Paul Elio Speaks! 05-11-18

[ElioWallSteet]

Does anyone know Elio's credit rating? I used to know how to look that up but I can't find it now. I don't think the suppliers will take ElioCoin but I do think they will accept orders on credit, possibly in exchange for favorable terms down the line. Pep Boys for example will benefit greatly from this if it turns out how they want it to. A fairly decent sized auto parts store with a side job of general "fast lube" style service will now have people driving out of their way to get work done.

I looked up their Dun & Bradstreet D-U-N-S number last week...Elio Motors Credit rating is dismal...and there was a footnote indicating possible insolvency going forward...

None of that should be a surprise... it’s no secret they have not been able to meet their past financial obligations...

Currently...none of the suppliers would consider Elio credit worthy... and this could make it harder to negotiate lower prices on subcomponents...

Business credit is no different than personal credit...the better your credit...the easier it is to negotiate favorable financial terms...

 

[Sega]

I looked up their Dun & Bradstreet D-U-N-S number last week...Elio Motors Credit rating is dismal...and there was a footnote indicating possible insolvency going forward...

None of that should be a surprise... it’s no secret they have not been able to meet their past financial obligations...

Currently...none of the suppliers would consider Elio credit worthy... and this could make it harder to negotiate lower prices on subcomponents...

Business credit is no different than personal credit...the better your credit...the easier it is to negotiate favorable financial terms...

I worked in credit for a billion dollar company and the DUNS number greatly influenced how much credit we gave or didn't give to a company. When I say I worked in credit, it was mainly my manager and I, so I actually had some say. Iirc, there was a certain threshold and if they were under that, we would make them prepay. Every once in a while, there would be a company that actually had lots of revenue, but a poor DUNS number.....but again, they had lots of money coming in and we never had issues with those companies.

Like you said, It's roughly their credit score. Say someone that didn't have a job and had a 200 credit score came to you asking for a loan, what would you tell them?....Exactly. That's exactly what credit is.....a loan.

 

[mkiker2089]

That is not what I was wanting to hear, but I'm not surprised. Their credit score could go up if the dreams really do start turning into reality but for now they will have to pre-pay. Luckily for them if the cars can get started somehow they do have orders lined up. Building the first thousand for example would fund the next. I'm not saying it will happen, but I do still hope it does. Plan for the worst and hope for the best.

 

[Sega]

That is not what I was wanting to hear, but I'm not surprised. Their credit score could go up if the dreams really do start turning into reality but for now they will have to pre-pay. Luckily for them if the cars can get started somehow they do have orders lined up. Building the first thousand for example would fund the next. I'm not saying it will happen, but I do still hope it does. Plan for the worst and hope for the best.

They have potential orders lined up. I'm sure several of the 65,000 "orders" were people who put down $100 a long time ago and have since then bought a different vehicle.

All I'm saying is that many people like to count the 65k as a hard number when you can't do that. (Not "You" specifically). Even in the hypothetical that they got a few vehicles on the road and orders, that money would have to be reinvested. It would take a while for them to get any real credit IMO.

 

[Bookly]

maybe suppliers will take ElioCoin? Kinda like an IOU?

Some days this site reads like a car site run by flat earth believers.

 

[raptor213]

I wish we were privy enough to bear witness to the numbers Elio executives are crunching as they continue to execute their business plan. Here's what I mean --

Last Friday in Caddo Parish, Paul Elio stated more than once (perhaps first in his prepared remarks and a couple times later in framing answers to media questions) that the 66,xxx existing reservations translates indirectly to over $700,000,000. He broke it down further by explaining how there's margin built into the base price of the Elio plus the markup on accessories and options.

That's all fine and good, except that I feel his audience of reporters misinterpreted the meaning and took his figures out of context when drafting their stories and news releases.

When you say you still need some undisclosed dollar figure less than $376 million to reach cash-flow positive, and back that up by implying that the existing reservations translates to $700 million in order to justify corporate viability, it's entirely misleading.

This is a classic example of the general public not understanding the difference between revenue and profit. Let's say there's $1,000 of profit margin built into the price of the Elio. Great, the company exists to make money. And there's a 25% markup on add-ons with the typical buyer adding $3,000 of options and accessories (remember the AMT transmission is about $1k on its own!), of which $750 goes into Elio's pocket. That means the average profit from an Elio purchase transaction is $1,750.

Well, for the duration that it takes Elio Motors to build and deliver Elio vehicles to the backlog of 66,xxx existing reservation holders, they are likely averaging a loss on every transaction. Everyone has qualified for various bonuses, incentives, deposit match offers, etc, but as an example, I'll provide my situation:

List Price: $7,450
-- except I locked in at $7,000, cheating Elio of $450...
-- Non-refundable reservation deposit of $1,000 which had been spent by Elio Motors years ago but they still have to honor it by deducting that amount from my transaction...
-- 50% deposit match of $500...

So if I represent the average Elio buyer, and that translates to $1,750 in profit, but they have to deduct $1,950 from my purchase transaction, they're selling me my Elio at a $200 loss. When I take delivery of my Elio, it costs them money to hand me the keys.

Profitability and reaching cash-flow positive is not attainable until well after the first 66,xxx vehicles roll off the assembly line. Understanding that basic math should make all of us pause and reflect on why the investment capital hasn't been infused into the project yet. Do I stand by the vehicle, the vision, the four basic tenets, the potential good that the Elio could provide to society? Of course. But the business plan has flaws.

 

[BADBOY]

He said.
1. The permanent delay is over.
2. Did not lose any suppliers during the delay.
3. We need hundreds of millions.
4. This funding will take us all the way home.
5. If STO goes according to plan, won't wait on money.
I found that #5 statement interesting, maybe suppliers will take ElioCoin? Kinda like an IOU?

thanks for posting. Some questions for anyone to answer.

Why would any suppliers leave? None of them have invested any money (other than some individuals putting up a deposit on a car). Every time the name of their company is mentioned it's free advertising.

The STO as I understand was $2.5 million of which an unknown [to us] amount will pay some bills. To get the 25 IIRC cars to test it took most if not all of the crowd funding of way more than that.

Elio coin really expected to bring in enough cash to start building 12-18 months from now?

What happened recently that did not or could not happen during the "permanent delay?"

I'm still optimistic my thousand will be coming back to me in my Licorice.

 

[booboo]

I wish we were privy enough to bear witness to the numbers Elio executives are crunching as they continue to execute their business plan. Here's what I mean --

Last Friday in Caddo Parish, Paul Elio stated more than once (perhaps first in his prepared remarks and a couple times later in framing answers to media questions) that the 66,xxx existing reservations translates indirectly to over $700,000,000. He broke it down further by explaining how there's margin built into the base price of the Elio plus the markup on accessories and options.

That's all fine and good, except that I feel his audience of reporters misinterpreted the meaning and took his figures out of context when drafting their stories and news releases.

When you say you still need some undisclosed dollar figure less than $376 million to reach cash-flow positive, and back that up by implying that the existing reservations translates to $700 million in order to justify corporate viability, it's entirely misleading.

This is a classic example of the general public not understanding the difference between revenue and profit. Let's say there's $1,000 of profit margin built into the price of the Elio. Great, the company exists to make money. And there's a 25% markup on add-ons with the typical buyer adding $3,000 of options and accessories (remember the AMT transmission is about $1k on its own!), of which $750 goes into Elio's pocket. That means the average profit from an Elio purchase transaction is $1,750.

Well, for the duration that it takes Elio Motors to build and deliver Elio vehicles to the backlog of 66,xxx existing reservation holders, they are likely averaging a loss on every transaction. Everyone has qualified for various bonuses, incentives, deposit match offers, etc, but as an example, I'll provide my situation:

List Price: $7,450
-- except I locked in at $7,000, cheating Elio of $450...
-- Non-refundable reservation deposit of $1,000 which had been spent by Elio Motors years ago but they still have to honor it by deducting that amount from my transaction...
-- 50% deposit match of $500...

So if I represent the average Elio buyer, and that translates to $1,750 in profit, but they have to deduct $1,950 from my purchase transaction, they're selling me my Elio at a $200 loss. When I take delivery of my Elio, it costs them money to hand me the keys.

Profitability and reaching cash-flow positive is not attainable until well after the first 66,xxx vehicles roll off the assembly line. Understanding that basic math should make all of us pause and reflect on why the investment capital hasn't been infused into the project yet. Do I stand by the vehicle, the vision, the four basic tenets, the potential good that the Elio could provide to society? Of course. But the business plan has flaws.

I plan on a few options, no auto trans though. So I will add leather buckets, speakers, and some other cool stuff, so Elio Motors does not lose on my $6,500 lock-in reservation buy.

 

[booboo]

Another tidbit from KSLA
http://www.ksla.com/clip/14342764/paul-elio-says-cars-are-coming

 

[Made in USA]

Regarding the profitability of Elio Motors, Raptor213 is correct in that it is unlikely to be profitable until after all the reservations have been fulfilled. More likely, it will take more than a year, and that is assuming the production line gets up to speed quickly and there are no quality issues. I wonder if all the headaches Paul is having is hurting his engineering enjoyment.