Are There Documented Empirical Marketing Studies For Elio Motors?

[WilliamH]

I keep hearing people say that this goal or that goal is unprecedented. So I looked it up.

unprecedented:
Something that is unprecedented is not known, experienced, or done before. If you've never gone on a family beach vacation but you're planning one now, you could refer to it as an unprecedented decision.​

So every time you hear someone say Elio's goal in unprecedented keep in mind it only means no one has tried it before, or had a strategy to accomplish it before, or had the guts to try it before.

 

[TeamCoconutOreo]

Thanks Jeff!

The reason I find the 250K projection so pivotal, Paul has stated the $7,000 base price estimate (give or take) is based on spreading the unit costs of 250K units annually.

So if Elio Motors sells only 50K to 100K units a year (which would be a home-run in my books), that would likely necessitate raising the base price to $12,000 (give or take) to support the higher costs associated with selling less units.

At $12,000, the value proposition of the Elio changes dramatically .

I would hope Paul has hired an outside consumer consulting firm to validate his 250K run rate, it's the most important factor in his $7,000 price offering!

Where do you get your $12,000 figure from?

 

[WilliamH]

Once again we look at definitions.......

empirical:
1. derived from or guided by experience or experiment.
2. depending upon experience or observation alone, without using scientific method or theory, especially as in medicine.
3. provable or verifiable by experience or experiment.​

Seems like the key word here is "experience".
I don't want to pick a fight with anyone, but it appears that once again someone wants to use words that we think we are familiar with to lead us down a rabbit hole.
We don't have any case of a "three wheeled car" being mass produced in the USA.
We don't have any case of a "tandem 2 seat car" being mass produced in the USA.
We don't have any case of a "extremely high mileage car" being mass produced in the USA.
So with the totally unknown issues at the heart of the question, how do we do an "empirical study" since by definition an "empirical study" requires "experience"....... Which we don't have.
Take away?
When someone asks is there is "empirical study" on something there is no history with it's snowing in July in Phoenix.

 

[wizard of ahs]

I don't know if it can be equated, but 50k folks who hope/believe in the project are taking a Big gamble. When they are zipping down the road, I think there will be the same reaction when VW came to America, folks seeing them on the road and all the great ads they ran- they were VERY cleaver- Loved the one floating the VW.
i.e. they'll sell themselves. AND current low oil prices are a blip,

Keep in mind, the first year the bug came to the U.S., they only sold 2 !!!!

VW "almost" pulled the plug, but the dealer asked for more and well, the rest is history

VW Bug (old article, but applicable)

 

[wizard of ahs]

Even if you just consider solo commuter drivers (80% of 128 million) who currently have a vehicle that gets < 25mpg (~50% of vehicles) and only 1% of those are converted, it still adds up to 512k Elios sold. That's quite a niche.

Using 2012 (!) data, that 512K works out to .0020% of the registered vehicles in the U.S.(2012), not much a niche !!

Still waiting for mine.............. I LOVE niche vehicles

 

[Sethodine]

Where do you get your $12,000 figure from?

He basically just made it up; $6800 sounds too good to be true, so he picked a number that feels more like other products he is more familiar with.

But the fact is, we know from the SEC filing that if Elio was forced into a lower production rate they would still only be $7500 each.

 

[AriLea]

He basically just made it up; $6800 sounds too good to be true, so he picked a number that feels more like other products he is more familiar with.

But the fact is, we know from the SEC filing that if Elio was forced into a lower production rate they would still only be $7500 each.

Yes! That is probably based on reaching the 68k expectation Paul was first confident about. After EM reached about 20k reservations we started hearing about the 240k production expectation. In fact the suppliers will have provided a pricing structure, these prices for these volume rates per order.

IMHO, Elio has definitely done the research as part of building up the product package. He's just keeping it confidential unless there is some material reason to expose it. Possibly as of the public offering that will be available. Most likely only to prospective stock buyers.

It's relatively easy these days to ask for a base line for vehicle marketability. These things are rated in risk factors. But also a more progressive analysis can be projected in ratio to the current reservations. There will be two number ranges that EM will have looked at, the projection based on reservations. i.e for each reservation how many year1,year2..3. sales are indicated. Then there is cold contact expectations. Basically taken off the street, with out prior exposure, how many people would buy the car? That's where the most analysis methods have been developed towards. So the two numbers are more or less averaged or at least weighted against each other.

EM has some good reasons for keeping 'solid' evidence to themselves, so long as they have other ways to promote the product. Personally I feel it is important to NOT convince competitors that this will fly. So until it is needed for convincing investment I'd want it kept confidential.

The more EM publishes the more questioning they get from people. They just don't have the time for that distraction.

 

[Aprilia]

Now that Elio is a public company...future 10-Q reports will offer critical updates that will measure their ability to bring their vehicle to market...

The collapse of the crude market is certainly an unforeseen "Black Swan" event which appears to be hindering Elio's ability to secure long term financing...

 

[Aprilia]

My personal opinion is... Because of the current political climate in the United States...the ATVM loan will prove to be elusive... thus forcing Elio to refocus on finding private capital...

 

[Sethodine]

My personal opinion is... Because of the current political climate in the United States...the ATVM loan will prove to be elusive... thus forcing Elio to refocus on finding private capital...

I think that's unlikely, considering how much trouble the Department of Energy has gone through specifically to allow Elio to apply. DOE changed the requirements of the ATVM to allow 3-wheel vehicles, then invited Elio to apply. Furthermore, the DOE has already stated that Elio is a fit for the loan so long as they can prove their MPG numbers. Paperwork and related issues may delay the loan process, but as long as Elio can show their work then the loan is in the bag.

Elio's projected MPG value of 84 is based on the EPA's formulas. Using the less-rigorous standard imposed by the DOE, Elio is projected to get 95 MPG, and all they need to qualify for the ATVM loan is 70. (Or is it 75? the numbers are all starting to run together in my head).

I'm more concerned about engineering hiccups than I am about the ATVM loan.