Very informative inside look. Thanks Ty.Warning - Opinion only -
I believe it won't fiscally cost Elio $346M to bring their Elios to production. I think it may take $346M if you count everything going on. That is, if you count every supplier's costs to start producing Elio parts and the price of the quantity of parts to get the Elio production line started.
If you are going to build a car on an assembly line, you can't just order, say, 100,000 gizmos and have them all delivered to the plant on day one. No. You need to order 100,000 gizmos - delivered as needed but never AFTER needed. There is a definite cost to doing that. Let's take Hyundai, for instance. They'll make seats for Elio but doing so means that they'll have to have a plan to produce seats at a rate slightly faster than Elio produces vehicles. That means they'll have to run their line just as fast. They'll have to have the personnel, parts, line capability, logistics, etc. required to do that. Before I worked at the GM plant, I worked at the Johnson Controls facility in Shreveport as an engineer balancing the seat assembly line that made the seats for the GM plant. That's ALL that plant produced. Anyway, I think Elio is counting the funds necessary to "prime the pump" when they give their $346M estimate. It's possible some of that will be taken on by suppliers who have excess capabilities. Quick example: Supplier making dash parts has excess capability on their production line. They could "reserve" that capability for Elio and then hire people as needed by increased Elio builds. There is a value to that capability and THAT value could be part of what Elio is planning for. It could be that the supplier doesn't need Elio to pay for that but could require Elio to pay for unused capability if they had another client who would try to buy that capability. I was wondering how much actual cash Elio would need to get started producing Elios. Hmm...