Send Email To Dop To Show Support For Elio Motors Loan.

[goofyone]

Well I'm glad someone is showing some sense about the timeline for the loan. I was being optimistic when I said 'six months'.

I find it hard to believe they will be able to get the plant up and running in as little as four months though. Hats off to them If they can do it, but I'm hoping their model is to secure enough private equity in 2014 to be fully funded through initial production. If ATVM comes though, so much the better.

It should not be too difficult to get the plant running fairly quickly next year as that timeframe is not the whole story. We know that people can be hired and trained fairly quickly and keep in mind that EM has already completed the production line design phase and completed a full inventory of the plant equipment. They have also to us that they have begun rearranging the equipment in the plant so that much of the preliminary work has already been completed or is currently under way in advance of full plant funding. This is process will be aided via the additional fundraising they are doing by selling off excess equipment which will not be needed.

EM has said directly that at this point they are waiting for the ATVM process and not taking further investments until that process is complete. It would make sense if EM has a deadline in their planning where they may proceed with additional funding as necessary to keep the plant process moving forward however from what we know they feel they have plenty of time before that become necessary. They have also told us that they have a way forward even if the ATVM loan is denied so we will just have to sit back and watch and see what develops.

 

[CompTrex]

EM has said directly that at this point they are waiting for the ATVM process and not taking further investments until that process is complete.

When you say waiting, you mean that they are not looking for investments until the loan process, not that they have stopped moving forward until the loan comes through, correct? I mean, they're still doing stuff on the engine, the prototype, the plant, the helmet laws, etc...right?o_O

 

[Ekh]

When you say waiting, you mean that they are not looking for investments until the loan process, not that they have stopped moving forward until the loan comes through, correct? I mean, they're still doing stuff on the engine, the prototype, the plant, the helmet laws, etc...right?o_O

G1, your sanity is always appreciated. Waiting is not appreciated! (that's mostly a joke; we may not like it, but we don't have an option). What I am increasingly coming to suspect is that there is in fact a very large investor lurking back in the weeds. At this point Elio is getting things done, is obviously moving forward (yea!), and is doing it without much visible money. Yes, they have assets. They have $20 M or so in reservation money, $40 M in anticipated revenue from sale of unwanted plant fixtures, plus whatever their investors have kicked in that hasn't yet been spent -- minus running expenses, getting the engine built and tested, touring, trade shows like SEMA, and other marketing-related expenses, etc.

We have no way of knowing what their actual assets are (though DOE surely knows, because Elio had to have an audit done specifically for the ATVM loan guarantee application). They run lean, but there is still a horrific burn rate. And $60 million in cash and more or less liquid assets does not equal $180 million.

On the plus side, Paul seems genuinely relaxed about money. He has said publicly that this project is, barring screw ups and disasters, an unstoppable force. Finding out that he could get a bunch of money back from the plant equipment clearly (and publicly) made a big difference to him.

All of which leads me to think that the current investors WILL continue to back the project, and that we will in the next six months see the 25 pre-production test vehicles doing their thing. Perhaps there's a bag of gold already hidden the back room, or perhaps it is a matter of getting more money from current investors. We do in fact have to wait and see. If work continues briskly without waiting for the ATVM loan to come through, we can be pretty sure that the investors have come through. If things grind to a halt, pushing production start into 2016 or worse, that will tell us something, too. Meanwhile, I'm enjoying the current flush of activity and am optimistic things will stay on the rails.

 

[goofyone]

When you say waiting, you mean that they are not looking for investments until the loan process, not that they have stopped moving forward until the loan comes through, correct? I mean, they're still doing stuff on the engine, the prototype, the plant, the helmet laws, etc...right?o_O

You are correct. What EM has told us is that they are not accepting any more private investment money while ATVM loan process is underway. However everything else you mentioned should be continuing to move forward and indeed needs to continue moving forward so everything can be ready when the funding is secured.

 

[Jeff Porter]

I'd like to offer some FAQs I pulled from the DOE ATVM FAQ site (http://energy.gov/lpo/atvm-faqs). I searched this thread for evidence that these had been posted whole and did not see them so if so, forgive my oversight.

HOW WILL THE EVALUATION PROCESS WORK:

The evaluation process will include four steps. In the first step, an application will be reviewed to see if it is substantially complete. If it is not DOE will notify the applicant what additional information it needs to provide DOE. Once an application is substantially complete, in the second step, the applicant and the project will be evaluated to determine if they are eligible for the ATVMIP. If they are not eligible, the application review process will end. If both the applicant and the proposed project are eligible, in the third step, the proposed project will be evaluated, potential terms and conditions of a loan will be developed and a decision will be made whether to make a loan. The fourth and final step is the negotiation and, if the negotiation is successful, the closing of the loan. The entire process will involve dialogue and exchange of information between the applicant and DOE in each step.

DOES A DETERMINATION THAT THE APPLICATION IS SUBSTANTIALLY COMPLETE MEAN THAT THE DOE HAS DETERMINED THAT THE APPLICANT AND PROJECT ARE ELIGIBLE FOR A LOAN?

No. The determination of substantial completeness is the first step in the review process. Applicant and project eligibility are determined in the second step of the review process.

WHAT IS NEPA?

NEPA is the National Environmental Policy Act, which requires Federal agencies to assess the environmental impact of all major Federal actions significantly affecting the quality of the human environment. The White House Council on Environmental Quality (CEQ) has promulgated NEPA implementing regulations1 that are applicable to all agencies. DOE’s NEPA order2 and regulations3 and DOE’s NEPA Compliance Program[K1] contain implementing procedures that specifically address their programs. The NEPA Flow Chart nicely displays the steps in the NEPA process.

There are three types of review under NEPA: categorical exclusions (CX), environmental assessments (EA), and environmental impact statements (EIS). DOE’s NEPA implementing regulations specify actions that normally require an EIS or an EA, and actions that can be categorically excluded. DOE’s categories of actions identifying CXs, EAs, and EISs are listed in Appendices A, B, C, and D to Subpart D ofDOE’s NEPA rule. An EIS is a detailed analysis of actions presumed to have significant environmental impacts, and is followed by a Record of Decision (ROD). An EA is a concise public document that briefly provides sufficient evidence and analysis for determining whether to make a Finding of No Significant Impact (FONSI) or prepare an EIS. CX refers to a category of actions which do not individually or cumulatively have a significant effect on the human environment and do not require an EA or EIS. Examples of EAs and EISs can be found on the DOE Office of NEPA Policy and Compliance website athttp://www.gc.energy.gov/NEPA/DOE_NEPA_documents.htm.
1 40 CFR Parts 1500-1508 [http://ceq.hss.doe.gov/Nepa/regs/ceq/toc_ceq.htm]
2 DOE Order 451.1B
3 10 CFR Part 1021

HOW DOES NEPA APPLY TO DOE LOAN GUARNATEES?

DOE’s loan guarantees are considered major Federal actions and are subject to NEPA review. NEPA compliance is integrated into DOE’s Loan Guarantee Program Office (LGPO) decision-making procedures to ensure that environmental impacts are considered throughout the loan guarantee process. The NEPA review must be completed before a loan guarantee can be issued.

Thanks Tony! I've been looking for this.

 

[Kuda]

Snipped: They have also told us that they have a way forward even if the ATVM loan is denied so we will just have to sit back and watch and see what develops.

Was in Shreveport two weeks ago on business. Stopped by the plant & went
into the Visitors Center. Skeleton crew manning the entrance. Asked a
fella if I said the name 'Elio' did he know what I was talkin about. He said
"Oh Yeah." I said: "I'm probably not the first person to ask you that.". He
said: "No, you're not." He said Paul was recently there (which I knew) &
did I know Gino. I said I knew who Gino was & that if anyone could get
The Elio to production, he could. He said Gino was there doin computer
work. They aren't letting the public go into the plant yet. I told him I would
see him again, next fall..............

From the Visitors center I drove over to the gate by
the Assembly Bldg. & took this pic.

 

[Jeff Porter]

Something jumps out at me, forgive me if this has been addressed already... according to the FAQ Tony posted, it's really a 4-step process, seems like recently that the media has stated it as a 3-step process:

1. An application will be reviewed to see if it is substantially complete. This is the step that's been done, correct?
2. The applicant [Elio Motors] and the project [the Elio vehicle] will be evaluated to determine if they are eligible for the ATVMIP. This is the current step now, correct?
3. The proposed project will be evaluated, potential terms and conditions of a loan will be developed [$185 million, correct?] and a decision will be made whether to make a loan.
4. The negotiation and, if the negotiation is successful, the closing of the loan.

Also, "...the entire process will involve dialogue and exchange of information between the applicant and DOE in each step." Would be very interesting to know how long it takes the DoE to respond to EM as the dialogue moves along.

 

[CompTrex]

Something jumps out at me, forgive me if this has been addressed already... according to the FAQ Tony posted, it's really a 4-step process, seems like recently that the media has stated it as a 3-step process:

1. An application will be reviewed to see if it is substantially complete. This is the step that's been done, correct?
2. The applicant [Elio Motors] and the project [the Elio vehicle] will be evaluated to determine if they are eligible for the ATVMIP. This is the current step now, correct?
3. The proposed project will be evaluated, potential terms and conditions of a loan will be developed [$185 million, correct?] and a decision will be made whether to make a loan.
4. The negotiation and, if the negotiation is successful, the closing of the loan.

Also, "...the entire process will involve dialogue and exchange of information between the applicant and DOE in each step." Would be very interesting to know how long it takes the DoE to respond to EM as the dialogue moves along.

That sounds about right, Jeff. But it seems like 3 and 4 could be combined into one. Maybe that's what the media is doing.

 

[Jeff Porter]

You are correct. What EM has told us is that they are not accepting any more private investment money while ATVM loan process is underway. However everything else you mentioned should be continuing to move forward and indeed needs to continue moving forward so everything can be ready when the funding is secured.

Just a question, seems like an interesting path to explore... why would EM refuse any more private investment money while the ATVM loan process is underway? Why would more investment money be a bad thing at this time? I get that you've said that EM has a plan if the loan doesn't happen. In my feeble mind, seems like that plan would be easier to implement if more private investment money came in while waiting for the loan.

 

[RUCRAYZE]

EM can do everything right, -demonstrate a great product, show the benefits of a realistic 84mpg, fill out all the forms perfectly, submit it before due dates, show the positive impact it will make for job creation, enhance overall productivity, etc. etc., but just a few well placed bucks (oops p.c) lobbyists,
for the auto industry, home and/or abroad, and a few Senators from Michigan and the loan slides off the table. Currently, our government cannot agree to much- let alone release loan money for a private startup and the risk it presents. The thought of that solar company that got a loan (from whatever pot) and went under is a risk no politician wants to take at this tme