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

[tonyspumoni]

Dan,

I agree with all of that. I think we don't have enough words in our language to describe all the meanings of the word 'greed'. In this context it doesn't meet the 'mine-all-mine' kind of greed, but the simple desire to make money. I too hold the view that the investors are also contributing because, unlike other places they could invest, this vehicle has the added potential benefit to do the world a great deal of good. But this is the cart, not the horse and while both making money and doing good are powerful incentives, the fear of losing money is more powerful still. Any number of studies have shown that the buzz we get from getting a dollar is far outweighed by the anti-buzz we get from having one taken away.

Given the short timeline to meet their very clearly articulated objectives (Q3, 2015 deliveries), the ATVM loan cannot be gating for production. If so and it drags, they will look like utter fools now and that's losing a dollar (or more). Further buttressing these views are the fact that of the major statements Paul has made, he has equivocated on none of them recently, despite all the strum and drang about the ATVM loan. If faced with peril, he would have to budge on something, right? One option would be to adhere rigidly to design goals, but raise the retail price. Another would be to delay production, but maintain the other metrics. A third would be to get into production but miss his mpg, 0-60, safety, or other targets. Since he has steadfastly maintained that they will get into production with the exact vehicle in Q3, 2015, I feel very confident that the ATVM loan is not gating for those aspects, including initial production goals. What it does for them I haven't exactly figured out. Maybe given them leverage for 2016 production goals, which is plausible if we hold the view that they have enough funds to make the first run of, say, 30k vehicles, but not enough to go further?

Thanks everyone for contributing to a terrific topic. I was 'all in' before, but feel much more confident that I will see my Elio around xmas next year or early in 2016.

 

[Ty]

Absolutely, Jeff - major understanding! I would only make one little tweak...

I'm going to assume that PE is the idea guy/prime mover with pockets not quite as deep as his other founding investors. I'm also willing to bet his founding investors haven't found the bottoms of their deeper pockets, yet <grin>

IF (big IF) the additional private investment money comes from those founding investors (assuming deeper pockets) and PE can't match their additional contributions, the founding investors would actually see an ownership increase while only PE could (would?) see ownership dilution.

So, I see the ATVM loan as the vehicle for the founding investors to keep more of their personal money off the table (reducing risk) and as PE's vehicle for avoiding dilution. Rather simple.

Greed? I don't think I'd label it that (though I do believe in Gordon Gekko's "greed is good" quote, just not his execution) - if EM is extremely successful, PE will end up with a boat-load of money. Who knows, maybe he'll also become extremely philanthropic with his newly minted fortune and no one will label him greedy. But this isn't a sure thing, yet, so he could just be preserving a larger piece of a potentially smaller pie. Time will tell - but I'm betting on extremely successful and extremely philanthropic based on all that PE has demonstrated through actions and deeds (not just words) to this point.

I would also add that the vast majority of the discussion in this thread is a perfect description of how money moves in the start-up world - a lot of smart/experienced folks have really contributed for the benefit of forum members. The game-changer here is the ATVM loan, accessible only to a small niche of companies, and granted only to an infinitesimally smaller favored few. That gives PE/Founding Investors/EM a low-risk funding path not available to most.

Well said. Ford and Nissan both have received money from the ATVM pot though... not exactly a niche thing.

 

[Smitty901]

Simple a 200 million dollar unsecured loan at low interest is a gift from heaven . Also what happens often is those getting these Government loans never repay them or are forgiven the interest charges down the road.
Google and is muilt-billion dollar partners are up to that right now on the solar scam project.
Not that I think ELIO is up to any scam. Why would you seek investors that rightfully will demand a good return on their risk and some say in how the company is run. When you can get unsecured money at a low rate and turn over no control. Clock is ticking pick one.
Investment is a gamble some risk are higher than others the higher the risk the greater the return if you made a good bet. Bond holders that bet on Detroit had some cover based in law but they just got burned when a Judge decided to ignore the law. So those bond holder risk turns into a huge loss for them. Based on what we know about ELIO at this point who would hand them 200 million as if it was a sure bet ? almost no one.
Pual ELIo and those involved with the company now are hedging their future betting they can make this work betting a lot of what they have on it most likely. Not many outside the dream would be willing to do so.
Those of us that laid out a 1000 dollar bet are not really at risk for much, 200 million a different game. Now if ELIO was in a corner and offer me 4 % to invest a couple thousand unsecured and with no say in the company , I would only because I support his gamble and a couple 1000 lost would not be the biggest gamble I ever lost.

 

[tonyspumoni]

The only fly in that ointment Smitty901 - and I think we agree in principal that they don't need the ATVM to hit in order to meet their stated production timeline - is that DOE demands first lien on assets purchased with the loan proceeds. In other words, EM cannot just take the $185 and re-pay investors or they would have to wait to do so until they had $185M of unencumbered assets they could pledge.

Don't get me wrong - the ATVM loan remains a terrific play - particularly in that it could let them buy forward all the raw materials they need to make Elios. Those goods are all assets and would satisfy DOE requirements and getting their supply chain in place for jumping production from, say, 5,000 per month to, say, 15,000 per month will take bucks. Being able to do that with solid, ATVM money would sure make it easier than having to do so from continuing operations. This would be particularly true if it transpired that the first produced vehicles could not be made at a hefty profit.

 

[Smitty901]

We can bet suppliers will not extend very much if any credit to ELIO for some time. If ELIO needs to lease equipment they will pay top dollar at this point and be in a weak position setting up terms. I am betting the per unit profit on ELIO will be low compared to any industry standard for some time to come.
I know it is a different loan program but looking at the scam Google is running right now on the solar project is crime IMO.

 

[Elio Amazed]

If I were PE, I would have established a certain sized piece of pie for myself and would have held my ground on it.
The rest would have been up for grabs for both active and passive participants/contributors/investors.
Before they commited in the "first round", the "investment holders" had to have known that:
This was to be a process in which they would be called upon to release (according to individual agreements) additional monies as needed.
I would imagine that there would be negotiation between the group and the individuals at each "round" of investment.
Hence the "milestone triggers" (my words) that PE has alluded to.

Investors usually invest not to "be repaid" as in a loan, but rather to be "paid".
To beneifit in a continuous, ongoing manner.
It's the gift, as we say, that "keeps on giving".
A good investment is usually one that keeps on growing".
Here's to investment. Here's to all of the investors including us.
For we are investing and putting at risk a significant amount for most of us.
Here's to the benefits of our Elios, the future reward for our investment and risk.
May those gifts keep on giving and continue to benefit us for years to come.

 

[zelio]

Exactly Tony.
I sincerely thank Z for finding and posting this.
I was totally unaware that this was said way back then.

To quote the quote that Z quoted, "Our overall strategy takes us well through year one of production..."
Let's look at that again.
That was, "Our overall strategy", and not "The funding that we already know for a 100% certainty that we will have access to..."
We have to really be careful how we read these releases and what we choose to read into them.
They are, after all, composed and written with great attention and care given to the selection of details and semantics.
One result of their being so continuously vague is that each of us can take what they do say to mean whatever we wish it to mean.
That is exactly according to plan and is public relations, promotion, and the turning of a phrase at it's most masterful.
I, for one, am pleased beyond words that we have this kind of talent at the helm.
If you look back, this has been a pattern through the whole campaign.

I don't think EM wants to crystal clearly and completely imply that they "don neeed no stinking loans man".
That might just lead the feds into thinking, "Then, really, why should we give these guys a loan?"
But, on the other hand, the public needs to believe EM has plans upon plans to insure that it won't let the public down.
Tony, I thnk you knew and stated the answer to that a few threads ago.
The more it looks like a sure payback, the more it looks like things will not turn out like the last two DOE loan disasters.
And the better the chance are that 'America will realize just how many heroic geniuses have been hidden away at the DOE all this time'.

I see a similar situation in Saddam's telling the world that he had WMDs because he was afraid of Iran.
Unfortunately for him, he couldn't trust the U.S. enough to secretly whisper to our government that he, in fact, did not have any WMDs.
EM seems pretty unified in everything they're doing and in the course they've plotted for the near future.
I just believe that they're having to serve at least two masters and they need to walk a line between them for now.

Another aspect of EM's being vague is that it's good to keep us wondering and on the edge of our collective seats.
How do I keep people tuned in to my station and talking about my program so that my fame will spread throughout the land?
Serial Westerns and Mysteries, Soap Operas, "Reality Shows", and Talk Shows. Got to keep it stirred up a little out here.
Some information must be given away when it becomes necessary, but you seldom give more away than you have to.

And, of course, there's that real thing about the investors' collective desire for privacy at this point in time.

Brilliant. THAT'S why I have faith. THAT'S why I'm "All in".
For as much as I'm all in for the money and the car itself...
I'm in it for the identity and the belonging to something greater than myself.
I'm in it for the unique experience, the history, and the entertainment.

You simply cannot put a price on this kind of entertainment. Sitting back and watching it aaaaall happen.

There is a good reason we were unaware of this until now. It showed up this week when the EM website was updated. It is under the Support Tab and I happened to stumble across it while browsing all the information in the tab. The amount of information there is amazing. Some of it is things we alread know but this was not one of them. I was unaware of the date this was written until I tried to copy it and it came up in the form this was pasted as with a date on it. :-) Z

 

[zelio]

If I were PE, I would have established a certain sized piece of pie for myself and would have held my ground on it.
The rest would have been up for grabs for both active and passive participants/contributors/investors.
Before they commited in the "first round", the "investment holders" had to have known that:
This was to be a prgressive and a continuing investment process in which...
They would be possibly called upon to release (according to their individual agreements) needed additional monies as the project progressed.
Hence the "milestone triggers" (my words) that PE has alluded to.

Investors usually invest not to "be repaid" as in a loan, but rather to be "paid".
To beneifit in a continuous, ongoing manner.
It's the gift, as we say, that "keeps on giving".
In investments, it's usually, "The investment that keeps on growing".
Here's to instment. Here's to all of the investors including us.
For we are investing and putting at risk a significant amount for most of us.
Here's to the benefits of our Elios, the reward and future continuous for our risk.
May those gifts keep on giving and continue to benefit us for years to come.

If I remember correctly, and it has been 11 months since I read a lot of informaiton about EM, these investors have been in from the beginning. They were listed in the minutes of a meeting in Michigan (Pontiac I believe?) concerning a plant they were trying to get at that time. Personally, I am very glad they did not get that plant because I have followed the growth and progress of EM and the Elio and love the changes that have occurred. We are getting a better Elio and a stronger EM. Wonderful. Z

 

[Elio Amazed]

We can bet suppliers will not extend very much if any credit to ELIO for some time. If ELIO needs to lease equipment they will pay top dollar at this point and be in a weak position setting up terms. I am betting the per unit profit on ELIO will be low compared to any industry standard for some time to come.
I know it is a different loan program but looking at the scam Google is running right now on the solar project is crime IMO.

I believe that the first year per unit profit was estimated in EM's pre-application budget projection.
It was modest and IMO may indeed end up being sinificantly lower than that.
They didn't seem like they left much room for unanticipated additional costs.
They have to come as close as they can to their projected price, even if they take a loss on the first batch of reserved units.
It's a matter of both public trust and the value of having a large number of units being seen on the streets every day.

 

[Smitty901]

Paul ELIO if you are listening Don't let this fail. While I am the farthest thing from a socialist in this world this may be a time for the people to get something done. If financing becomes an issue put out the call many of us may just become silent investors at a low amount adding up to what you need.
200 million is not really a lot of money in todays world. I am in for a couple 1000.