will happen. :-) Z

 

[zelio]

So cryptic - I'm picturing you rummaging through Paul's trash with a flashlight and notepad.

That is such a funny picture! Z

 

[Anion]

Just thinking about helping Paul and all of us reach our dream!

What if the "All-In" believers (at least the 10,000 now) signed up, dedicated $100 per month each and every month toward an Elio Owners Loan Fund, until their Elio is built... Paul would have an operating fund of
$1,000,000 per month guaranteed. Surely this would enable him to start production and get what operating capital he needs to start the plant now!

The contributors would continue until their Elio is built, pay the balance owed minus their contributions, and have their Elio delivered. New fund members would come in as they place their "All-In" order and the fund would continue to grow with each new order. Monthly operating costs could easily be covered by the infusion of thousands of new orders.The monthly contributions are guaranteed by the fulfillment of each Elio order.

As an "All-In" believer, I would gladly pay a monthly payment which lowers my final cost, plus helps get the ball rolling for Paul. EM could handle the Loan Fund as an "Easy Pay Plan".

Well this is just a thought and needs much refinement, but it would get the production end started and let all of us breath a lot easier!