Financing Elio Motors Development And Production

[ecdriver711]

I think the Elio mainstay will be 1. Low initial cost, 2. Low fuel costs. Gas goes up and down sure, either way you save by purchasing less. Like you said, we all use oil. Paul Elio seems determined to compete with the big boys and good for him. When he succeeds, we all will be better off. My take on it anyway.

 

[Mike W]

NPR, so much like the government, a 5% cut is the end of the world.

NPR is entertainment and news like other such corporations. Even the name is an illusion, it's not owned by the public nor is it a required service to the public. It just requires taxpayer handout. Many States do depend on federal tax money. I work near the poorest county in the nation. A county where 90% of the land is owned by the FEDS. No revenue from taxes, no room to grow for business.



More compelling reason to cut taxpayer funding assistance from the NPR budget.

Well, let's agree to disagree. Lots more important stuff to kick around!

By the way I agree, Low initial and fuel costs are what draw me to it! I mean, who in their right mind wouldn't want that!

 

[AriLea]

I think the Elio mainstay will be 1. Low initial cost, 2. Low fuel costs. Gas goes up and down sure, either way you save by purchasing less. Like you said, we all use oil. Paul Elio seems determined to compete with the big boys and good for him. When he succeeds, we all will be better off. My take on it anyway.

You know, on another note that plays well for advocacy investment. The Elio cost to own is lower than other vehicles for commuting, this is money that would be saved for the lower income classes, or anyone for whom it applies (lots of small businesses). That money now becomes available for other uses. It's similar in it's effect to the tax holidays applied during the recession. And it has NO expiration date.

 

[nthawk68]

Hey, maybe the Gobberment will by an Elio for everyone unemployed to job search with, it comes with a cellphone?????

 

[AriLea]

Hey, maybe the Gobberment will by an Elio for everyone unemployed to job search with, it comes with a cellphone?????

IMHO, it would be cheaper than some of the ride-to-interviews-or-work programs they implemented for the unemployed.

If I was an innovative employer, and I wanted a worker who required less pay, but had no transportation, I'd include an Elio short term lease-to-own deal into their offer. That would more likely become a very loyal employee, while they appreciate the car.
If the DES office heard about that one, then they'd put that employer at the top of their first-choice employers list.

 

[Bert]

Actually, that line of thought has credit AriLea!
Again, those who can afford to do so, helping those who're trying to achieve goals!!

 

[pistonboy]

In an August 2014 article by TTAC, Paul Elio said:
“When I asked him if there was anything that would keep them from going into production, Elio told me, “Funding”. When I later asked him to clarify he said that it was a matter of getting their investors to participate in another round of funding. He stressed how they were happy with their existing investors, who themselves are happy about the reservations. Nearly half of the projected 60,000 first year units are already theoretically spoken for. Elio also said that at this time they aren’t looking for more investors.”

This is found at:
http://www.thetruthaboutcars.com/2014/08/exclusive-capsule-review-elio-motors-p4-prototype/
This quote comes in the paragraph after the picture of Paul Elio in the blue shirt in front of P4.

This is slightly confusing to me. He first sounds like funding is not guaranteed. Then he says they are not looking for more investors which sounds like they have all the necessary money needed to go into production.

Goofyone said in one of his posts ( http://www.elioowners.com/threads/is-there-any-physical-and-substantial-progress-towards-production-of-the-elio.5208/page-17#post-78153 ):
“Due to outside interference in the process of leasing the plant, lawsuit and state officials involvement, Elio Motors suffers an eight month delay (Sept 2013-May 2014) in actually having a signed lease on the plant. This delay causes the funding deals EM had lined up to complete the vehicle development and enter production to collapse thus leaving them with limited funding which slows the vehicle development process considerably. However during this time gap Elio Motors is fortunate enough to have the undersecretary of the Department of Energy see and sit in the P4 and this initiates a series of conversations which leads to EM being invited to apply for the revamped ATVM loan program. Along with that EM comes up with a plan to pay for the engine and vehicle development program by selling off the unneeded equipment in the Shreveport plant. This plan allows EM to hopefully enter production without the need for additional outside investors however that option is still available as a backup plan.”

Goofyone: Does this mean EM had the 240 million (needed to enter production) before the delay and then lost it? If so, did they become worried and back out? Were they eager to put their money into something immediately and could not wait? I wonder why they did not come back after the delay was resolved. EM was as “viable” as before.

I hope Corporate Fuel Securities is better at this and come up with investors that can be relied on. This is their area of expertise. Perhaps due to their experience, they know how to write things like this into funding contracts between the two parties.

Engineering talent and financial talent while not guaranteed to be mutually exclusive, do tend to be that way.

 

[Ty]

You know, I'm kinda supprised they did not do that in the beginning. (hind sight) It follows along with the "chose good partners and let them do their thing" concept. Engineering and fund raising are not a common combination of skills

I think Paul wanted to maintain control of the company rather than take on a partner. I would have tried for a loan first and only after that didn't work would I look for an investor.

 

[Jim H]

snipped..... I work near the poorest county in the nation. A county where 90% of the land is owned by the FEDS. No revenue from taxes, no room to grow for business.

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......

 

[goofyone]

...Goofyone: Does this mean EM had the 240 million (needed to enter production) before the delay and then lost it? If so, did they become worried and back out? Were they eager to put their money into something immediately and could not wait? I wonder why they did not come back after the delay was resolved. EM was as “viable” as before.

I hope Corporate Fuel Securities is better at this and come up with investors that can be relied on. This is their area of expertise. Perhaps due to their experience, they know how to write things like this into funding contracts between the two parties.

Engineering talent and financial talent while not guaranteed to be mutually exclusive, do tend to be that way.

The details of exactly what happened are not public however what we do know is that the funding was happening via a private placement similar to what Corporate Fuel Securities is doing for EM now. If you search the forum for private placement you can find references from some forum members, some who even spoke to Paul Elio directly, where the ongoing private placement was discussed nearly a year ago. My guess is that, as the money is not handed to EM in one chunk anyway, but instead in stages or rounds that the outside private placement investors simply moved on when EM was not even able demonstrate their ability to complete the first step of securing the plant within a reasonable timetable. We know this was entirely out of EM's control however this is the downside to new investors as it is very easy for them to walk away at that point since there was no actual money exchanged.

By the way in my opinion EM is actually doing as good a job as they can to stay ahead of issues however a lot of this simply takes time. We know that Corporate Fuels Securities did due diligence on EM for 90 days before the the private placement went public at the beginning of the year. This tell us that the due diligence period began in the early October time period however EM must have contacted them and began discussing the process at least a few weeks, if not a few months, before this which goes back at least to September and likely earlier.

EM is essentially running their older private placement funding plan along side the newer equipment sales/ATVM loan plan. This is a very smart move for EM as it gives them several combinations of funding sources in process at the current time which could work out to provide the funding they need for production. 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.