Friday Blog Is Out

[Rickb]

What's done is done, I'm just hoping that future investors can get past their earlier mismanagement and take a risk with the ELIO which I still believe will sell plenty! I don't know really how many of the original 65K reservation holders are left but whatever is it, it's still a good number. Complete the R&D, find the right engine and get it out there quick for some test drives! Heck, I'm one of those who can't wait to get my hands on one so I can TURBOgize it, fatten the tires, CRAZYpaint it, some might even WING it, we're in America people, the land of innovators and inventors!

I watched an hour long interview with Arcimoto’s CEO last night. One of the interesting questions was, “given your 11 year journey to production, do yo fear copycat competition?” Frohnmayer’s response was why would anybody want to go through the high cost and frustrating long road of getting the copycat vehicle to production, when we would be happy to partner with and or franchise an AMP with any worldwide interest and share our production ready vehicle specs and manufacturing process details.

It seems like an interesting approach for Elio Motors to consider with any proprietary Elio R&D vehicle design and/or engineering components. Partner with a USA motorcycle manufacturer and or Chinese motorcycle manufacturer like Zongshen, to finally build a road worthy Elio ICE, Hybrid, or pure electric, whatever has the greatest potential market demand, success, and financial return for investors.

 

[Sega]

What's done is done, I'm just hoping that future investors can get past their earlier mismanagement and take a risk with the ELIO which I still believe will sell plenty! I don't know really how many of the original 65K reservation holders are left but whatever is it, it's still a good number. Complete the R&D, find the right engine and get it out there quick for some test drives! Heck, I'm one of those who can't wait to get my hands on one so I can TURBOgize it, fatten the tires, CRAZYpaint it, some might even WING it, we're in America people, the land of innovators and inventors!

But why would they take a risk with Elio? They can do it on their own if they want. Elio doesn't have anything that makes them that valuable.

 

[3wheelin]

But why would they take a risk with Elio? They can do it on their own if they want. Elio doesn't have anything that makes them that valuable.

Very true. Or they can consider a few things that EM have already done- 1) they can save money on marketing, 2) 65K reservations and could be more when they've completed the R&D, 3) they only need to find a proven 3cy. engine (they could offer a turbo version at a higher price), 4)EM worked hard to lobby helmet laws), etc. But it's all dependent on how much more money the potential "new investors" have to shell out against how much money they can make in completing this ELIO project.

 

[Sega]

Very true. Or they can consider a few things that EM have already done- 1) they can save money on marketing, 2) 65K reservations and could be more when they've completed the R&D, 3) they only need to find a proven 3cy. engine (they could offer a turbo version at a higher price), 4)EM worked hard to lobby helmet laws), etc. But it's all dependent on how much more money the potential "new investors" have to shell out against how much money they can make in completing this ELIO project.

1) True, but the marketing wouldn't really take that much. If anything, they would have to do a marketing campaign over showing why people should trust the "new" elio motors. I don't think there is that much value in how much Elio has marketed.

2) The reservations are nice, but many people have decided to move on. The R&D won't be completed until they get more money.

3) Eh, not quite. Nobody here knows whether this car just needs an engine slapped in or not. To my knowledge, there has been very little testing. There may be some major changes necessary or desired changes that the new investment company would want.

4) That's a sunk cost. Elio essentially lobbied on everyone's behalf. It was nice of them, but why pay for someone to do something if they have already done it for free? lol.

Absolutely, it all comes down to money and the fact that nobody has really put in significant money shows that either the investors are blind and this is one of those few things that people have missed. Or the value just isn't there.

Also, another thing to figure is that Paul would have to give up control. No investor is going to give Paul this blank check and let him do as he pleases.

Some investors will probably think of it this way. Think of a person who builds a house. It is off level, not square, leaning and about to tip over. Now, you could either buy that house and try to fix every thing that you think is wrong, or just build one on your own.

 

[3wheelin]

1) True, but the marketing wouldn't really take that much. If anything, they would have to do a marketing campaign over showing why people should trust the "new" elio motors. I don't think there is that much value in how much Elio has marketed.

2) The reservations are nice, but many people have decided to move on. The R&D won't be completed until they get more money.

3) Eh, not quite. Nobody here knows whether this car just needs an engine slapped in or not. To my knowledge, there has been very little testing. There may be some major changes necessary or desired changes that the new investment company would want.

4) That's a sunk cost. Elio essentially lobbied on everyone's behalf. It was nice of them, but why pay for someone to do something if they have already done it for free? lol.

Absolutely, it all comes down to money and the fact that nobody has really put in significant money shows that either the investors are blind and this is one of those few things that people have missed. Or the value just isn't there.

Also, another thing to figure is that Paul would have to give up control. No investor is going to give Paul this blank check and let him do as he pleases.

Some investors will probably think of it this way. Think of a person who builds a house. It is off level, not square, leaning and about to tip over. Now, you could either buy that house and try to fix every thing that you think is wrong, or just build one on your own.

You certainly make some good points there Sega. It is a pain with any "take over" (..or makeover...or company overhaul), all the red tape, etc. Also, EM's projected base price of sub-8K seems a bit ambitious after all these years and that's the worry in my opinion only. It sounds really good for us potential buyers, but maybe not so much for business minded investors.

 

[RSchneider]

One thing nobody has touched on is the current liabilities of the company. This is something that you cannot avoid. If you read through the SEC filings, they are accumulating debt on things like lease payments, payments to CH Capital and payments to Racer Trust. They keep extending these and manipulating them here and there, but when a new partner shows up with lots of cash, that means the legacy debt will need to be paid now. Then the payments (equipment loan, lease, job creation) will have to be paid on time all while Elio will need 18 months before production.

There's another liability and that comes from the 65K reservations. Even though it sounds great, you have to look at what it means when Elio goes into production. In the SEC filings, Elio was around a $7,526 price they needed to sell the car for. Using that number, lets look at a few things.

1. Approximately 21,400 people locked into a $7,000 base price. They got a minimum of a $500 bonus. That means Elio will take a $43.5M hit on those first cars.

2. Approximately 38,000 people locked into a $7,300 base price. Not counting discount, that means a $8.5M hit on those cars. If you look at anywhere from $25 - $250 discount and average it to a generous $100, that means an additional $3.8M hit.

3. Approximately 5,900 people have reserved with refundable and got a discount. With a 25% discount and an average of $100, that's $590,000.

Adding up those 65K reservations, the liability is 43.5M + 8.5M + 3.5M + 590K = $56M . So, that's approximately $56M that Elio will never see on the first years production.

Since Elio has no experience at building cars and this being the first time, the first group of cars will be the most expensive ones to build. This is reality in the world of manufacturing. Even seasoned manufacturers run into this and they have been building cars for many years. Just look at Tesla. That Model 3 has been a pain and Elon thought he could show everyone how it's done. All of the experts were right as to building in low volume is easy, it's when you go to high volume, it's a whole different ballgame. They struggled and still struggle. Expect no different from Elio. Only difference is, Tesla started with the most expensive ones and the deposits were refundable. For Elio, those deposits are long gone and they offered a discount to those reservation holders.

 

[Rickb]

One thing nobody has touched on is the current liabilities of the company. This is something that you cannot avoid. If you read through the SEC filings, they are accumulating debt on things like lease payments, payments to CH Capital and payments to Racer Trust. They keep extending these and manipulating them here and there, but when a new partner shows up with lots of cash, that means the legacy debt will need to be paid now. Then the payments (equipment loan, lease, job creation) will have to be paid on time all while Elio will need 18 months before production.

There's another liability and that comes from the 65K reservations. Even though it sounds great, you have to look at what it means when Elio goes into production. In the SEC filings, Elio was around a $7,526 price they needed to sell the car for. Using that number, lets look at a few things.

1. Approximately 21,400 people locked into a $7,000 base price. They got a minimum of a $500 bonus. That means Elio will take a $43.5M hit on those first cars.

2. Approximately 38,000 people locked into a $7,300 base price. Not counting discount, that means a $8.5M hit on those cars. If you look at anywhere from $25 - $250 discount and average it to a generous $100, that means an additional $3.8M hit.

3. Approximately 5,900 people have reserved with refundable and got a discount. With a 25% discount and an average of $100, that's $590,000.

Adding up those 65K reservations, the liability is 43.5M + 8.5M + 3.5M + 590K = $56M . So, that's approximately $56M that Elio will never see on the first years production.

Since Elio has no experience at building cars and this being the first time, the first group of cars will be the most expensive ones to build. This is reality in the world of manufacturing. Even seasoned manufacturers run into this and they have been building cars for many years. Just look at Tesla. That Model 3 has been a pain and Elon thought he could show everyone how it's done. All of the experts were right as to building in low volume is easy, it's when you go to high volume, it's a whole different ballgame. They struggled and still struggle. Expect no different from Elio. Only difference is, Tesla started with the most expensive ones and the deposits were refundable. For Elio, those deposits are long gone and they offered a discount to those reservation holders.

You squashed the little hope I had to ever test drive an Elio. The Venture capital market will not fund that hot mess. Wait a minute, perhaps all-in reservationists will waive their lock-in price and discounts to help attract investors by making EM more profitable?

 

[RSchneider]

I did find in the latest SEC filing this (as of June 30, 2018):

$7K locked in commit to buy - 21,195 units (total discounts - $15,637,455) (average of $737.79 per unit)
$7.3K locked in non commit to buy - 36,597 units (total discounts - $15,626,030) (average of $426.97 per unit)
Total Reservations - 65,460 units
Refundable - 7,668 units
Total reservations - $28M (average of $427.74 per unit)
Of the $28M in reservations, $1.11M is held because of refundable reservations.

Total discounts on the non refundable total is $31,263,485. Remember this is not counting the money people put down($100 to $1000). So, the numbers in my last post are not correct because the number of reservations I have are off. Still, all of the non reservation money has been spent, so it'll never come back. Plus from 2013 to June 30, 2018 Elio spent $15,299,927 in Marketing and Advertising.

As you can see, these are the numbers that an investor will look at. Elio produces these numbers so the only way to make it look better is if a bunch of of the non refundables do not buy the car due to various circumstances.

 

[Johnny Acree]

Follow up VW news
https://www.tennessean.com/story/mo...en-electric-car-chattanooga-plant/2565780002/

 

[RUCRAYZE]

One thing nobody has touched on is the current liabilities of the company. This is something that you cannot avoid. If you read through the SEC filings, they are accumulating debt on things like lease payments, payments to CH Capital and payments to Racer Trust. They keep extending these and manipulating them here and there, but when a new partner shows up with lots of cash, that means the legacy debt will need to be paid now. Then the payments (equipment loan, lease, job creation) will have to be paid on time all while Elio will need 18 months before production.

There's another liability and that comes from the 65K reservations. Even though it sounds great, you have to look at what it means when Elio goes into production. In the SEC filings, Elio was around a $7,526 price they needed to sell the car for. Using that number, lets look at a few things.

1. Approximately 21,400 people locked into a $7,000 base price. They got a minimum of a $500 bonus. That means Elio will take a $43.5M hit on those first cars.

2. Approximately 38,000 people locked into a $7,300 base price. Not counting discount, that means a $8.5M hit on those cars. If you look at anywhere from $25 - $250 discount and average it to a generous $100, that means an additional $3.8M hit.

3. Approximately 5,900 people have reserved with refundable and got a discount. With a 25% discount and an average of $100, that's $590,000.

Adding up those 65K reservations, the liability is 43.5M + 8.5M + 3.5M + 590K = $56M . So, that's approximately $56M that Elio will never see on the first years production.

Since Elio has no experience at building cars and this being the first time, the first group of cars will be the most expensive ones to build. This is reality in the world of manufacturing. Even seasoned manufacturers run into this and they have been building cars for many years. Just look at Tesla. That Model 3 has been a pain and Elon thought he could show everyone how it's done. All of the experts were right as to building in low volume is easy, it's when you go to high volume, it's a whole different ballgame. They struggled and still struggle. Expect no different from Elio. Only difference is, Tesla started with the most expensive ones and the deposits were refundable. For Elio, those deposits are long gone and they offered a discount to those reservation holders.

you are assuming that all 1k will purchase?