Financing Elio Motors Development And Production

[ecdriver711]

You must live in New Mexico also. Only 12% of our county is privately owned and the vast amount of the state is controlled by government agencies......

Actually it's in KY.

 

[AriLea]

So how does this sound, EM contracts with a bank to set up a special debit card,
In the account, you save toward your Elio. But EM can't touch the money directly until they deliver your car. Then it's deducted from the account. Any residual you owe transfers into that current payment program they have already set up.

If people withdraw, there's a 10% penalty. But if you keep your money in there, the first 1000 gets the 500 bonus, plus a couple percent as all personal accounts do.

Then the right bank will have let Elio use that as collateral on a bank loan. At least the 10% return is reliable money.

The account owner will only have to take the risk on the 10% return policy, but not via EM. The account is held to the bank.
If EM fails, then the 10%fee will also end, and that money stays as a normal debit account.

 

[Catia]

So how does this sound, EM contracts with a bank to set up a special debit card,
In the account, you save toward your Elio. But EM can't touch the money directly until they deliver your car. Then it's deducted from the account. Any residual you owe transfers into that current payment program they have already set up.

If people withdraw, there's a 10% penalty. But if you keep your money in there, the first 1000 gets the 500 bonus, plus a couple percent as all personal accounts do.

Then the right bank will have let Elio use that as collateral on a bank loan. At least the 10% return is reliable money.

The account owner will only have to take the risk on the 10% return policy, but not via EM. The account is held to the bank.
If EM fails, then the 10%fee will also end, and that money stays as a normal debit account.

I am not sure, and this may work for some reservation holder. Let see what other say! Of course it will be up to Elio Motors,,,I think...?

 

[John Painter]

Contrary to what many may wish to believe EM is not making up financial plans entirely as they go along but instead simply adapting their plans and using their experience to overcome whatever issues they are encountering.

Extraordinarily well said.

 

[JEBar]

Contrary to what many may wish to believe EM is not making up financial plans entirely as they go along but instead simply adapting their plans and using their experience to overcome whatever issues they are encountering.

.... I can understand the emotional responses given by several folks who feel that when it comes to financing, EM has been winging it .... in the real world, that just doesn't wash .... EM has been closely scrutinized by too many private and government entities to not have a solid business plan and funding plan in place .... it is also reasonable to believe that with the passage of time, things can (for me, usually do) change .... plans have to be modified and adapted .... could EM have done a better job of keeping its supporters informed, ABSOLUTELY .... with the recent releases of info about steps they are taking, it appears they are moving to correct that problem .... time will tell and the amount of time EM has to produce results is shrinking

 

[Jim H]

Actually it's in KY.

WOW, didn't realize there was another state that was owned by the Federal government. So much for state's rights.

 

[Chris F]

Horn, I would say that you are the one a bit off on your research. You really should have run a good search on this site as you are not trying to tell us anything we have not discussed and debunked many times now. You should also read the actual detailed applicant guidance and not just the overview. One item to take note of is the fact that some of the ATVM requirements do not apply to the 'Ultra Efficient Vehicle' part of the program and only to the 'qualify components' part.

That can be found here:

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


This is the key part of that document pertaining to this discussion:


The fact is that EM intends to use the loan for establishing the plant for production which is clearly allowable under the terms of the terms of the loan guidelines.

It has also been explained that simulations for both the fuel efficiency and for financials are allowed and encouraged as evidence that there is a reasonable expectation of reaching the fuel efficiency goal and EM paying back the loan which is the standard they must meet. This is also stated in the above linked document.

Many of the loans are indeed awarded for technology which is still under development so simulations are what is being used for the expected fuel efficiency gains. EM is no different in using these simulations as evidence for the loan.

From what we have heard, and it makes logical sense if you think it through, in their application EM used all the plant equipment as both a source of a capital and as their collateral. By selling off the unseeded equipment EM will raise the working capital and this equipment is expected to fetch about $100-$120 million. The equipment that is left for vehicle production, of similar value, provides for the collateral.

The guidelines do not say EM must have a net positive right now but instead 'the applicant has a net present value that is
positive, taking all costs, existing and future, into account." This of course goes back to the financial projections which must 'reasonably' show that EM can pay back the loan.

G1, you are assuming that you can use facts and logic to convince certain people. Unfortunately these trolls just get off by us treating them seriously. Since I'm not a moderator, I have found that the judicious use of the "ignore" function is the best response to trolls.

 

[Chris F]

The failure of start-ups should not be surprising at all as the fact is that 75% of private venture capitalist funded start-ups also fail with about half of those failing without even breaking even.

The Venture Capital Secret: 3 Out of 4 Start-Ups Fail:

http://www.wsj.com/news/articles/SB10000872396390443720204578004980476429190


So what ultimately matters is not the failure rate but instead adding up the losses vs the profit made in the program. This is how venture capitalists make money even when 3 out of 4 of their investments either lose money or simply break even.

And, that does not include the start-up's that don't make it to the VC stage. In my experience, its more like 9 out of 10 that fail.

 

[Chris F]

Granted, they do use some Federal monies (about 5% of their budget relies on it) let's put that in a little perspective on one of those lists of lists that go out, on recently went out that showed how much each State relied on the Feds for their budgets ( http://www.seattlepi.com/news/natio...ation-reveals-states-relying-most-6012183.php ), Alaska did the best with only counting on the Feds to cover 20%. The worst? Mississippi at over 45%! Tax money is used all over the place in ways that we all can't agree on but the fact NPR only needs 5% is pretty darn impressive! I'm guessing that is an even lower percentage than what Elio will be relying on, eh?

And local stations vary. People should understand that NPR doesn't own the local stations. My local station, WHYY, gets almost no government funds (less than 10%).

 

[Chris F]

When you are talking about states owned by the Feds, remember that 100% of those states were originally owned by the Federal government.. For purposes of land ownership, the Federal government is like any other land owner: it can lease the land, sell it or use it for its own purposes. Much of New Mexico and Nevada are military bases, test sites, bomb ranges and the like. Its not like the government didn't own them in the first place. A lot of the land was sold to pay for the transcontinental railroad.