Financing Elio Motors Development And Production

[BADBOY]

I keep hoping that the loan will come through and Elio can get back on track quickly BUT if PE thought there was chance of that happening in say next 90 days, he would not have pushed back the production date. If you disagree please say why as I am looking for reason to be optimistic

 

[Rickb]

I keep hoping that the loan will come through and Elio can get back on track quickly BUT if PE thought there was chance of that happening in say next 90 days, he would not have pushed back the production date. If you disagree please say why as I am looking for reason to be optimistic

I am disappointed in the reason for the delay, but remain optimistic providing Elio has a funding plan in place and is making some progress with the engine testing so things are ready to roll at a faster pace as funding options become available. Seems logical.

 

[goofyone]

I keep hoping that the loan will come through and Elio can get back on track quickly BUT if PE thought there was chance of that happening in say next 90 days, he would not have pushed back the production date. If you disagree please say why as I am looking for reason to be optimistic

The reason for the delay being announced now was the fact that Elio Motors needed an extension from RACER Trust and IRG as the goal of production this year was getting tight and this extension would be contractually required if production were to slip to 2016.

We already knew that even if the development continues on track that the September deadline was not realistically going to happen so the logical goal was towards the end of this year. When EM did not receive the expected equipment sales funding within the time frame they were expecting this made the end of the year goal tighter for them even if they do receive additional funding in the next 90 days. So EM was beginning to bump up against the need for an extension from RACER Trust if they were not going to be in production this year and had to request it which they also had to disclose to Caddo Parish so it was going to become public knowledge.

The good news is that this extension gives EM some breathing room to work on the funding as they now have about a year to complete the vehicle development and likely until about the end of the 1st quarter 2016 to secure the needed production funding. The equipment sales throughout this year, and some additional private funding to make up any gaps, should allow EM to get the vehicle development program back on track relatively quickly. I would be surprised if we do not see full vehicle testing proceeding as early as possible in the second half of this year as to my thinking having pre-production vehicles in live testing is the key to securing production money from the private sector. The private sector will be much more willing to fund EM if there is a fleet of pre-production vehicles undergoing testing, 10's of thousands of reservations waiting to be filled, a secured plant site, and a supply chain all ready to go with the only missing link being the funding needed to produce the vehicle.

 

[Hotscoots]

The entire enterprise is a tricky wicket . Funding can come from a variety of sources but not without downside .
Investors want equity , Securing more pre-orders equates to building cars without real-time profit , large loans can be crippling .
The key to success IMO, will be to secure a loan from a benign , patient source to allow for manageable growth of the company.

 

[goofyone]

The entire enterprise is a tricky wicket . Funding can come from a variety of sources but not without downside .
Investors want equity , Securing more pre-orders equates to building cars without real-time profit , large loans can be crippling .
The key to success IMO, will be to secure a loan from a benign , patient source to allow for manageable growth of the company.

Of course the best way to do this would be with the ATVM loan which is one of the things in the works.

 

[Horn]

Let the firestorm towards me begin.

To keep it simple, it all comes down to funding. IMO, people get carried away with a silent investor or talking about google or apple throwing money at EM. I highly doubt the latter part is going to happen. The first part is more likely.

Now most people keep talking about the ATVM loan as the Holy Grail to get EM producing cars....Well, here is why EM will not receive the loan. All you have to do is look at the requirements.

http://energy.gov/sites/prod/files/2014/05/f16/ATVM-Program-Application-Overview.pdf - ATVM Loan Overview

The link above specifically mentions a few things:

*“Ultra Efficient Vehicles” that achieve at least 75 miles per gallon
- I believe that this means the car has to be a proven 75. I don't doubt that the car itself can hit that, but it has to be proven. IMO EM is far from that. Yes they have an engine, but what about a transmission? Gear ratio? That will be important to MPGs.

*Projects must be “financially viable without the receipt of additional Federal funding associated with the
proposed project”
 ATVM is a loan program, not a grant program. It provides “expansion capital,” not working capital
- EM needs this money for working capital. Not expansion capital. They pretty much need this money to start the company.

* "While all applications will be considered on their own merits, there are several key points which set
apart a strong application. The following are just some of the hallmarks of a strong ATVM application:
• Detailed project narrative and plan with key activities and milestones
• Integrated, dynamic financial model, including cash flow, and a strong NPV for the project
• Three years of consolidated financial statements (audited, if available)
• Significant equity funding at the time of application
• Significant, unencumbered collateral, broken down by asset type
• For suppliers, sale agreement for existing (and/or planned) production strengthens the
creditworthiness of the application
• Control over the proposed project site
• Experienced leadership and senior staff with experience directly related to the proposed project
• Strong operating history of the company, parent, and/or subsidiary"
- EM has little cash flow (in terms of securing a large loan). Also, it will be hard for them to figure out the Net Present Value for the car. The 3 years of financial statements are not strong. Little equity.
- They do hit a few bullet points, but they don't hit many.

There is also more. Before you start to bash, just take a look. Nothing I have said is made up. IMO is based on my experience with Finance and Credit. Basing EM on this loan guideline does not look good.

 

[TexasElio]

Thanks for research!

Those that claim that Elio Motors will qualify for a ATVM loan...have never taken the time to research & understand the qualification guidelines...

For many...reality can be a tough pill to swollen...

Please don't worry about the "firestorm"...the facts speak for themselves...

I have no doubt that "name calling" will be the only response some member will utilized to make their counterpoint argument ...really no big deal if you consider the sources...

 

[Horn]

Thanks for research!

Those that claim that Elio Motors will qualify for a ATVM loan...have never taken the time to research & understand the qualification guidelines...

For many...reality can be a tough pill to swollen...

Please don't worry about the "firestorm"...the facts speak for themselves...

I have no doubt that "name calling" will be the only response some member will utilized to make their counterpoint argument ...really no big deal if you consider the sources...

Well, that was only a 10 minute search. I'm not worried about a firestorm or name calling. There are quite a few people on here who can have a real conversation even when there is a disagreement. (All forums are pretty much this way).

I would like this to open up a real discussion. Some already are in it for the long haul because they already paid. If so, there really isn't much you can do, right?

 

[Gas-Powered Awesome]

Those that claim that Elio Motors will qualify for a ATVM loan...have never taken the time to research & understand the qualification guidelines...

Do either of you think that Elio Motors didn't take the time to research and understand the qualification guidelines?

And isn't the Elio a dead issue for you, TexasElio? You know it won't be built, you have no skin in the game, why are you still here?

 

[Horn]

Do either of you think that Elio Motors didn't take the time to research and understand the qualification guidelines?

Well based on the guidelines either they didn't or the ones who decide the loan bend the rules. Its not like Elio hasn't been off on research...

Anyone can apply for a loan. Doesn't mean you meet the criteria.