The Bottom Line

[RUCRAYZE]

We know the retail price point EM is striving to hit, but I was wondering, (and hopefully those folks in the industry) can estimate how much it will actually cost EM to build the base car.

We know the first 10k or so will each be receiving a $500 credit does that translate to financial loss for those units?, and too the lesser credits for all others with all in(s).

Will it be profitable to produce the first year's production?, Is it like retail businesses that sell loss leaders to get folks in the door?., or the hope of selling enough accessories to at least break-even??

 

[evboy]

i dont know what it costs but they could always say the 500 has to be used towards options which could lessen the blow.

 

[RUCRAYZE]

i dont know what it costs but they could always say the 500 has to be used towards options which could lessen the blow.

Yep! it does make perfect sense

 

[goofyone]

I will have to find the exact numbers later, as I really should be working now , but Elio Motors actually broke it down for Caddo Parish. EM has roughly $1K in profit and another $1K in other business expenses and warranty insurance built into the retail base price. This means that the estimated cost would be under $5K to build the vehicle including materials, labor, and assembly plant overhead however this is at a full production rate.

During the first year EM will be running at reduced efficiency levels and giving incentives so they are likely breaking even or losing slightly on the base vehicle in getting this vehicle to reservation holders but of course they are doing this because tens of thousands of these vehicles rolling off the assembly line and down a street near you is great marketing for an all new vehicle company.

 

[Jay3wheel]

Let's see if we lose money on every vehicle we can make it up in volume!
I love accounting!

(Z... this is a joke)

 

[outsydthebox]

We know the retail price point EM is striving to hit, but I was wondering, (and hopefully those folks in the industry) can estimate how much it will actually cost EM to build the base car.

We know the first 10k or so will each be receiving a $500 credit does that translate to financial loss for those units?, and too the lesser credits for all others with all in(s).


Will it be profitable to produce the first year's production?, Is it like retail businesses that sell loss leaders to get folks in the door?., or the hope of selling enough accessories to at least break-even??

IIRC, At the price of $6,800, they would make $2,000 per unit. Last I heard, (based on cost of materials) To maintain that margin, they should sell for $7,300. They are doing whatever they can to keep production costs low. I think they will still sell the first year production at the stated "$6,800". EM has also been taking lessons from Tesla. Rumor has it, that Tesla makes $0 profit per unit. They make their profit from "cafe' credits." Legal precedent has been established to qualify EM to also receive these credits, just a few loopholes to jump through.

 

[CompTrex]

They make their profit from "cafe' credits." Legal precedent has been established to qualify EM to also receive these credits, just a few loopholes to jump through.

Yeah, like getting motorcycles eligible for CAFE credits. That's a BIG loophole!

 

[Jay3wheel]

One reason they can offer us our discount or bonus, if you will, is the fact that these first production cars (pre-orders), will not have to contribute to the cost of operating the retail outlets. The cost (rent, salaries, demo cars, insurance, utilities etc.)of these outlets will be a factor in later production cars. That might be more than the $500 they are offering us. Maybe we should unionize and ask for a raise.

 

[zelio]

Let's see if we lose money on every vehicle we can make it up in volume!
I love accounting!

(Z... this is a joke)

Well, Jay3wheel, does that mean you do or don't love accounting. I used to love to do my taxes every year. Now I am grateful I don't have a high enough income to bother. Numbers are fun but then I also loved a statistics class I took back in 1983 or there abouts. What can I say, I am just weird! Z

 

[ecdriver711]

I thought most new businesses loss money the first year or two.