Investor Question Answered...

[JNR]

Nevertheless, I'll even grant you that they "say" their margin/profit is $2K/vehicle, so x 40K reservations = 80K profit.

Better check your arithmetic.

 

[mike brown]

40000
X 2000
= 80,000,000.
Just sayin.


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[mike brown]

So im going back over to the ford forum. They really seem to like it when i post pics of my challenger. Them guys are so funny. Always callin me an asshat.


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[outsydthebox]

Just nowhere enough substantial to attract investors, to fund the project.

It takes hundreds of millions of more investment up front, closer to 1B, plus years of time to even get operations into a scale of efficiency that would even prepare EM to make any money.

Just keeping i

Here is the problem...

Nevertheless, I'll even grant you that they "say" their margin/profit is $2K/vehicle, so x 40K reservations = 80K profit.

Excuse me, but 2,000 x 40,000 = 80,000,000 that is 80 million dollars.

 

[LillyMayPatterson #1685 & #5648]

Snick, Snick, Snick.....what can I tell ya....you worry too much about saving your so called "lost souls"! They're not kids....they've got brains like you and they are capable of figuring out what they want! They can figure out the risks! Nobody will stop you or even arrest you if you show up in one of EM showings with a big sign saying "don't make a deposit until they start producing!" That's where you can make a big difference if you're so concerned!

JP, If I see this I will be standing next to him with a sign of my own. It will have an arrow pointing to him and some cussing. There is no reason anybody should be on here preaching worry. The world is going to hell and I simply don't care what his opinions are.

 

[Ekh]

Just nowhere enough substantial to attract investors, to fund the project.

It takes hundreds of millions of more investment up front, closer to 1B, plus years of time to even get operations into a scale of efficiency that would even prepare EM to make any money.

Just keeping it simple. Lets even say double the reservations from 20K to 40K, and assume they all turn into orders, say for the first year of production.

Here is the problem. They advertise the price at $6800. But, they estimate the Bill of Materials costs at @$5K per vehicle. Now, this is just a BOM cost, what it costs for the parts, not everything else it costs to run a major company with thousands of employees, retail centers, which is called the true Cost of Goods sold (COGS).

Nevertheless, I'll even grant you that they "say" their margin/profit is $2K/vehicle, so x 40K reservations = 80K profit.

Now yippee they say, but oh wait, EM owes the initial investors back first a return on their 200M investment, first, and then those investors expect to be paid with some unknown yield of profit on loaning them the 200M to begin with, first. Oh, and after launch by the way, to keep improving the factory and setting up dealers, hiring, tooling, fixing recalls, we need hundreds of millions more, keep it coming my friendly investors....

So then, you can now see why EM is having "trouble" securing the rest of the 150M they need to launch, no investor will invest money in something where the numbers don't nearly add up. You need several years of shipping 40K/month of Elios to even have a shot at JUST breaking even.

For some reason many here don't seem to grasp the numbers. I love the Elio vehicle itself, but this is a business, run by engineers with a dream, its like some average film directors out trying to raise 200M to fund making a movie. The risk is far too high to generate the level of investment it will take.

You can't ignore how silly even vamped up numbers here make this operation look silly.

OK, let's assume sanity prevails and Mr. Elio decides that the car is still an attractive bargain at $8,500 for the base and figures on an average of $1200 more in options and upgrades, at 50% margin for those goodies. He also decides to give up on his brand-new engine and buy engines from Ford, Toyota, or Fiat, thus removing $100 million of his start-up costs. Now what happens? Do investors come out of the woodwork?

In other words, what WOULD be a successful value proposition for the Elio? What's a scenario this very determined man can live with and feel he's actually making the kind of major contribution he really wants to make?

Small car start-ups have succeeded. And most have gone under. I once owned a Marcos, plywood chassis, fiberglass body, Volvo engine, Ford rear end, Laycock overdrive (from an Austin Healey), dome light from a Vauxhall Cresta, etc. It weighed 1600 pounds, got 25 mpg, and was a grossly inadequate car in many ways -- but a blast to drive.

They didn't stay in business for more than about 8 years or so, but they lasted as long as they did by having most of the components off the shelf -- same as Elio is doing. What wasn't off the shelf was body parts and suspension. THAT was what made the car so much fun. You couldn't flip it, it had race-car handling, and it went like stink. You could drive UNDER a semi-truck.

So, I think it MIGHT be done -- but if he wants to build more that 500 a year, he's got to minimize one-off engineering solutions. And he's got to produce a reliable product with high quality control standards. Both of those may be possible, and I'm hoping good things happen. But …. not at $6800 and maybe not at 90% American parts.

 

[outsydthebox]

OK, let's assume sanity prevails and Mr. Elio decides that the car is still an attractive bargain at $8,500 for the base and figures on an average of $1200 more in options and upgrades, at 50% margin for those goodies. He also decides to give up on his brand-new engine and buy engines from Ford, Toyota, or Fiat, thus removing $100 million of his start-up costs. Now what happens? Do investors come out of the woodwork?

In other words, what WOULD be a successful value proposition for the Elio? What's a scenario this very determined man can live with and feel he's actually making the kind of major contribution he really wants to make?

Small car start-ups have succeeded. And most have gone under. I once owned a Marcos, plywood chassis, fiberglass body, Volvo engine, Ford rear end, Laycock overdrive (from an Austin Healey), dome light from a Vauxhall Cresta, etc. It weighed 1600 pounds, got 25 mpg, and was a grossly inadequate car in many ways -- but a blast to drive.

They didn't stay in business for more than about 8 years or so, but they lasted as long as they did by having most of the components off the shelf -- same as Elio is doing. What wasn't off the shelf was body parts and suspension. THAT was what made the car so much fun. You couldn't flip it, it had race-car handling, and it went like stink. You could drive UNDER a semi-truck.

So, I think it MIGHT be done -- but if he wants to build more that 500 a year, he's got to minimize one-off engineering solutions. And he's got to produce a reliable product with high quality control standards. Both of those may be possible, and I'm hoping good things happen. But …. not at $6800 and maybe not at 90% American parts.

I appreciate your questions, But IMHO you would be better off asking EM. Please let us know what they say.

 

[Ekh]

I appreciate your questions, But IMHO you would be better off asking EM. Please let us know what they say.

I will be checking out the P4 prototype tomorrow in Columbus, OH, and have every intention of finding out anything and everything I can. Depends on who's there, of course, but with luck I can ask a handful of the questions that have been bugging me and some others … as well as trying for some fresh photos, esp. of the trunk area and (again with luck) a fish-eye shot from the driver's seat. Also want a close-up of the external suspension members. But most important of all is butt-checking that seat!

 

[Rayl]

OK, let's assume sanity prevails and Mr. Elio decides that the car is still an attractive bargain at $8,500 for the base and figures on an average of $1200 more in options and upgrades, at 50% margin for those goodies. He also decides to give up on his brand-new engine and buy engines from Ford, Toyota, or Fiat, thus removing $100 million of his start-up costs. Now what happens? Do investors come out of the woodwork?

In other words, what WOULD be a successful value proposition for the Elio? What's a scenario this very determined man can live with and feel he's actually making the kind of major contribution he really wants to make?

Small car start-ups have succeeded. And most have gone under. I once owned a Marcos, plywood chassis, fiberglass body, Volvo engine, Ford rear end, Laycock overdrive (from an Austin Healey), dome light from a Vauxhall Cresta, etc. It weighed 1600 pounds, got 25 mpg, and was a grossly inadequate car in many ways -- but a blast to drive.

They didn't stay in business for more than about 8 years or so, but they lasted as long as they did by having most of the components off the shelf -- same as Elio is doing. What wasn't off the shelf was body parts and suspension. THAT was what made the car so much fun. You couldn't flip it, it had race-car handling, and it went like stink. You could drive UNDER a semi-truck.

So, I think it MIGHT be done -- but if he wants to build more that 500 a year, he's got to minimize one-off engineering solutions. And he's got to produce a reliable product with high quality control standards. Both of those may be possible, and I'm hoping good things happen. But …. not at $6800 and maybe not at 90% American parts.

I'm keeping my faith in the management team, besides if big money was a problem I'd expect the Elio team to buy a 'shelved' stock (instead of an expensive IPO) sell maybe 100million shares of 150million authorized, for three four bucks a share----21,000 reservations bagged--that is some serious motivation for not even being out of prototype mode. Elio hasn't gone that way, (stocks,) which tells me they have serious intent and confidence in their plan. However, if they ever did go public--I'd be buying some shares. Rayl

 

[imageon]

A little negativity goes a long way with me. I joined this forum to find out more about the car. Here say, conjecture, and once-apon-a-time don't get it.
There seems to be a concerted and continuing effort by Mr. Elio to get this done. Maybe Warren Buffet could take the edge of of things. See I to can project conjecture. To me the cup is half full. This thing is worth investing in and I did. I am part of it and will remain part of this forum even if it is sometimes painful to read what some think. "Get-er-done!
MK