Why Hasn't The Elio Been Built Yet?

[Kuda]

Where is this information coming from? The mule has a geo powertrain. The IAV engine is a clean sheet design that is very conventional.

I take conventional to mean domestic sourced (shelf) components, then it's a matter of assembly which follows the model
for the rest of the Elio. From what I've read the transmissions (sourced) are in the final stage of approval & then the drive line will be set......

 

[jtmarten]

I would be very surprised if the profit is $1000 per vehicle. Margin is probably much thinner. Also, there is a difference between debt and equity. Debt has to be paid back; equity gets dividends (if any) or profits on resale. You have to factor in the costs of raising the money, debt service, overhead, etc.

The margin may be <$1000 for the first couple years, but, options are where they'll make bank. After the first year or two, they'll be able to increase pricing to increase their margin. Plus, as they produce more cars, the component cost per unit may have a negotiated decrease, also increasing profit. Also as the production numbers increase, they can add automation to previous labor intensive tasks, again increasing profits.

 

[DBN477]

Hey DBN477,
Someone really has to be right don't they. But; lets see...
Yes there are seversl cars out there that are basically the same car. Dodge Charger/Plymouth Satellite, Honda Passport/Isuzu Rodeo, and we could go on for days.
Yes, we also know that some manufacturers use others engines/transmission, etc.
From my understanding of what I've read, most the little nit-noid parts are supposed to be right off the shelf:

Brake Components (Master Brake cylinder, wheel cylinders, pads, rotors, drums)
Steering Components (power steering pump, hoses, assembly)
Electrical Components (alternator, fuse box, wiring)
A/C Components (evaporator, drier, compressor, condensorer, orifice tube)
Analog guages, Comfort Controls, blah, blah, blah. We could name parts all day.​

To say that a few body parts, engine, and a few others doesn't mean he hasn't done his homework and coordinated a large amount of parts to bring this vehicle together is ridiculous.
You also have to realize that part of the rational for producing his own parts is to keep down the cost and get the MPG he antisipates getting. Sure he could buy a 6,000 3 cylinder from Ford, but there goes your price point.
I'm really not sure what point were arguing over. You said Henry Ford only argued about the patent, and I said he also made the assembly line which made it possible for the masses to afford a car. I'm sure googling what Henry Ford did is easier that arguing about it, you be the judge.

​

Do you remember your original point? Here it is "
Mr. Elio has made his mark by utilizing already produced parts (except maybe a few) and bringing them together, eliminating the need for producing your own propriatary parts. I don't know why this hasn't been done with cars already. How many companies make a 4 cylinder engine for example? I imagine there are problably 20 or more. " And what did I do? I pointed that very few of the major parts are off the shelf. Chassis not off the shelf, body panels, fenders, engine, transmission, lights, wiring harness. These are more than a "few." And because I pointed that out, you had a problem with that. Major parts cost money to develop. Like that engine you mentioned. Elio would not need to pay for expensive certification tests if they used one already in production. Elio could use their negotiating skills to get a good price on the engine..............I never said Henry Ford "only" argued the patent of the automobile. Your making things up...........you ask why this hasn't been done (utilizing already produced parts). I guess you never heard of AMC (American Motors Corporation), but was really known as All Makes Combined. They used "off the shelf" Ford and GM parts in their vehicles.

So is Elio paying IAV to develop/modify/upgrade an engine? Manufacturing engine for Elio's? Sounds expensive.

 

[goofyone]

Do you remember your original point? Here it is "
Mr. Elio has made his mark by utilizing already produced parts (except maybe a few) and bringing them together, eliminating the need for producing your own propriatary parts. I don't know why this hasn't been done with cars already. How many companies make a 4 cylinder engine for example? I imagine there are problably 20 or more. " And what did I do? I pointed that very few of the major parts are off the shelf. Chassis not off the shelf, body panels, fenders, engine, transmission, lights, wiring harness. These are more than a "few." And because I pointed that out, you had a problem with that. Major parts cost money to develop. Like that engine you mentioned. Elio would not need to pay for expensive certification tests if they used one already in production. Elio could use their negotiating skills to get a good price on the engine..............I never said Henry Ford "only" argued the patent of the automobile. Your making things up...........you ask why this hasn't been done (utilizing already produced parts). I guess you never heard of AMC (American Motors Corporation), but was really known as All Makes Combined. They used "off the shelf" Ford and GM parts in their vehicles.

So is Elio paying IAV to develop/modify/upgrade an engine? Manufacturing engine for Elio's? Sounds expensive.

Designing and building an engine is expensive but so is buying 100,000-250,000 engines each year from someone else who is also making a profit from selling you those engines. At that scale it likely makes sense to produce your own engine because Elio would get the exact engine they need and at those volume levels it would likely cost the same or less to build it themselves. EM would also run into a number of issues trying to source that many engines from someone else. EM would need to find a company with the right engine at the right price but that source would also have to have enough guaranteed extra production capacity to meet Elio's demand. That is a lot of excess capacity just sitting around unused and I doubt many companies would have it available let alone be willing to sign a contract making it available to Elio Motors. Another issue is that to guarantee that production capacity Elio would be forced to put a lot of money down up front as well as sign contracts guaranteeing a minimum purchase amount for several years which would be very hard for them to do.
While it is common for auto companies to use each others engines they actually rarely just purchase them from other manufactures. Generally this is done through joint ownerships of production facilities and/or investments with ownership interest in another manufacturer.

 

[DBN477]

It's seems like your dismissing the cost of developing an engine, certifying an engine, none of that is cheap. Not one company be it motorcycle or automobile, does not have excess capacity that would not jump at the chance to sell engines to Elio? Finding the right deal, isn't that what they did with plant.

No one, no one, no one knows how many Elio's will be made. So why develop your own engine? Let's see how things pan out after 12-18 months. Then decide to build your own engines or have them supplied. Deals are negotiated all the time. Your dealing with the same issues funding or lack of funding. How much money did Elio have to put down/secure for plant?

BMW in the Mini used Chrysler engines the first years of production. And at that time Chrysler was owned by Daimler, a competitor to BMW. It worked for them. After Chrysler, they went with PSA (Peugeot Citroen) engines.

 

[goofyone]

It's seems like your dismissing the cost of developing an engine, certifying an engine, none of that is cheap. Not one company be it motorcycle or automobile, does not have excess capacity that would not jump at the chance to sell engines to Elio?

BMW in the Mini used Chrysler engines the first years of production. And at that time Chrysler was owned by Daimler, a competitor to BMW. It worked for them. After Chrysler, they went with PSA (Peugeot Citroen) engines.

Your example actually proves my point. Both the Mini engines you mentioned were not actually purchased but produced as part of joint ventures where both companies actually worked together to develop and/or manufacture the engines.

http://en.wikipedia.org/wiki/Tritec_engine
http://en.wikipedia.org/wiki/Prince_engine

Bringing a new engine to market is not a trivial matter however sourcing an engine that meets Elio's requirements for cost, power, weight, and production volume is also not easy.
I have to think Paul and his bunch looked into sourcing an engine before committing to the plan to build their own and discovered many of the same issues I noted, and likely a few more I have not thought of yet.
By the way I also started out wondering why EM would want to build their own engines as I thought it would be too expensive but after researching and thinking about it more I came to the conclusion that the issue was not as easy as it seemed on the surface.

 

[DBN477]

Your example actually proves my point. Both the Mini engines you mentioned were not actually purchased but produced as part of joint ventures where both companies actually worked together to develop and/or manufacture the engines.

http://en.wikipedia.org/wiki/Tritec_engine
http://en.wikipedia.org/wiki/Prince_engine

Bringing a new engine to market is not a trivial matter however sourcing an engine that meets Elio's requirements for cost, power, weight, and production volume is also not easy.
I have to think Paul and his bunch looked into sourcing an engine before committing to the plan to build their own and discovered many of the same issues I noted, and likely a few more I have not thought of yet.
By the way I also started out wondering why EM would want to build their own engines as I thought it would be too expensive but after thinking about it more and researching it more I came to the conclusion that the issue was not as easy as it seemed on the surface.

So then you proved my point, Elio can't do it alone developing and engine. They need a joint venture. If the big boys can't do it, (without a joint venture) what makes Elio think they can? BTW Elio isn't doing it, German company IAV is developing what? A modified GEO engine, so if that's the case(GEO engine), aren't they paying royalties to someone for using their design?

 

[goofyone]

So then you proved my point, Elio can't do it alone developing and engine. They need a joint venture.

Why would they not be able to do it alone? Of course it would be nicer if they could share costs with another manufacturer however that does not preclude them from being able to do it themselves. IAV has a proven history of designing and certifying engines and Elio can easily work with suppliers to set up a production facility to build it.

 

[BlioKart]

IAV is a contractor to Elio. So its not a joint venture. Only Elio will be using said finished engine.

joint venture is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.

One of my favorite joint engine builds PRV 06 engine used by Peugeot Renault Volvo and Delorean

 

[DBN477]

Why would they not be able to do it alone? Of course it would be nicer if they could share costs with another manufacturer however that does not preclude them from being able to do it themselves. IAV has a proven history of designing and certifying engines and Elio can easily work with suppliers to set up a production facility to build it.

probably because of this statement, and it cannot be stressed enough.
[quote="goofyone, post: 10421, member: 531"Bringing a new engine to market is not a trivial matter however sourcing an engine that meets Elio's requirements for cost, power, weight, and production volume is also not easy.[/quote] IAV works with oem's what is Elio contributing? If IAV is doing ALL the engineering, that costs a significant amount of money, so what is Elio contributing to engine? Specs and a blank check?

Why are you so certain 100 -250k Elio's will be sold a year?

The Smart has a 1.0l 3 cylinder, already certified. Sales are far below expectations. Let Elio put their negotiating skills to the test. Negotiate right to use design.