Fire Side Chat With Paul - 9 Sept

[WilliamH]

So I reviewed the video and kept in mind some of your first impressions about it.
As for Paul's self presentation, his clothing and the infamous cup. You know, it depends on the venue. He's dressed very consistently for a venue that happens basically in a cafeteria, and he's not out of line compared to others there. And frankly, he shows no hint of uppity -I-know-more-than-you arrogance. He just comes off as knowing what he's doing, and very in touch with what the common people need and want. HE just appears to be -one-of-us, but with the smarts and savvy 'to do this'. The only thing I didn't like, is I wasn't sure at times what he was laughing at.

We are all very used to Paul's past rhetoric, and would rather to hear hard facts we are OCD'ing on right now. But most of the public like a comfortable 'I knew it' story line. It's a 'feel-good' proposition for them. Kind of like George Bush. For while there, maybe too long, people felt like he could talk plainly to them. His speaking pitfalls were a benefit from that point of view.

Now if Paul interviews in a more prestigious venue, like talking to the president (of anything), he certainly should up his game.

Now on the P5, Paul noted it twice. And hit hard on the idea that physical accomplishment was key right now. I think EM should listen to themselves and tell us more about what was accomplished and successful in their engine results. So he seems hard driven for the next P5 milestone. But exactly what does 'soon' mean? 20 weeks would have been the end of October, so I would think that's not 'soon'. Hopefully, more like the end of September to Mid October is what soon actually means in this case.

So LillyMay! You are quickly becoming famous, you know that?! I think you are lifting the awareness EM has for this forum. I suspect if anyone in the EM field of play gets a Email with your signature on it, they will sit up and listen. So keep in mind, you have some leverage! Enjoy!

The other takeaway, the results of the A+ adventure has, and is continuing to raise the stature of EM in the business and investment world.

I notice too that Paul talked about paths a bit stronger than sources of funding. That is to say, he doesn't seem to be stuck on the thought of 'fully-fund' then produce. He may well mix it up, for example, perhaps partially funding, and acquiring on the run during the first year of production.
Even so, the biggest expense according to Paul is 'hard-tooling', that is all the machines and skilled work that goes to setting up production. Some of that could be phased in as well, IMHO, pushing out a pilot production, and later going full output as investment allows.

According to Paul's path 3 (?), reservations with $1000 all-in, if that reached 60% of 240k reservations, that's $144million right there. To get that, I guarantee EM must get the P5 and the E1-25 done first. It might also help to announce a schedule for production start. Even so it might be as late as the last quarter prior, to see year1 fully-reserved, even into the production period.

.............."pushing out a pilot production"....................
I'm still waiting on an explanation on how you do this "pilot production" on an assembly line?
Seems like once you have the assembly line tooled up there is no pilot.
And if you don't have the tooling you don't have any production.
I think Yoda said it best...........

Also, no half measures.

 

[JEBar]

I don't think those that prefer an EV's performance would force you to buy or drive one. Although I've heard many say that once you drive electric you will never go back. If you drive one you may better understand.

agree that driving one for a while is the best way to understand .... owned one, been there, done that .... do EV's have advantages, they most certainly do .... do EV's have shortcomings, they most certainly do .... can they fill a the needs of a niche market, they certainly can .... will they ever replace gasoline powered type vehicles, ever is a long time but it won't be in my lifetime .... until they come up with major improvements in battery and recharging technology, I never want another one

 

[Jeff Porter]

Oh the glamorous life of a tier 1 hardware analyst, RF guns, POD units, iPads, voice pick devices and printers. Tomorrow I get to spend a whole day at our biggest warehouse, dodging killer forklifts and hostile inventory pickers.. good times..

I recognize some of those terms! Voice pick devices are used to pick items off the shelves in the warehouse, correct? Radio Frequency guns scan the bar codes?

 

[Ekh]

Except there's no mention of those two sources in the offering statement. Everything is laid out in there (ATVM loan, deposits). That tells me he's not confident enough in them to actually mention them to the SEC. Hopefully I'm over thinking things.

I tend to think the explanation's a little different: the "Mystery Angels" may have said, you have to exhaust every possible way to do this without our intervention. But when all else fails, then maybe ..." (or even, "when all else fails, come and talk to me. Maybe you can do me a favor some day" or at worst, "when all else fails, sign here ... nothing due til after you die. No, don't use that pen, here, just a little pin prick and then sign ...."

I bet Paul would even go for that last deal, if it would get his car launched!

 

[Coss]

Everyone doesn't want to reduce range, but many like the EV option for City driving or 200 miles per charge commuting. Can always quick charge at work.

The price would more likely be closer to $15K or under as the Elio is half a $35K Tesla Model 3. I don't think those that prefer an EV's performance would force you to buy or drive one. Although I've heard many say that once you drive electric you will never go back. If you drive one you may better understand.

Watching that video was funny; most of the people that were overwhelmed at the acceleration had never been in anything that had some good hard acceleration. There was one older couple that the woman was wide eyed and yelling while hubby is in the back seat with just a smile; I think in his younger days going fast was a regular occurrence.
All electric will do that; it gives you full power the instant you tell it to; but I would like to know what the battery drain is like doing that.

All the electrical stuff happening is great now. Give it a some years and watch "everyones" electric bill go UP.
Maybe SOLAR/WIND for the Electric Companies by then will be working right.
Willie

I had an "off the wall" thought when I read your reply Willie; that is, why don't they mount a small wind turbine on the roof/body of electric or Hybrid cars to charge the batteries as you're going down the freeway? That's a 60mph+ headwind when you're doing highway speeds, and it could even charge when parked with a breeze in a parking lot.
Just a thought .....

 

[Ekh]

So an hour of chit chat, a lot of back patting, and all I heard that MIGHT be news was the P5 is coming 'soon' and SEC approval could happen in 4-6 weeks. Neither of those were actual facts, definitive milestones, just generalities. I really was hoping we could skip the back story and jump right to hard questions, but that certainly didn't happen. I knew we were hosed when the first question was "Tell us why you invented the Elio", I seriously doubt there were many viewing that livestream that haven't heard that multiple times already. Maybe I'm wrong, maybe repeating that is important. I wanted to know how this 25-30 million was the key, what it was going to enable to make the rest happen (ATVM approval? Big Angel Investor?) There were references to it re-energizing EM and their suppliers, and that's important, but we're throwing $30 million down a black hole if the other $150 million doesn't appear from somewhere.

The only bits of actual news were 1) that they did not destructively test the first engine, and that they'd had a complete second set of parts made at that time ... AND that they were using that second engine for the P5 instead of a tweaked E-type engine. 2) That Paul actually has a long-range vision for the company.

 

[bowers baldwin]

I recognize some of those terms! Voice pick devices are used to pick items off the shelves in the warehouse, correct? Radio Frequency guns scan the bar codes?

Yup, pretty much dead on, we use (*WARNING BORING STUFF AHEAD*) Motorola MC9190, MC3190, and MC65 units. My job(s) is to load our software and Airwatch to manage them, swapping cell service, hardware repairs, new deployments etc, riveting stuff. The MC65's are our POD units (point of delivery) basically similar to the device the UPS guy has you sign when you get your package.

 

[AriLea]

.............."pushing out a pilot production"....................
I'm still waiting on an explanation on how you do this "pilot production" on an assembly line?
Seems like once you have the assembly line tooled up there is no pilot.
And if you don't have the tooling you don't have any production.
I think Yoda said it best...........
View attachment 6849
Also, no half measures.

In 'theory' to get a full production volume at a specified high rate, you need a defined set of tooling, equipment, workers, training, facility and materials logistics. Any deviation from that will either be slower, or more costly or impossible at the extreme of being under-provisioned. Anyway anything not extreme would still see a less than optimal production as possible. Anyway, that's just my 'theory' having worked in low volume (high value) and also 'emergent' production for Boeing.

Anyway this is only useful in the odd case if just getting going for a short time is needed to trigger some final funding release. Otherwise it's a losing proposition if the profit margin goes to zero or even negative.

 

[JEBar]

In 'theory' to get a full production volume at a specified high rate, you need a defined set of tooling, equipment, workers, training, facility and materials logistics. Any deviation from that will either be slower, or more costly or impossible at the extreme of being under-provisioned. Anyway anything not extreme would still see a less than optimal production as possible. Anyway, that's just my 'theory' having worked in low volume (high value) and also 'emergent' production for Boeing.

Anyway this is only useful in the odd case if just getting going for a short time is needed to trigger some final funding release. Otherwise it's a losing proposition if the profit margin goes to zero or even negative.

this is another case where we are looking at an issue and formulating comments without having the all the facts .... EM is approaching the issue with all of the facts in hand and has come up with a solution .... a solution that may not make sense to us because, as noted, we don't have all the facts .... a pretty good example of a circular discussion

 

[Rob Croson]

Except there's no mention of those two sources in the offering statement. Everything is laid out in there (ATVM loan, deposits). That tells me he's not confident enough in them to actually mention them to the SEC. Hopefully I'm over thinking things.

They don't necessarily have anything to do with the SEC offering statement. If he only has verbal agreement with the sources, then there's nothing to show, as they essentially mean nothing. Remember that the SEC approval for the stock sale has nothing at all to do with the risk of the investment, nor any kind of official endorsement of the offering as a good investment. SEC approval is concerned with compliance with the law. That means certified full disclosure of the financials in a standard format. It's up to you as a potential investor to do your due diligence and decide if the risk involved is something you are willing to accept in order to get your expected return.