$7300 Final Price

[Marshall]

So it looks like EM and the ATVM folks have been discussing EM's application. And EM seems to have gotten the impression that full binding commitments at $7000 will satisfy the requirement that the applicant demonstrate the ability to pay back the ATVM loan.

But 65,000 X $1500 (I think this was the projected profit per vehicle) = $97,500,000. The loan application was for $185M. So where is the remaining $87,500,000 coming from? I wonder if EM has some investors willing to co-sign on the loan and would be responsible for making up the gap?

The entire loan doesn't have to have received guarantees, but enough will need to be shown that the revenue stream is likely to produce sufficient revenue to pay back the loan. That loan is not due on the first year anniversary.

I was actually thinking the projected profit was only about $500 per vehicle which would produce profits of $125,000,000 per year (on gross revenues of $1,750,000,000) when producing the anticipated 250,000 vehicles per year. That is certainly sufficient to pay back the ATVM loan and the supplemental loan required for startup over the first few years.

ps I do not foresee demand for $7,000 vehicles to be a problem in the foreseeable future.

 

[Ekh]

The entire loan doesn't have to have received guarantees, but enough will need to be shown that the revenue stream is likely to produce sufficient revenue to pay back the loan. That loan is not due on the first year anniversary.

I was actually thinking the projected profit was only about $500 per vehicle which would produce profits of $125,000,000 per year when producing the anticipated 250,000 vehicles per year. That is certainly sufficient to pay back the ATVM loan and the supplemental loan required for startup.

What everybody keeps forgetting is the $400 to $500 profit in every automatic transmission. And 93% of Americans buy automatics when both Transmissions are offered. I don't know why he Elio isn't public about this but maybe they just need a quiet bit of profit to bolster the bottom line when production begins. If it were me, I would be factoring this certain level of profit into every communication with both the SEC and DOE.

 

[Marshall]

What everybody keeps forgetting is the $400 to $500 profit in every automatic transmission. And 93% of Americans buy automatics when both Transmissions are offered. I don't know why he Elio isn't public about this but maybe they just need a quiet bit of profit to bolster the bottom line when production begins. If it were me, I would be factoring this certain level of profit into every communication with both the SEC and DOE.

My suspicion is that Elio receives about $200 profit per transmission (20% markup) and the supplier receives about $200-$300.

 

[Ekh]

My suspicion is that Elio receives about $200 profit per transmission (20% markup) and the supplier receives about $200-$300.

When the transmission was first identified, GoofyOne priced the cost to Elio at between $500 and $600 (researched the price, not speculation). If the transmission is selling as an option for $1050, the margin is between $400 and $500. There is no differential labor charge to install the automatic (or at most an insignificant one); it may even be easier.

 

[Marshall]

When the transmission was first identified, GoofyOne priced the cost to Elio at between $500 and $600 (researched the price, not speculation). If the transmission is selling as an option for $1050, the margin is between $400 and $500. There is no differential labor charge to install the automatic (or at most an insignificant one); it may even be easier.

I guess I'm not convinced the cost to Elio is accurate. But I've been wrong before and surely will be again.

 

[Ekh]

I guess I'm not convinced the cost to Elio is accurate. But I've been wrong before and surely will be again.

Me, too. But G-1 almost never is ....

 

[Marshall]

Me, too. But G-1 almost never is ....

If he's correct and Elio sticks to their 20% markup plan, the cost should be more like $720. ($600 x 120%).

Option prices are not set in stone yet you know. I've been waivering on the AMT so that might put me past the tipping point.

 

[NSTG8R]

When the transmission was first identified, GoofyOne priced the cost to Elio at between $500 and $600 (researched the price, not speculation). If the transmission is selling as an option for $1050, the margin is between $400 and $500. There is no differential labor charge to install the automatic (or at most an insignificant one); it may even be easier.

Could the difference possibly be due to the ECM/PCM change and solenoids needed to operate the auto tranny. The auto tranny might be $500 to $600, but the little extras to make it work add up.

 

[Elio Amazed]

Old Norse French "poque" meaning a coarse bag. Kin, i believe, to "pucker."

I can see that I'm going to have to very careful here or I'll end up getting myself edjumacated.

 

[WilliamH]

Keep in mind folks....... The ones who want this higher level of commitment demonstrated by American tax payers are the same ones who sent a pallet full of non-sequential, non-marked, non-American currency to the folks that they just negotiated a nuclear deal with.
And who want to put Big Coal and Big Oil out of business.
I think I'll believe what Paul said in his letter about the reason.

....."
As part of the final steps of the evaluation of our application for the ATVM loan, the U.S. DOE requires that Elio Motors demonstrate market acceptance for our project in order to provide a level of certainty about our long-term viability. Although we have received overwhelming market support from our fans, with more than 56,000 total reservations and over 85% of those “non-refundable,” according to the ATVM’s new guidelines published June 2016, that is not enough to demonstrate market acceptance:

“Where a start-up company that has not generated revenue seeks to commence or progress operations, … in all but the most extraordinary circumstances, market studies and non-binding customer reservations to purchase vehicles will not be sufficient…” [Emphasis added]. ​

"....

I wonder what the next change in the terms of the ATVM program will be.