At What Point

[tonyspumoni]

$6800 is not a final price but instead a target and EM has openly stated that if they had to set the price right now it would be about $7300. The last we heard they are looking for $1K margin and the estimated cost of actually producing this vehicle is about $5.5K. The remainder of the money would account for liability, marketing, and retail operations.

EM has actually discussed the possibility of CAFE credits and they are supposed to be working on this angle as this could potentially provide for more profit per vehicle than the margin they already have in the base model. Use for forum search function to find more information on this as this information originally leaked out via meeting notes from the Caddo Parish Commission which is where the plant is located.

Excellent info and advice.

 

[tonyspumoni]

Taking that advice and typing "CAFE" into the search feature yielded quite a number of hits, none of which seemed to provide anything other than "sure, they might try this". Got a lead on anything more substantial?

As I understand CAFE, CAFE only applies to light duty cars and trucks meaning that, by definition, the Elio is not subject to CAFE. If this were not the case, Yamaha would be selling motorcycle credits to Ford. Tesla can sell credits because it is a car. So for this to be reality Paul et al. would need to have either the EPA rules altered or those governing the definition of car versus motorcycle. I'd be much less sanguinary of Elio hitting production phase if indeed their business model depends in the slightest on access to CAFE credit markets, as I am dubious that Elio has the political clout to keep this trike a trike when it suits him and a car when that suits him too.

For my part I hope this stays a 'motorcycle' as it lets me use the HOV lanes as a single driver.

 

[goofyone]

Taking that advice and typing "CAFE" into the search feature yielded quite a number of hits, none of which seemed to provide anything other than "sure, they might try this". Got a lead on anything more substantial?

As I understand CAFE, CAFE only applies to light duty cars and trucks meaning that, by definition, the Elio is not subject to CAFE. If this were not the case, Yamaha would be selling motorcycle credits to Ford. Tesla can sell credits because it is a car. So for this to be reality Paul et al. would need to have either the EPA rules altered or those governing the definition of car versus motorcycle. I'd be much less sanguinary of Elio hitting production phase if indeed their business model depends in the slightest on access to CAFE credit markets, as I am dubious that Elio has the political clout to keep this trike a trike when it suits him and a car when that suits him too.

For my part I hope this stays a 'motorcycle' as it lets me use the HOV lanes as a single driver.

I was able to find the thread:

http://www.elioowners.com/threads/caddo-parish-commission-may-20th-2014-meeting-minutes.1537/

For many reasons Elio Motors does not wish to officially change its NHTSA designation to a car but instead change the CAFE regulations to allow auto-cycle type vehicles to be counted towards CAFE standards. EM does not need to have the clout to pull this off as it's the large automakers who wish to buy the credits who do have clout and also would want to see this change enacted.

The CAFE credits are only one of several approaches Elio Motors is trying in parallel to get this project across the finish line and their business model is not dependent on them but instead on efficient production, distribution, and sales.

 

[tonyspumoni]

Much obliged Goofyone. I had a feeling you'd be able to point me in the right direction. So much easier than scrolling through a zillion iffa-couldda-wouldda posts.

And you a very good point about 'push' being a bidirectional possibility, e.g. the Big automakers pushing to get Elio CAFE certified as it would be as much to their advantage to do so as to Elio's. Well done.

 

[goofyone]

Much obliged Goofyone. I had a feeling you'd be able to point me in the right direction. So much easier than scrolling through a zillion iffa-couldda-wouldda posts.

And you a very good point about 'push' being a bidirectional possibility, e.g. the Big automakers pushing to get Elio CAFE certified as it would be as much to their advantage to do so as to Elio's. Well done.

You appear to be interested in this sort of thing so you may enjoy reading the information below. The highly efficient model EM is trying to implement is not an unproven concept but actually based on something that GM Brazil has been doing successfully since 2000.

GM has experimented with an interesting sales/manufacturing/delivery model outside the states:

Since 2000, customers in Brazil can order the Celta over the internet from a site that links them with GM's assembly plant and 470 dealers nationwide. By 2006, 700,000 Celtas had been produced and the car continues to be one of Brazil's best sellers. Consumers have 20 "build-combinations" from which to configure a model of their choice, including colors and accessories, and can view each change as it is being made. GM built five distribution centers throughout Brazil to reduce transportation time from its assembly plant and buyers can track location of their car online on its way to delivery at a dealer of their choice. The time from configuration at the factory to delivery is only about a week, in contrast to the several week wait that can be common in ordering a car in the United States. The Celta was designed by GM in collaboration with suppliers who deliver just-in-time pre-assembled modules to the factory. GM estimates that collaboration in design and manufacturing enabled it to use 60 percent fewer suppliers and 50 percent fewer parts than in a traditional assembly operation. According to Mark Hogan, president of e-GM at the time of the Celta's introduction, GM can sell Celtas 24 hours a day and enjoys a competitive advantage from reduced production time, lower inventory levels and an overall more efficient distribution and sales model where dealers need to stock only two models, one for the show room and one for test drives. Consumers benefit from Celta's online no-haggle pricing structure, where prices are about 6 percent lower than for sales made through conventional distribution channels. The price is lower because GM passes on to consumers some of the tax benefits it gets from the Brazilian government as a result of the reduced inventory and real estate associated with online sales.

Source: Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers
http://www.justice.gov/atr/public/eag/246374.htm

 

[jetpack54]

Paul Elio is an engineer. Those numbers are his design criteria(84MPG,6800$,5*), if he doesn't meet them he will not have been successful in his own mind. Also he has taken this "in hand" and is going to follow the plan and engineering/fincianial models used to get this far. An engineer does not willingly comply with the "bean counters" who will want to price it to "what the market will bear". Again ,he will follow the "program", which will definately include price increases as dictated by content and inflation. He has a profit margin in mind and pricing will be driven by that number. On MPG, weight,CD,engine design are the primary players. All a part of the design, 55HP in a sub 1500 pound car with good areo will do it. Now that isn't to say everyone will get thatMPG, depends on your conditions and how you drive it. I always get rated MPG or better and I do not do the hypermile thing, just smooth ,and aware driving. On the price, I can see that he may have to yield some to inflation over the development time. That being said I feel he will hold the base at 6800$ for the first year, options will "make it up". Mine will be a BASE car, that's what I want, simple and efficient. He will have met his personally established goals and the model ,I'm sure, allows for price corrections as production continues. That's my opinion, based on being an engineer with a major car company and the frustrations of dealing with "stupid wasteful C**P" every day!
Crash testing is a pointless undertaking to me, get hit by a full size pickup and your toast. That is the same for any small car. The requirements to make a 5* rating are known and can be incorporated into the design. I drive my full size truck as if it were a motorcycle and taught my kids the same way, do not depend on hardware to protect you. I'll drive the Elio like my K75 and be a happy camper regardless of the "gov safety rating", but I know he will achive it. I bet it already has in computer simulation, many times during the design evoloution. Sorry about the spelling ,as I said I'm an engineer and this doesn't have spell check appearently.

Don't worry 'bout the spelling...I agree with your opinion!

 

[tonyspumoni]

Goofyone,

That is indeed a fascinating read. Dunno where you come up with this but happy to be the beneficiary. And yes, I find this aspect of the whole Elio Experience at least as fascinating as I do the prospects of actually owning an Elio, so by all means keep posting whatever you find - you'll have at least one interested reader. My wife puts companies together and I'm no stranger to this side of the business world myself, and thus I have in addition to a personal interest a professional one as well. Kind of like a brain surgeon watching a heart guy do his stuff.

And having watched several businesses get put together, both angel and VC, I can say that this one has a ring of truth to it. First, Paul has never come off as someone who likes to fail, nor as a rube. So I have zero doubts regarding the integrity of his vision and purpose. He also seems to be able to exert excellent control of his board - no loose cannons mixing the message with this team - everything has been very 'on message' and coordinated. Unity of vision, cohesiveness of purpose, track record of success, and the quality of the board membership all bode well for this being a real effort and not some sort of wish-think. I keep seeing the words "scam" and "Elio" mixed in the webpress, but this is just self-aggrandizing semi-journalism and sunday-punditry rather than deliberate thoughtfulness.

I have never been terribly thrilled with the way cars are sold in the U.S. In Europe there are "dealers" but these are manufacturer storefronts insofar as I can tell. In Germany, where I lived for awhile, and Switzerland, where I work a bit (my company is a Swiss company), if you want a car you pay the sticker price - no haggling. Very much more in line with what Elio is planning.