Ars Technica Covers The Atvm Loan Hoarding Catastrophe

[RSchneider]

The ATVM people changed the requirements to 65K fully-paid purchase orders in June 2016

If you could provide the source for that, I'd like to read it because that's the first time I have ever heard that they needed 65K fully paid purchase orders. If the ATVM loan people made this a requirement, then I can see why Elio Motors would be really upset. I do know that they needed to demonstrate market acceptance and this is the result:

As a special incentive if non-refundable reservation holders made a binding purchase commitment, the locked price is reduced to $7,000. As of March 31, 2017, the Company had received 65,255 total reservations, of which 36,435 had received the locked price of $7,300 and 21,204 had made a binding purchase commitment and had received the locked price of $7,000.

This is what they had on an older SEC filing:

On August 12, 2016, the Company circulated an offer that until we reach 65,000 total reservations, non-refundable reservation holders will receive a locked price of $7,300, exclusive of destination/delivery charges, taxes, title, registration and options/installation. As a special incentive, if non-refundable reservation holders make a binding purchase commitment the locked price is reduced to $7,000. As of the date the financial statements were available to be issued, the Company has received 59,216 total reservations, of which 16,239 have made binding purchase commitments.

 

[RSchneider]

On August 12th,2016...Paul Elio made the following statement on the Elio website with regards to the ATVM program...

“As I have previously shared, the ATVM program is not a breaking point for Elio Motors.”

It is my recollection...Paul stated several times that he hoped to qualify for ATVM assistance...but the success of Elio Motors did not hing on ATVM participation...

Given Paul’s comments... I see no grounds for a lawsuit against the ATVM....

Here's some from August 2017:

If we are unable to obtain a loan under the ATVM Program, we will rely on funding through the issuance debt and/or equity securities, customer reservations, and possibly CAFE credits.

 

[Watashiwah]

As the fog clears some of us might be wondering just how much stake we should have put in ‘cafe credits’ and getting the ATVM loan as part of the ‘business plan.’ Sure it sounds good when we’re imagining zipping around in our new cool cars and all. And yes, Paul and Co. made us feel all positive that many other financial options were in the works. Some of us liked the idea of this creative way for us to finance it thru buying gas, too, but never really thought about EM finding a credit card company to facilitate it.

Now there’s what might be ‘sour grapes’ about apparent misfeasance of the DOE for not writing ATVM loans: now with our enthusiastic fog lifting isn’t it more clear that even a well tuned internal combustion gasoline burner pulling what is simply a smaller, lghter, and thinner car is not what Advanced Technology (the A and T in ATVM) is all about. Remember too that even that ‘well tuned’ smaller engine probably had about a gallon of fuel run thru it and we never heard anymore about it.

It’s not the DOE that killed Elio Motors. Not getting that loan is the probably best thing that has ever happened for Paul, and maybe Hari, too (this time they both made big money on not getting the loan they historically never got! Very interesting, indeed!)

 

[Elio Amazed]

Did you notice that there already seems to be a lot of finger pointing going on and it's not even officially over yet?

Brand loyalty. Sometimes it's not pretty.

 

[RSchneider]

Here's what confuses me. Paul and Hari knew each other from before ESG Engineering. They co founded ESG Engineering where Paul is the President and Hari is the VP since around 2000. So they must talk a lot and know each other pretty well. ESG Engineering did engineering work for V-Vehicle from 2006-2009. V-Vehicle got rejected for their ATVM loan. Elio Motors must have got rejected from their ATVM loan #1. So, with Paul and Hari literally being involved with two projects that got rejected for two ATVM loans, the last loan was made in 2011, the laundry list of various companies that all got rejected and went out of business, why would these two decide to apply for another ATVM loan in 2014? It makes no sense.

It's been well documented for years with all of the hoops you have to jump through, how they don't communicate well and change the rules midstream. Why subject yourself to that torture? The whole program from day 1 has about a 99.9% rejection rate. I think they have only approved a total of five loans and two of them were duds. Why did they pay Hari $80K after he left the company to further the ATVM loan? That just seems like a waste of money to me.

This would be like betting on a three legged horse which constantly loses. Then betting on it again hoping for a different outcome or praying that lightning strikes and kills the 10 other horses in the race. There has to be a point where you finally decide to just move on. Elio has to be at that point because they got to know by now that the ATVM loan is that three legged horse.

I could see this scenario happening. Elio wins the court case and they fet on NASDAQ which gives them a $100M check. They get moving along and everyone starts chanting ATVM! ATVM! ATVM!. Then the ATVM people make Elio jump through another hoop and the project goes to another standstill. I just don't see how Paul and his employees could handle another letdown like that.

 

[4matic]

Here's what confuses me. Paul and Hari knew each other from before ESG Engineering. They co founded ESG Engineering where Paul is the President and Hari is the VP since around 2000. So they must talk a lot and know each other pretty well. ESG Engineering did engineering work for V-Vehicle from 2006-2009. V-Vehicle got rejected for their ATVM loan. Elio Motors must have got rejected from their ATVM loan #1. So, with Paul and Hari literally being involved with two projects that got rejected for two ATVM loans, the last loan was made in 2011, the laundry list of various companies that all got rejected and went out of business, why would these two decide to apply for another ATVM loan in 2014? It makes no sense.

It's been well documented for years with all of the hoops you have to jump through, how they don't communicate well and change the rules midstream. Why subject yourself to that torture? The whole program from day 1 has about a 99.9% rejection rate. I think they have only approved a total of five loans and two of them were duds. Why did they pay Hari $80K after he left the company to further the ATVM loan? That just seems like a waste of money to me.

This would be like betting on a three legged horse which constantly loses. Then betting on it again hoping for a different outcome or praying that lightning strikes and kills the 10 other horses in the race. There has to be a point where you finally decide to just move on. Elio has to be at that point because they got to know by now that the ATVM loan is that three legged horse.

I could see this scenario happening. Elio wins the court case and they fet on NASDAQ which gives them a $100M check. They get moving along and everyone starts chanting ATVM! ATVM! ATVM!. Then the ATVM people make Elio jump through another hoop and the project goes to another standstill. I just don't see how Paul and his employees could handle another letdown like that.

The business relationship between Hari & Elio can be referred to as “cronyism”... everyone had their hands in Elio’s cookie jar (checkbook)...

I wouldn’t worry too much about the court case...in the scheme of things it really doesn’t matter...I doubt whether Elio has the legal resources (or money) to defend itself...

The clock is ticking on the whole Elio saga...Paul can’t hide forever...

 

[4matic]

As the fog clears some of us might be wondering just how much stake we should have put in ‘cafe credits’ and getting the ATVM loan as part of the ‘business plan.’ Sure it sounds good when we’re imagining zipping around in our new cool cars and all. And yes, Paul and Co. made us feel all positive that many other financial options were in the works. Some of us liked the idea of this creative way for us to finance it thru buying gas, too, but never really thought about EM finding a credit card company to facilitate it.

Now there’s what might be ‘sour grapes’ about apparent misfeasance of the DOE for not writing ATVM loans: now with our enthusiastic fog lifting isn’t it more clear that even a well tuned internal combustion gasoline burner pulling what is simply a smaller, lghter, and thinner car is not what Advanced Technology (the A and T in ATVM) is all about. Remember too that even that ‘well tuned’ smaller engine probably had about a gallon of fuel run thru it and we never heard anymore about it.

It’s not the DOE that killed Elio Motors. Not getting that loan is the probably best thing that has ever happened for Paul, and maybe Hari, too (this time they both made big money on not getting the loan they historically never got! Very interesting, indeed!)

No “sour grapes” here...

But... I’m looking forward to knowing how Elio Motors misappropriated $150 million in OPM (other peoples money)...LOL

Yes... very interesting indeed!

 

[Watashiwah]

“I could see this scenario happening. Elio wins the court case and they fet on NASDAQ which gives them a $100M check. They get moving along and everyone starts chanting ATVM! ATVM! ATVM!. Then the ATVM people make Elio jump through another hoop and the project goes to another standstill. I just don't see how Paul and his employees could handle another letdown like that.”

RS,

I agree with everything you said earlier except for what is pasted above: The $550,000 court case is peanuts compared to both EM’s debt and to amount of money they need to get going (even slowly, get going). It’s worth much more than half a million as a foil for EM to use as a convenient excuse or as a diversion.

That NASDAQ check, I know you know, isn’t really a check from NASDAQ; we are told that Drexel Hamilton will float a $ 100million stock offering (for about 10 percent) if EM gets listed on NASDAQ, I could write a book on how unlikely that is: The failures to file with the SEC will leave horrible scars. As far as I know, there is no tangible proof of any of this: it’s kinda like the 65,000 reservation threshold, a dim light at the end of a long tunnel. Proof or not, how likely is this to work? By any accounting EM needs an infusion of $350 to $500million, not a $90 to $100million bandaid that will pay some debt to quasi-partner Stu and might allow Paul and Hari to sell about $27million in Elio stock owed to their ESG Engineering ‘holding company.’

Not to be flippant but you are right that the doors to the ATVM loan won’t spring open; one might as well go buy a lottery ticket, get a 21 year old Scandinavian nymphmaniac, leave your wife, quit your job and move to Costa Rica. Haha, it’s about that likely to happen. Eight to ten years of no loans, now to a company with mgmt issues, 8 to 10 year old technology, and even then obsolete 8 to 10 years ago. Not gonna happen.

Finally, you may be giving ‘Paul and his employees’ a little too much credit. First there really aren’t too many employees, the only sign of one is those pathetic ‘Momentum’ blogs, and most importantly, Paul isn’t hurting financially, to say the least. This might be the best thing that’s ever happened for him. One thing for sure, he’s not sitting around lamenting and waiting on his Elio trike to arrive.

 

[4matic]

Not to be flippant, but if you think then that the doors to the ATVM loan will spring open, you might as well go buy a lottery ticket, get a 21 year old Scandinavian nymphmaniac, leave your wife, quit your job and move to Costa Rica.

Hey Watashiwah,

This scenario sounds like fun...where do I mail my application! LOL

 

[RSchneider]

I was giving a hypothetical scenario. Because in February 2016, Elio needed $12M to build, test and validate 25 E-Series. They got $16M. So, the excitement had to of been that the ATVM loan was now a given. We all know the rest of the story but the whole thing ended up being a letdown for everyone at EM by the end of 2016. Elio got further but not by much and most of the employees obviously lost their job. That has to be hard for whoever is left because when things get going, there's another hurdle to overcome. These are not small hurdles but huge ones.