Jalopnik Claims Elio Has Only $100k In Bank, $123 Million In Debt

[Coss]

Thank you Rob Croson and EKH for finally being the voice of reason in what was turning into a "school yard" argument.
EKH I know you have contacts with EM and I have to respect your statement as the most factual out of what has been talked about over the last 3 pages.
It's also how I remembered the discussions with EM at the time the 65K came out.

With all that said, can we now end the mindless bickering that has started in this thread? That would be refreshing.

 

[RSchneider]

If approximately 21,400 people are absolutely going to buy the car and the rest might buy it, how many of the 65K will then definitely buy the car? That's a tough question to answer because you don't know what has happened to people. They might have died, financial situation changed, preferences changed, got disinterested in buying the car all together. For as long as Elio has been taking reservations, I would think many have just walked away and went on with something else.

As for the supplier commitment, I wouldn't read too much into that. Elio is doing the reverse as to what everyone else does when it comes to manufacturing consumer products. You don't hear who supplies the resin for the plastic or blowing agent for Whirlpool refrigerators. GM doesn't advertise as to their official radiator supplier is. Honestly, who ever heard of IAV (unless you are in the automotive industry)? In general, it's the opposite with Elio. Suppliers want manufacturers to know who they are supplying just so they can expand their business. I suspect many of the suppliers have a letter of intent with Elio. Some are doing work (which Elio is billed for) and other are waiting to get the finalized plans and money so they can set up their manufacturing and line planning.

I know it's an uphill battle but I doubt that the DOE doesn't want it to happen. This is a loan, so I can understand why they would want to make sure it's viable.

 

[AriLea]

... how many of the 65K will then definitely buy the car? That's a tough question to answer because you don't know what has happened to people.....

The assumption is two fold, there is always attrition expected. But assumption 2 is that there are more buyers who didn't want to put money down, and would step up if production came on line. But is there a reliable excess to replace attrition? There is adequate marketing research to support that there is, which was submitted to the DOE.

So the 'test' of x numbers of committed buyers is usually accurate to estimate likely sales. But there was the case that the type of offer needed to be a qualified 'fully committed' one. So EM did that upgrade.

 

[Ekh]

I went in this morning looking to reserve a car and what I found was this. If I do a $100-$1000 non-refundable, it tells me (right on the Elio site)

"Make your reservation now and you'll receive the next spot available in the production line, which is approximately 21,200. Your official number will be sent in the email within 6-8 weeks."

I wonder, does the DOE count the refundable reservations? It seems that anyone could put down $100 refundable reservation yet not actually buy the car and get their money back. I could in theory, make fifty $100 refundable reservations and never have any intention to buy the cars yet the number gets closer to the 65K. Does that make sense or is there something I'm missing?

It looks like to me that non-refundable means I'm all in and going to buy the car but refundable means, I'm on the fence about it and have not committed. Sort of like when I was in high school and I gave a girl my phone number for her to call me. Most of the time I never got the call.

Non-refundable means just that. DOE doesn't -- and shouldn't -- count the fence-sitters. But it's not a problem because the percentage of all-inners is around 85%.

 

[Ekh]

If approximately 21,400 people are absolutely going to buy the car and the rest might buy it, how many of the 65K will then definitely buy the car? That's a tough question to answer because you don't know what has happened to people. They might have died, financial situation changed, preferences changed, got disinterested in buying the car all together. For as long as Elio has been taking reservations, I would think many have just walked away and went on with something else.

As for the supplier commitment, I wouldn't read too much into that. Elio is doing the reverse as to what everyone else does when it comes to manufacturing consumer products. You don't hear who supplies the resin for the plastic or blowing agent for Whirlpool refrigerators. GM doesn't advertise as to their official radiator supplier is. Honestly, who ever heard of IAV (unless you are in the automotive industry)? In general, it's the opposite with Elio. Suppliers want manufacturers to know who they are supplying just so they can expand their business. I suspect many of the suppliers have a letter of intent with Elio. Some are doing work (which Elio is billed for) and other are waiting to get the finalized plans and money so they can set up their manufacturing and line planning.

I know it's an uphill battle but I doubt that the DOE doesn't want it to happen. This is a loan, so I can understand why they would want to make sure it's viable.

One point to clarify -- if you go in for $1,000, you get a spot in line. If you go in for less than that, you go into the preferred pool, and your position is ranked by date you signed up AND by amount you put in. The $500 people get served before the $250 people. The refundable folks get their cars after all the non-refundable people have been served, and that group too is ranked first by amount and second by date of signing up.

 

[Ekh]

If approximately 21,400 people are absolutely going to buy the car and the rest might buy it, how many of the 65K will then definitely buy the car? That's a tough question to answer because you don't know what has happened to people. They might have died, financial situation changed, preferences changed, got disinterested in buying the car all together. For as long as Elio has been taking reservations, I would think many have just walked away and went on with something else.

As for the supplier commitment, I wouldn't read too much into that. Elio is doing the reverse as to what everyone else does when it comes to manufacturing consumer products. You don't hear who supplies the resin for the plastic or blowing agent for Whirlpool refrigerators. GM doesn't advertise as to their official radiator supplier is. Honestly, who ever heard of IAV (unless you are in the automotive industry)? In general, it's the opposite with Elio. Suppliers want manufacturers to know who they are supplying just so they can expand their business. I suspect many of the suppliers have a letter of intent with Elio. Some are doing work (which Elio is billed for) and other are waiting to get the finalized plans and money so they can set up their manufacturing and line planning.

I know it's an uphill battle but I doubt that the DOE doesn't want it to happen. This is a loan, so I can understand why they would want to make sure it's viable.

It's 21,400 AT THE 1,000 LEVEL.

All-in reservations in total will be about 55,250, not 21,500. Of those 21,400 are at the 1,000 level.
The remaining wannabe reservations come to 9.750. I have no breakdown on them by dollar amount.

So of the all-in reservations, about 39% are at the $1,000 level. And, btw, 21,500 x 1,000 = $21.5 MILLLION dollars we have advanced to Elio Motors.

We get that back with a terrific interest rate in the form of the various discount programs and locked-in $7,000 price if we signed the letter of commitment.

So yes, it's risky, but think -- EM would definitely NOT be here today if we hadn't gone all-in.

They say they know they owe us, and yes, Virginia, they really do.

 

[Ekh]

If approximately 21,400 people are absolutely going to buy the car and the rest might buy it, how many of the 65K will then definitely buy the car? That's a tough question to answer because you don't know what has happened to people. They might have died, financial situation changed, preferences changed, got disinterested in buying the car all together. For as long as Elio has been taking reservations, I would think many have just walked away and went on with something else.

As for the supplier commitment, I wouldn't read too much into that. Elio is doing the reverse as to what everyone else does when it comes to manufacturing consumer products. You don't hear who supplies the resin for the plastic or blowing agent for Whirlpool refrigerators. GM doesn't advertise as to their official radiator supplier is. Honestly, who ever heard of IAV (unless you are in the automotive industry)? In general, it's the opposite with Elio. Suppliers want manufacturers to know who they are supplying just so they can expand their business. I suspect many of the suppliers have a letter of intent with Elio. Some are doing work (which Elio is billed for) and other are waiting to get the finalized plans and money so they can set up their manufacturing and line planning.

I know it's an uphill battle but I doubt that the DOE doesn't want it to happen. This is a loan, so I can understand why they would want to make sure it's viable.

You have your numbers wrong. 65,000 will have paid money to buy the Elio; it's almost 64,000 right now. As I explained above, a total of 55,000 people are all-in. 21,000 of those have paid the max of 1,000 all-in. I don't know what percentage of those all-inners would walk away from the car, but I can't think it's a large number. I wish you guys would pay attention here, because it's important.

1. Elio has paid reservations worth over $400,000,000. How much over? Depends on options, which EM has not calculated into its profit figures, but it could easily be another $1,000 or more per car (statistically, 93% of Americans opt for automatic transmission when it's available, and the profit per unit to Elio is around $500 per unit at current pricing). This is big bucks, already on the books.

2. How many will actually buy is unknown. Some will have had a change of circumstances, some a change of heart. But with non-refundable money down, most will actually buy the car. Plenty to repay DOE and other debt and still have operating capital for Year 2.

3. Elio considers the supplier base are really big part of the equation. Several suppliers, including Conntinental and the seat maker (name escaping me at the moment) have agreed to build facilities adjacent to or even within the Elio plant. These people believe the car will succeed -- and they are too big to do it on a whim. They have analyzed the market and the profitability, and are willing to invest heavily in its success. Oh, yeah, the Canadian folks are building an engine plant relatively near by. In Elio's opinion, this could the the persuading factor that persuades DOE that this is not a fantasy -- IF DOE does its due diligence.

Paragraph 3 is not my imagination. It is based on conversations with the relevant executives at EM.

This is all stuff DOE needs to know in order to feel good about the loan. The problem is that DOE is not at present making any effort do do this digging. Someone there is blocking this loan, for which there are a number of possible reasons I'm not going to get into on this board.

That's why the letter writing and twitter campaign are important. If you want your Elio, I suggest you get on board.

 

[Coss]

EKH, I don't know how it could be stated any clearer then you just did.
Thank you for the clarity.

 

[RSchneider]

For the $100 all in, this is what Elio tells me:
"Make your reservation now at $100 and you will be behind the $1,000 “All In” level (approximately 21,200 reservation holders), the $500 and $250 “All In” levels and the other reservation holders before you at this level. You can get your Elio sooner by moving up a level, or three!"

I emailed Elio this morning to change their site so people that are buying at different levels, know what their approximate number in line will be. Since 55K is the number for a $100, it would be good for them to let people know because they have more of an incentive to pay more to get further up in the line.

I'd think doing this would really help and then people that don't know they would be understand where they sit. What's the difference between $100 and $500 or $500 and $1000. If I knew that $900 leapfrogs me from 55K to 21K, then that's a pretty good incentive. If $400 only takes me 1K (I'm assuming since I don't know the numbers). For the DOE, having 55K, people that did 1K, that would be impressive as most don't have $1K to blow. As for $100, not the case.

It's good to know that Continental is opening up a plant in LA. They have a huge plant in SC. I can't find anything on the Continental Automotive website when it comes to Elio or them opening a plant there. That's a pretty big deal, you'd think they would notice it. I did see a press release of Continental supplying tire that will be made in SC. I can't find anything from Hyundai when it comes to setting up a seat plant in LA. I do find many Elio press releases about this but none from these suppliers. Building a tire or electronics plant (Teves) is a big deal. Only reason I bring this up is because the partner announcements are backwards compared to any other manufacturing I've seen. That's what really confuses me and not clear at all.

I've emailed Elio with some questions but have only got back a letter that seems to just be a boilerplate. With you guys that are talking to the executives, it's about the only way I can get any answers. I would like to thank you for helping out some of us newbies.

 

[wizard of ahs]

It "usually" only takes EM a day of two to answer emails, but lately it's been taking weeks !!!