Friday Blog Is Out

[Ty]

In the end, Elio has said, North American Content". The reality is, Paul was right and many people just removed the word "North" and were happy. Technically, 90% of the content could be made in Mexico and the remaining 10% in Brazil. That would fulfill what Paul said legally. As for assembly, it's in America. Just like the VW Passat. 85% North American Content and assembled in America. The motor for the Passat is made in Puebla Mexico, the transmission in Essen Germany and the car assembled in Chattanooga, USA.

No dispute there. The original issue was that there was no manufacturer making a low horsepower, efficient engine who had capacity to build more for Elio at the volumes Elio would need to achieve mass production at a level that would allow them to buy other parts cheap enough to build the thing for anything like the price they've been working towards. That would mean they needed an inexpensive engine and inexpensive usually means low-tech.

 

[RSchneider]

No dispute there. The original issue was that there was no manufacturer making a low horsepower, efficient engine who had capacity to build more for Elio at the volumes Elio would need to achieve mass production at a level that would allow them to buy other parts cheap enough to build the thing for anything like the price they've been working towards. That would mean they needed an inexpensive engine and inexpensive usually means low-tech.

Low tech doesn't mean low price. If this was the case, then Elio would have never released that they were going to not use their engine. The engine was done and super simple and thus means cheap. yet, Elio admitted they were going to save $120M by not finishing it. So, $120M did not come out of the clear blue and since these vastly available engines have been around for ling before Elio was in business, there must be an issue as to why the about face on what they were wanting to do. I have my theory but it's just a theory based on my past experience in reality. Thus not viable.

This is no different as to why Elio was hell bent on a more expensive tube frame and plastic body as opposed to using the existing equipment they purchased that could stamp out a much cheaper unibody and body panels.

It looks like two big mistakes for Elio and they have changed their business plan to fix those mistakes. I just with the would have listened to the experts and fixed it back in 2013 as opposed to waiting until 2016 and 2018.

 

[Ty]

Low tech doesn't mean low price. If this was the case, then Elio would have never released that they were going to not use their engine. The engine was done and super simple and thus means cheap. yet, Elio admitted they were going to save $120M by not finishing it. So, $120M did not come out of the clear blue and since these vastly available engines have been around for ling before Elio was in business, there must be an issue as to why the about face on what they were wanting to do. I have my theory but it's just a theory based on my past experience in reality. Thus not viable.

This is no different as to why Elio was hell bent on a more expensive tube frame and plastic body as opposed to using the existing equipment they purchased that could stamp out a much cheaper unibody and body panels.

It looks like two big mistakes for Elio and they have changed their business plan to fix those mistakes. I just with the would have listened to the experts and fixed it back in 2013 as opposed to waiting until 2016 and 2018.

I agree about the stamping process being better. The $120M they are talking about are upfront costs of developing their own motor and I suppose someone figured out that they could buy a crap ton of motors from someone else for $120M which lets them keep prices reasonably low for quite a while...

Lets see, at $1,500 per each motor minus (wild guess on what Elio would spend per engine) $400 is $1,100 per engine difference between outsourcing and in-house manufacturing your engines...
$120M divided by $1,100 per engine (Summit Racing Price... I didn't bother checking on some bulk pricing) = 109,090 Elios worth of engines.

So, the break even point is probably "production + 6 months".

By out-sourcing the engines, they'll at least be able to get started right away.

 

[RSchneider]

I'm a bit confused about the $120M. Elio needs $85M in R&D to finish the car (they have spent about $65M so far). I assume that Elio was going to outfit the plant to make engines and then pay Linamar to build them? At this point many of the numbers do not make any sense to me and thus I can't get any grasp as to when Elio would stop bleeding money and go to having it cash flow positive. I think if Elio was more straight forward about this in their SEC filing as opposed to yanking out information like they did in the last one, that the company would look much better for investors.

Then, Elio has been using "powertrain" that means, engine and transmission because when you put them together, 100% of the automotove industry refers to it as a powertrain. This will be a combined unit they will be purchasing as opposed to separate. Even at that, the car needs a ton of R&D to get to production level status and with what they have right now, is not even close. I can see how that $85M will not be reduced by much, same for the timeline.

In the end, it shows that Elio made two major mistakes and admitted to it. I know that many have told them of those mistakes back in 2013 and earlier. I'm afraid that now it's much harder for them to dig out of this hole as opposed to 6 years ago. Plus it's been over a year since they dusted this project off, thus it'll need to be dusted off again as it's been sitting with zero progress. As we all know, when there's a tiny amount of progress we see it in the blog in a nanosecond.

 

[Samalross]

Everything should be cleared up by June 10 at the latest. They know that going to pink sheets will give them as much credibility as a Nigerian prince in fund raising . The report will also have to disclose if there is money held in escrow for the refundable deposits

 

[RSchneider]

The report will also have to disclose if there is money held in escrow for the refundable deposits

From the last SEC filing:

the Company has recorded $2,296,248 and $2,237,898 as restricted cash held for customer deposits as of June 30, 2018 and December 31, 2017, respectively. These amounts include amounts held as restricted that relate to refundable customer deposits, as well as amounts held as reserves by credit card processors.

 

[Samalross]

From the last SEC filing:

Louisiana Supreme Court has their doubts, otherwise they wouldn't be fining them $5000 a day if they do not show proof.

 

[RSchneider]

Louisiana Supreme Court has their doubts, otherwise they wouldn't be fining them $5000 a day if they do not show proof.

That's not uncommon. I would have thought that this would have been cleared up in the original hearing but when a judge asks for information yet again, you just do it. I will bet that Elio proved it within a week of the appeals hearing. There's no reason why they would just lie about that on an SEC filing when the rest of the finances looks like a train wreck. The $2.3M is peanuts when you look at the grand scheme of things. It's just like the $545K fine. That nothing as compared to the $7.5M fine and the rest of the payments that have been put off month to month.

Hopefully they raise the rest of the money to pay off the rest of their bills and fines then they pull a Rivian and get massive investments from the middle east, Amazon and Ford. That way, they have people to answer to that matter. If you notice, Rivian has been in overdrive with the updates since that cashcow came in. There's a reason for that. Mr. Bezos, Mr. Ford and the Saudis will demand answers and progress. When Elio gets this type of investment (which is showing that the markets are fixed for this type of investment) that the good times will be back and no more wishy washy forward looking statements and months of no news whatsoever.

It's coming soon as there's way too much investment in large capital investments that makes Elio look like a small player. Time is ripe for Elio.

 

[RSchneider]

Also, just look at what Rivian is doing to build a massive fan base and refundable deposit base for their truck. I know we are all really poor and can't afford one but obviously there are lots of people that can.

 

[Samalross]

Also, just look at what Rivian is doing to build a massive fan base and refundable deposit base for their truck. I know we are all really poor and can't afford one but obviously there are lots of people that can.

Time for an Elio electric pick up