Securities And Exchange Commission Form 1-k - Filing Date: 2016-04-29

[floydv]

The odds have always been stacked against EM, though the fact they've kept moving forward despite the challenges is a good indication of corporate grit, unfortunately grit doesn't pay off creditors, though it might attract investors.

Elio Motors: Serving their house specialty -- Shrimp and Corporate Grits -- since 2008.

 

[Thomas Maule]

Aside from all the usual fun stuff to debate and argue with EM's SEC filings and what they indicate about the internal functioning of EM. Right off the bat in this new filing, I'm wondering if I'm reading this correctly, that the current projected retail price of $7,600 and BOM cost target of $5,654 for a production run of 125,000 vehicles, would give them just under $2,000 profit on the base model. That's just under $250 million profit on 125k Elios, not too shabby. Or does this initial cost take into account the percentage off reservation holders will get?

Ok let the arguments begin whether EM would sell the vehicle to reservation holders for $6,800 MSRP, or in other words, if the retail price drops in the second or third year of production if they're able to sell 250,000 vehicles as they think they can.

http://pdf.secdatabase.com/1461/0001214659-16-011078.pdf

Too much fun with all the tidbits in this one.

Honestly, I would pay this price for my elio.... still worth it.

 

[bunchathrees]

I think John Painter's analysis is spot on. The low BOM cost and the clear consumer interest are the keys. There will be funding (hopefully ATVM) to move forward. Hell, even if Paul is replaced, the market is ripe for a ICE trike that gives the function of a car.

 

[John Painter]

Honestly, I would pay this price for my elio.... still worth it.

I think the point is.... we will.

We won't see $6,800 until EM can get to 250k units being sold.

 

[Ekh]

The odds have always been stacked against EM, though the fact they've kept moving forward despite the challenges is a good indication of corporate grit, unfortunately grit doesn't pay off creditors, though it might attract investors.

I agree, if the testing demonstrates the ultra high mileage needed, ATVM is a very good chance. I think EM's ability to pay back the loan, given reservations and what we know about BOM now, is positive. The risk is as it has always been, extremely high. But as we know with Tesla, crappy financials doesn't mean production won't happen. I do think, as you suggest, it's likely not that EMs financials are worse (heck they even got Racer Trust to extend their terms yet again), it's that the financial picture is becoming clearer. I've always wondered how in hell EM could do all this relatively on the cheap - even if they're only building a motorcycle. It will be interesting to see how thing go as they move into the testing, and, based on results, how EM pursues seeking more capital.

John, my only kvetch with your argument is that Paul Elio is not Elon Musk, with all those billions behind him, and a massive public presence that makes the world take him seriously. If WE were landing re-usable rockets on barges, I'm pretty sure Paul's public persona and credibility would be greatly enhanced!

 

[Ekh]

I think the point is.... we will.

We won't see $6,800 until EM can get to 250k units being sold.

We might, as SIL reservation holders.

 

[Sethodine]

I think the point is.... we will.

We won't see $6,800 until EM can get to 250k units being sold.

Aye, there's the rub. EM doesn't really have a choice, and I'm OK with that. Afterall, we all saw that asterisk* when we reserved. If my paying $7600-base means that EM is able to attract investors and get into production, then I'm OK with that outcome.

BUT, if the engineering results and real world proof-of-concept drive reservations into the 250k area, then we just might get that $6800 base price after-all!

 

[Ekh]

"Aye, there's the rub. EM doesn't really have a choice, and I'm OK with that. Afterall, we all saw that asterisk* when we reserved. If my paying $7600-base means that EM is able to attract investors and get into production, then I'm OK with that outcome.

BUT, if the engineering results and real world proof-of-concept drive reservations into the 250k area, then we just might get that $6800 base price after-all!"

Dreamer! but I like it!

 

[John Painter]

We might, as SIL reservation holders.

That's what I'm thinking too. It will be interesting to see if at some point they actually do stop taking reservations and whether there is a price jump.

 

[Ekh]

That's what I'm thinking too. It will be interesting to see if at some point they actually do stop taking reservations and whether there is a price jump.

That will be a tough choice for EM -- they have built their entire identity on $6800 / 84 mpg. They've been "softening" that for a year (some might call it weasel-wording), but haven't backed away from t entirely.

I think that rather than give up on $6800, they will add "options" that are really necessities at inflated prices -- e.g., automatic tranny. Industry wide there's about a 2-4% "take rate" on standard transmissions -- due to a variety of factors including never teaching 2 generations of drivers to use the things. So if in essence 95% of EM's potential market NEEDS an automatic transmission, that might be where EM can make up the $800 bucks they're short in today's base price. Of course the price they'll pay for doing that is make the car less affordable to the people who constitute a major market for the vehicle -- the "clunker" market.

Other options -- windshield washer. Hood release. Gas-strut to hold the trunk lid up. Interior light. All these, except for the windshield washer, are in today's base price -- i don't know the current status of the windshield washer. But since they aren't called out as specifically included, they could easily wind up as extra-cost "options," to the annoyance of many. If all that stuff added up to $100, it would make a difference to EM, but less of one to the individual customers.

What do you think of this line of reasoning?