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

[Elio Amazed]

Hate to say "Wrong" using my best Trump voice, but you're incorrect. If Elio did not need "further government loans for operating capital" we'd have Elios running off the assembly line now, and not suffer through yet another delay. As of the 11/18/16, they had $100K in cash for operating capital. That's a far cry from the $185+ million they need to turn on the switch for the manufacturing line.. Future orders are not cash not in hand. They do not have enough funds to complete the final engineering steps, custom manufacturing tooling, nor to open up the retail shops. All of that takes a lot of capital. It takes money to make money.

Elio is not Tesla. Paul is not a multi-billionaire to float the launch like Elon did, nor does he have the over-the-top personality to get investors.

That means "further government loans for operating capital" AFTER AND IN ADDITION TO receiving the initial ATVM loan GUARANTEE. How many times must we say this?

 

[Officespaced]

That means "further government loans for operating capital" AFTER AND IN ADDITION TO receiving the initial ATVM loan GUARANTEE. How many times must we say this?

the reply i qouted does not state this. Let me be clear. Elio will NEVER get the ATVM loan unless they get external capital. Otherwise they fail a primary condition. "In order to be financially eligible for an ATVM loan, an applicant must be financially viable without the receipt of additional federal funding for the proposed project." https://energy.gov/lpo/services/atvm-loan-program

They have $100K, less I'm sure now.

 

[slinches]

You keep missing the word "additional", as in addition to the ATVM loan. If the loan is granted, they'll have more than $185Million and will be able to find private financing to cover whatever remaining funds are needed to get to production.

The point of that requirement is to prevent a company from needing to be on perpetual government assistance to pay off the loan.

 

[Elio Amazed]

OK, Officespaced. I'll give you the following. Inquiring minds do want to know how the DOE is going to be completely assured by EM that $183M in loans will turn into the $300M needed to start production and thus make EM independently viable (and THEN meet the criteria that you quoted). That's the question. I've seen quite a few reservation holders express the belief that investors will line up to invest the remaining $117M needed IF and AFTER they're awarded the guarantee. That POTENTIAL 'poke and hope' isn't going to cut it with the DOE. You're right, in that the DOE is not going to give the guarantee on a such a huge presumption, hope and gamble. What EM's spent and what they actually owe at this point in time doesn't really factor if they show that the guarantee would enable them to start production and pay the loan back. If EM shows the DOE a bullet proof "guaranteed" plan to raise that additional money through the remaining unreleased stock or they actually agree to raise that money beforehand, they might stand a chance for the guarantee. Under a realistic plan, I can see a chance of the DOE granting it.

Slinches... I'm saying that EM simply saying that they'll "be able to find private financing to cover whatever remaining funds are needed to get to production." isn't going to persuade the DOE to give them the guarantee. Not in this reality.

 

[Horn]

I remember when EM blamed the DOE for paperwork issues. Then they drug people along by saying they were made told to reapply. It got everyone all excited..... This was years ago.

Now they are using that 65k number and talking with the DOE as hopes they will get the loan. It isn't going to happen. There will be some excuse or something new. I wish some other company would buy them.... Although it would probably be cheaper to make their own from scratch.

 

[RSchneider]

It sounds like that when they get the ATVM loan and have 185M in the bank, they will be able to finish the car and make it ready for the consumer. Then finish the plant, hire people and get all of the suppliers going. Then set up and equip the marshaling centers. Then set up the showrooms around the US for people to go in to look at a car and pick up their new ride (I suspect a small percentage make a trip to Shreveport to pick up their Elio). Then train and outfit the Pep Boys for the incoming business they will have for service, parts and warranty (I assume half of the Elio owners will do their own service).

Does the 185M cover that or do they need more? Once the 65K is delivered, they will need to have some system in place to sell, distribute and service them. I'd think that making the car is one thing but you'd need more than that to stay in business. I wonder if the DOE is looking at that. It sure wouldn't look good to hire 1500 people and then 6 months later you got to lay them all off.

 

[Officespaced]

You keep missing the word "additional", as in addition to the ATVM loan. If the loan is granted, they'll have more than $185Million and will be able to find private financing to cover whatever remaining funds are needed to get to production.

The point of that requirement is to prevent a company from needing to be on perpetual government assistance to pay off the loan.

THEY DO NOT HAVE "ADDITIONAL CAPITAL!!!" On the books $100k, that's inclusive of all shareholder equity and deposits. It's all been spent!

You cannot count the additional retail revenue from those orders/deposits, regardless of binding/non-binding until the orders are actually booked/delivered! Tesla had the same problem in the 3rd quarter. They had the orders to meet the stated commitment, but manufacturing/supplier issues affected their ability to deliver finished units to end customers. It's Accounting 101, remember that class? They obviously cannot deliver those orders until they get the line running, which by their own admission will take at least $185 million to turn it on. Get your checkbook out and cut Paul a check, buying shares now does nothing for Elio themselves.

It's a nice concept, but without capital, it's just another Aptera, XP Motors, Fisker... They all had their respective fan-people that could do no wrong, yet had little vested interest.

 

[Elio Amazed]

It sounds like that when they get the ATVM loan and have 185M in the bank, they will be able to finish the car and make it ready for the consumer. Then finish the plant, hire people and get all of the suppliers going. Then set up and equip the marshaling centers. Then set up the showrooms around the US for people to go in to look at a car and pick up their new ride (I suspect a small percentage make a trip to Shreveport to pick up their Elio). Then train and outfit the Pep Boys for the incoming business they will have for service, parts and warranty (I assume half of the Elio owners will do their own service).

Does the 185M cover that or do they need more? Once the 65K is delivered, they will need to have some system in place to sell, distribute and service them. I'd think that making the car is one thing but you'd need more than that to stay in business. I wonder if the DOE is looking at that. It sure wouldn't look good to hire 1500 people and then 6 months later you got to lay them all off.

They've said for quite a while they need the whole $300M to start production.

 

[slinches]

THEY DO NOT HAVE "ADDITIONAL CAPITAL!!!" On the books $100k, that's inclusive of all shareholder equity and deposits. It's all been spent!

You cannot count the additional retail revenue from those orders/deposits, regardless of binding/non-binding until the orders are actually booked/delivered! It's Accounting 101, remember that class? They obviously cannot deliver those orders until they get the line running, which by their own admission will take at least $185 million. It's a nice concept, but without capital, it's just another Aptera, XP Motors, Fisker...

With the loan, they don't need additional federal funding, which is precisely what that requirement is about. The ATVM loan along with private investment and pre-production fleet sales will get them to the point of high volume production (the $300M that EM has stated). The revenue from those production sales will be more than enough to pay back the loan (65k x $8500 = $552,500,000). That's what the DOE requires, not the ability to pay for everything without the loan. What's the point of the program if you need to have all of the money to fund your project without it?

 

[Officespaced]

With the loan, they don't need additional federal funding, which is precisely what that requirement is about. The ATVM loan along with private investment and pre-production fleet sales will get them to the point of high volume production (the $300M that EM has stated). The revenue from those production sales will be more than enough to pay back the loan. That's what the DOE requires, not the ability to pay for everything without the loan. What's the point of the program if you need to have all of the money to fund your project without it?

Incorrect. The language states specifically they must be able to s

OK, Officespaced. I'll give you the following. Inquiring minds do want to know how the DOE is going to be completely assured by EM that $183M in loans will turn into the $300M needed to start production and thus make EM independently viable (and THEN meet the criteria that you quoted). That's the question. I've seen quite a few reservation holders express the belief that investors will line up to invest the remaining $117M needed IF and AFTER they're awarded the guarantee. That POTENTIAL 'poke and hope' isn't going to cut it with the DOE. You're right, in that the DOE is not going to give the guarantee on a such a huge presumption, hope and gamble. What EM's spent and what they actually owe at this point in time doesn't really factor if they show that the guarantee would enable them to start production and pay the loan back. If EM shows the DOE a bullet proof "guaranteed" plan to raise that additional money through the remaining unreleased stock or they actually agree to raise that money beforehand, they might stand a chance for the guarantee. Under a realistic plan, I can see a chance of the DOE granting it.

Slinches... I'm saying that EM simply saying that they'll "be able to find private financing to cover whatever remaining funds are needed to get to production." isn't going to persuade the DOE to give them the guarantee. Not in this reality.

Hence the partnership w/Oppenheimer in October, to get investors.