Waffling On Base Price. Can They Make $6,800?

[outsydthebox]

The thing is, I believe the Slingshot and the Elio are for two entirely separate markets. About the only thing they have in common is the number of wheels!

I agree! Polaris is building a "toy" for the adrenaline junkies and guys (mostly) who are willing to pay "whatever it takes" to aquire what they "want." I am pretty sure that the MSRP for the Slingshot was based (not on what it costs to manufacture, but) on "just how much can we charge without hurting sales numbers?"
Whereas, (some of) PE's reasons are, 1) Making a "positive" impact on fossil fuel consumption. 2) Create US jobs. 3) Make it "possible" for folks to "affordably & safely" GET to those jobs (mobility).
While it IS "reasonable" to ask..."why don't the numbers add up?".....The answer is,...."unless we are on the BOD, we don't have access to any numbers to add up."
As Ty mentioned, "timing" makes it possible. Acquiring the Shreveport facility, with all of the automation equipment, will be critical to EM's success.
What make it difficult?...in some ways, this is a benevolent endeavor in a capitalistic society. Just my 2 cents

 

[Ekh]

You guys keep talking. You're just giving EM a target of what people are willing to pay.

"Hey look, They're willing to pay $9,900. Why should we sell for $6,800?"

Two years ago I asked Jerome Vassallo why Elio wasn't pricing the car at $10K. He said they knew they could sell it for ten grand, no problem, but they were concerned to make the car available for people who really need it and can't afford ten thousand dollars. So they would fight like heck to make the $6800 price, but knew it might not be possible.

That position hasn't changed. Elio will make the car for as little as possible. Personally, I expect to pay about $8,000 for mine plus tax. Since I'm going to pick it up, I hope the delivery charge won't apply. (Because the car can't be sold in Ohio under current law).

 

[John Painter]

Two years ago I asked Jerome Vassallo why Elio wasn't pricing the car at $10K. He said they knew they could sell it for ten grand, no problem, but they were concerned to make the car available for people who really need it and can't afford ten thousand dollars. So they would fight like heck to make the $6800 price, but knew it might not be possible.

That position hasn't changed. Elio will make the car for as little as possible. Personally, I expect to pay about $8,000 for mine plus tax. Since I'm going to pick it up, I hope the delivery charge won't apply. (Because the car can't be sold in Ohio under current law).

Could you imagine if they lucked out, and got the Federal Code changed to include an autocycle class? That would open them up to selling CAFE credits, they could practically give Elio's away and still make a nice profit. I think it's a long shot personally, but see some real hard core strategizing in a very small company, working all the angles like they are. That is hopeful, because if EM makes it to production and gets some real money.... the sky's the limit.

 

[Trusting]

The thing is, I believe the Slingshot and the Elio are for two entirely separate markets. About the only thing they have in common is the number of wheels!

I saw one of those on the street a couple of weeks ago. You're right, a totally different animal. The Elio is practical and a value. The only positive feature I could see about the Slingshot was that it has tons of buffoon appeal....

 

[Ekh]

Could you imagine if they lucked out, and got the Federal Code changed to include an autocycle class? That would open them up to selling CAFE credits, they could practically give Elio's away and still make a nice profit. I think it's a long shot personally, but see some real hard core strategizing in a very small company, working all the angles like they are. That is hopeful, because if EM makes it to production and gets some real money.... the sky's the limit.

The thing is, the Big 3 aren't interested in making small cars. They ARE interested in getting their fleet averages up and meeting carbon footprint requirements. So if Elio is qualified for CAFE credits, the big 3 might very well HELP ELIO get the Autocycle legislation enacted and be thrilled to be able to buy all those credits. MUCH cheaper than investing in engineering, building, tooling, and selling new, very small cars. So instead of fearing Elio as competitors, EM becomes an asset -- a very valuable asset -- which they will support, But getting the autocycle legislation passed is an uphill battle -- just no energy to get it done. It's a sensible bill, no big bucks involved to make ti happen -- but it isn't awash with co sponsors.

 

[Smitty901]

If ELIO could get CAFE credits it would be in production without a doubt. Heck one of the big companies would back them just to get the CAFE credits. They would use them to off set their best selling production models. Even without CAFE credits there is another way ELIO would be used. A company can get way with producing cars with higher emission as long as they off set that with something like the Elio. They do that now with hybrids, and all electric cars they don't make a dime selling.
Chance of that unlikely. ELIO is not in the right crowd.
Except for fuel every cost of doing business has gone up since ELIO said $6,800 was a target price. The required health insurance has doubled and more . That alone will kick ELIO's tail. The taxes being dumped on business for no reason other than to funnel cash other places. Many companies now make their bottom line by reducing workers more than any other means.
I am not blaming ELIO. It is just a fact of life cost are going up and there is no sign they will come down. Gas is cheap now ,but that is not going to last. There are those calling for huge tax increase on fuel to force us to cut our use.
What the final price tag will be wild guess. It is not going to be as low cost as many had hoped.
2016 is almost here, another year of waiting . I sure hope to see that email asking for final payment this year. I will head down to the plant when I see it I will transfer the payment and drive it back.

 

[cantwait]

Per the Offering Circular, we are now looking at March 2017 as the earliest date to start production, and $7600 MSRP. Some people here may think that is pessimistic, others may think it optimistic, and others may think it is accurate.

In order to attract investors, the price will need to be high enough to be profitable. In order to attract customers, the price will need to be low enough to be affordable. What we still do not know is whether there is a price and volume where those two opposing forces happily meet.

There is no need to worry about discussing what our individual price cap is. Elio already knows that they will lose some customers as the price goes up, the same as any other business. If either Motel 6 ($6 per night) or Super 8 ($8 per night) had kept their original pricing, they would have gone out of business years ago. The assumption is that Elio will make an effort to keep their pricing low, but the market will wind up setting the price in the long run.

I don't think worrying about either the price or the production date accomplishes much at this point in time. Until we have a good solid look at the final pre-production models, or the actual production models, we really don't know whether an Elio would be overpriced at $6800, or a bargain at $10-12,000. IMHO, if the final model reliably meets all the advertised specs, they should be able to sell them for $7600 as fast as they can make them, for at least a year, probably more.

 

[outsydthebox]

.....Per the Offering Circular, we are now looking at March 2017 as the earliest date to start production, and $7600 MSRP.....

What "Offering Circular" are you referring to? Please post a link.

 

[slinches]

There's a link on the StartEngine site. Look for the "offering circular" link just below the "Reserve My Elio" button.

And it says that the start of production begins at 12 months and is a three month process to build up to the full production rate. The whole spool up process and the many Elios built during those 90 days will have been completed by the March 2017 date, assuming everything goes according to that schedule.

 

[cantwait]

For what it's worth, I consider "start of production" to mean "vehicles delivered to retail customers" or at least "vehicles available for delivery to retail customers", not "vehicles available for in-house testing" or "vehicles on publicity tour".

If you look at the chart on page 25 of the offering circular, it seems to indicate that production will be ongoing during months 13, 14 & 15. However, if you read the accompanying wording, it seems to indicate that production won't start until the 15th month.

We are in the process of refining our production plans with suppliers to start production in 15 months from the completion of this offering. The key milestones for the 15-month schedule are as follows (with E1, S1 and S2 referring to various vehicle prototype phases):

• S1 Builds and production validation – Month 13
• Initial 10 retail stores build out complete – Month 14
• S2 Builds & EPA/CARB certification complete – Month 14
• Start of Production – Month 15

The "production" scheduled for Month 13 & 14 refers to the S1 & S2 validation builds, not customer vehicles. What is still unclear is whether the offering will be "completed" on December 31, 2015, on March 31, 2016, or on some date in between. I would assume that Elio would be able to start withdrawing funds from escrow after December 31 (if they meet the 50% minimum), regardless of whether they decide to keep the offer open until they either sell all the available stock or run out of time. Therefore, it seems reasonable to me to assume that the 15-month prototype-to-production plan would start on January 1, 2016.

Note: The "Offering Circular" is the same thing as the "SEC Reg A+ filing", with only a few minor exceptions, mostly formatting. This is the disclosure that was to be read before investing in the stock offering.