Why Does It Cost So Much...

3wheelin · May 26, 2017

Ty said:
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...

Very informative inside look. Thanks Ty.

Rob Croson · May 26, 2017

Ty said:
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.

EM already stated that nearly $100M of that money has already been committed by their suppliers as costs necessary to start up production of their parts. (I believe it was in the latest SEC filing.) For example, nearly $50M of that will be invested by Linamar to build the engine. EM listed three or four suppliers that have committed to the investment in manufacturing facilities to supply Elio parts, including Hyundai Dymos for the seats.

This is where the $100M increase in funding came from in the recent filing. In past filings EM did not include this amount. For some reason, they changed that for the most recent filing. It wasn't really an increase, just a different accounting method.

webartist · May 27, 2017

The posts here on costs has been interesting and appreciated. I had posted elsewhere essentially that I thought they had a beer pocket book and was trying to launch a champagne manufacturing facility. If they continually product thousands of Elio'ss after its initial reservations perhaps Ok, otherwise the plant will be to expensive and the work force will fall be far below 1500 employees.

I even question the 65+K reservations when the time comes to actual delivery. I recall a post the indicated about a third of the reservations I think (or would be) SIL holders like me (18013). I wonder what the ratio of the remaining reservation are? I would guess maybe about another 1/3 are lower deposit all in reservations and at lest 1/3 are refundable. I would expect most of the refundable will have long moved on by the time Elio's can be delivered. I was going to commute with my Elio, but I will be retired and it was just be a fun vehicle. I even think the progress in EV's are going to impact Elio sales.

webartist · May 27, 2017

I don't see much posted on the actual delivery and service for the Elio and how much its startup cost will be. The truth is I think at first there will be only a few fulfillment centers (like Atlanta for Ga.), no storefronts and they will do it all from fulfillment with options to ship or pick up your Elio. Who knows. An, hey, what about Pep Boys? Haven't heard a word about them anymore and their startup cost. You know, tech manuals, training technicians, etc.

Kuda · May 27, 2017

webartist said:
I don't see much posted on the actual delivery and service for the Elio and how much its startup cost will be. The truth is I think at first there will be only a few fulfillment centers (like Atlanta for Ga.), no storefronts and they will do it all from fulfillment with options to ship or pick up your Elio. Who knows. An, hey, what about Pep Boys? Haven't heard a word about them anymore and their startup cost. You know, tech manuals, training technicians, etc.

Being on the outside as we are, there is nothing we do or say that will affect the outcome to any large degree. Accepting
that reality isn't easy or fun especially if
one is 'all-in' & a 'stock holder'. (I can't
imagine how Stu feels & he's in the know).
Its always been about the money, no more so than now (evidence the furloughs) missed payments etc. Some hard decisions will
have to be made in the next 6 months, I reckon, if the Elio project is to move forward. Hold on tight it's going to be a bumpy ride!

webartist · May 28, 2017

Kuda said:
Being on the outside as we are, there is nothing we do or say that will affect the outcome to any large degree. Accepting
that reality isn't easy or fun especially if
one is 'all-in' & a 'stock holder'. (I can't
imagine how Stu feels & he's in the know).
Its always been about the money, no more so than now (evidence the furloughs) missed payments etc. Some hard decisions will
have to be made in the next 6 months, I reckon, if the Elio project is to move forward. Hold on tight it's going to be a bumpy ride!

You may be correct about not having much impact on standing on the outside but for me, I am asking EM the same questions and making the same suggestions. As it has been this year, I don't expect a response but at least the have heard fro a SIL.

Kuda said:
Being on the outside as we are, there is nothing we do or say that will affect the outcome to any large degree. Accepting
that reality isn't easy or fun especially if
one is 'all-in' & a 'stock holder'. (I can't
imagine how Stu feels & he's in the know).
Its always been about the money, no more so than now (evidence the furloughs) missed payments etc. Some hard decisions will
have to be made in the next 6 months, I reckon, if the Elio project is to move forward. Hold on tight it's going to be a bumpy ride!

You may be correct about not having much impact and standing on the outside but for me, I am asking EM the same questions and making the same suggestions. As it has been this year, I don't expect a response but at least they have heard from a SIL.

booboo · May 28, 2017

3wheelin said:
I hope you're right then everybody will be happy. And just to see EM succeed, I'm willing (my decision only) to pay more if they can deliver my ELIO! This is of course if they can deliver FIRST before EMV's SOLO as I can only pay for one 3wheeler!

The day we have to decide between either an EM or an EMV, that will be a nice day. Actually, Elio only would have to start production for this to become a decision, IMO. Once the Shreveport wheel starts turning, there will be no stopping it. At least for a long enough while for all 65,000 +++ more. I would guess a well received EM vehicle would actually be around for many many years, with variations down the road.
https://www.elioowners.com/threads/oddball-elio-ideas.896/page-18

Why Does It Cost So Much...

3wheelin

Elio Addict

Rob Croson

Elio Addict

webartist

Elio Aficionado

webartist

Elio Aficionado

Kuda

Elio Addict

webartist

Elio Aficionado

booboo

Elio Addict

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