1/15/2014 - Ksla - Elio Motors Announces Delay, Production Expected To Start In 2016

[creekstone]

I'm not so sure...

The ATVM loan program provides direct loans to automotive or component manufacturers for reequipping, expanding, or establishing manufacturing facilities in the United States that produce fuel-efficient advanced technology vehicles or qualifying components

Source: http://energy.gov/lpo/advanced-technology-vehicles-manufacturing-atvm-loan-program

BUT, I did see some reference to loan guarantees. So again, I'm not sure.

 

[creekstone]

To be eligible for an ATVM direct loan an applicant must:

1. Be an automotive manufacturer satisfying specified fuel economy requirements or a manufacturer of qualifying components.
2. Be financially viable without the receipt of additional federal funding for the proposed project.

Source: http://energy.gov/lpo/atvm-application-process

EM needs $240M. The requested ATVM loan is $185M. EM is probably seeking additional funds to satisfy eligibility requirement # 2. If so, until that is done, there is probably no ATVM loan.

 

[goofyone]

To be eligible for an ATVM direct loan an applicant must:

1. Be an automotive manufacturer satisfying specified fuel economy requirements or a manufacturer of qualifying components.
2. Be financially viable without the receipt of additional federal funding for the proposed project.

Source: http://energy.gov/lpo/atvm-application-process

EM needs $240M. The requested ATVM loan is $185M. EM is probably seeking additional funds to satisfy eligibility requirement # 2. If so, until that is done, there is probably no ATVM loan.

That is an incorrect interpretation of what the funding line means however it is easy to make as I have seen it many times and was unsure at first myself so I had to dig to research it.

According to the DOE guidelines for the ATVM loan "Financially viable" means simply that the company must present a business plan which is deemed by the DOE to have a 'reasonable' chance of paying back the loan. "Additional federal funding" means exactly what it says in that business financial plan cannot include any additional federal funding besides the ATVM loan.

3) APPLICANT FINANCIAL ELIGIBILITY [10 CFR 611.100(A)(2)]:
In order to be financially eligible under the ATVMLP, the applicant “must be financially viable without the receipt of additional federal funding for the proposed project”.

a) “Financially Viable”: The applicant will be deemed “financially viable” for purposes of 10 CFR 611.100(a)(2) if (i) there is a reasonable prospect that the applicant will be able to pay principal and interest as and when due under the ATVM loan and (ii) the applicant has a net present value that is positive, taking all costs, existing and future, into account. (See definition of “financially viable” in 10 CFR 611.2.) 10 CFR 611.100(c) sets forth a non-exhaustive list of the factors considered by the ATVMLP in determining whether the applicant is financially viable.

b) “Additional Federal Funding”: 10 CFR 611.100(d) lists forms of direct and indirect assistance from the federal government which would be considered “additional federal funding” for purposes of 10 CFR
611.100(a)(2).

http://energy.gov/sites/prod/files/...r-Applicants-Final-Version-October-5-2012.pdf

 

[creekstone]

I would think that in order to have a 'reasonable' chance of paying back the loan, EM needs to account for the full $240M needed to get to production. Perhaps their business plan adequately addresses that issue.

 

[goofyone]

I'll be the first to admit that I don't completely understand the program. But how is my interpretation (the need for additional funds to be eligible) wrong based on those two definitions?

While having more money on hand definitely can not hurt, as long as EM can show they can reasonably raise the rest of the capital they really do not have to find any more actual money to qualify for the ATVM loan as they can 'reasonably' prove this in other ways such as the expected value of the equipment.
The only reason why I make this distinction is that the loan was applied for back in August which was before the recent revelation of being tight on funding.

 

[eddie66]

This is a good question and frankly this has not been made very clear. After the town hall the way I understand it is that $65 million is what EM has spent, and/or has on hand, out of a total of $240 million needed to complete the project.

Heard the same thing in several TV broadcasts. Elio is $240,000,000 short, in addition to what he already has.

http://www.ksla.com/story/27863047/...tion-expected-to-start-in-2016?autostart=true

http://www.ksla.com/video?clipId=11039268&autostart=true

 

[JEBar]

While having more money on hand definitely can not hurt, as long as EM can show they can reasonably raise the rest of the capital they really do not have to find any more actual money to qualify for the ATVM loan as they can 'reasonably' prove this in other ways such as the expected value of the equipment.
The only reason why I make this distinction is that the loan was applied for back in August which was before the recent revelation of being tight on funding.

this would seem to be the place where 40,000+ reservations could come in handy .... 40,000 reservations X $6,800 = $272 million

 

[creekstone]

Goofy, we had a bit of a disconnect while we both edited our posts.

I believe we are saying the same thing: the submitted business plan must satisfy the eligibility requirement (additional funds, be it investors or equipment sales) before the loan is granted.

 

[goofyone]

Goofy, we had a bit of a disconnect while we both edited our posts.

I believe we are saying the same thing: the submitted business plan must satisfy the eligibility requirement (additional funds, be it investors or equipment sales) before the loan is granted.

I think so also. It happens.

 

[goofyone]

Heard the same thing in several TV broadcasts. Elio is $240,000,000 short, in addition to what he already has.

http://www.ksla.com/story/27863047/...tion-expected-to-start-in-2016?autostart=true

http://www.ksla.com/video?clipId=11039268&autostart=true

This is exactly why I wrote it has not been clear and wrote that it was the way I understood it after the town hall. I would like to see more video of Paul Elio, or another EM person, discussing that number directly as the news videos do not show this.