Momentum V175

[Coss]

Elio Motors Momentum v175

In today’s Momentum, we will review a recent article by Consumer Reports (which was sent in by our support Joe K.) which helps consumers navigate trim levels and to get only the options they desire.





*MSRP excludes destination/delivery charges, taxes, title, registration, and options/installation.

Certain statements in this email including, but not limited to, statements related to anticipated commencement of commercial production, targeted pricing and performance goals, and statements that otherwise relate to future periods are forward-looking statements. These statements involve risks and uncertainties, which are described in more detail in the Company’s periodic reports filed with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Forward-looking statements are made and based on information available to the Company on the date of this email. Elio Motors assumes no obligation to update the information in this email.

Elio Motors 2942 North 24th Street Suite 114-700 Phoenix, AZ 85016 US

 

[Coss]

Page 2
Momentum v175

Trimming Costs
October 3, 2018



For almost every car buyer, one of the most important considerations for their purchase is the overall cost of the vehicle. Establishing a price range is typically the first action taken when entering the market. Unfortunately, with some automakers, trim levels make it difficult to accurately establish a price range. In today’s Momentum, we will review a recent article by Consumer Reports (which was sent in by our support Joe K.) which helps consumers navigate trim levels and to get only the options they desire.

A Consumer Reports reporter, during the process of looking for a new vehicle, found that “Chances are it’s available in at least four (and potentially several more) trim levels. These are essentially different versions of the same model, each with its own price and set of features—from drivetrain and engine type to safety enhancements to conveniences such as power seats and premium speakers. You may also find, depending on the trim level you choose, that the cost of the car you thought you could afford is actually twice the price and now out of your reach.”

While the prices of new and used vehicles have continued to climb in recent years, so too have the number of trim levels. “As carmakers increase the number of trim levels on their models, the price difference between the base and top trims also climbs. In some cases, the number of trims and the price difference has more than doubled over the past 15 years.”

Consumer Reports took a look at 4 different models and compared the price difference of the base model and most expensive trim level over the last fifteen years. For example, in 2003 the price difference between the base model and the highest trim level for the Ford F-150 was $17,500. Today, that same price difference has skyrocketed to $33,655. The same equation applies to the Honda CR-V, Mercedes-Benz C-Class Sedan, and the Subaru Forester.

Per Consumer Reports, “Auto-industry experts say that trim levels and option packages, frustrating though they may be, impose a necessary order to the growing number of features and conveniences available on cars today. Without them, they say, the sheer number of choices would become overwhelming for consumers and impossible for carmakers to deliver. For many car buyers, trim levels are at best confusing and at worst a frustrating way for car companies to bolster profits by bundling features in a way that forces us to buy things we don’t want to get the things we do.”



At Elio Motors, we plan on doing things differently. For starters, we will not offer trim levels. To keep costs down, we will produce 14 vehicles at the plant: 7 colors and 2 transmissions. From there, through our ePlus: My Elio, My Way option program, customers can pick their options a la carte, and without option packages. We believe that actually making an “option” an option, our customers will save money and be more content with their new vehicle.

 

[Coss]

Now if they would only update the webpage, all would be good.
But alas, it's low on the priority list (I've asked them) and like so many things, it will be done, when it's done.
Sorry, that's all the answer I could get from them. sigh...…..

 

[Ty]

So, same old 7 colors/2 transmissions = 14 different configurations. The Marshaling locations will be assembling the options.

1. Customer orders car at store location. To keep this simple: Red vehicle, automatic, red interior trim panels, black carpet, lighted door sill, leather seats
2. Store sends information to their nearby marshaling center.
3. Marshaling center receives order, pulls one each red automatic into the facility behind any of the other vehicles they are working on.
4. Marshaling center spends a few minutes removing the stock seats, putting in the leather ones, and snapping in the interior body panels and lighted door sill.
5. Marshaling center loads Elio into distribution truck for delivery when the store's orders are complete.
6. Store receives Elio either that night or the next morning depending on the marshaling center's delivery schedule.
7. Store preps Elio for purchaser - cleans it up, gasses it up, and preps the paperwork which should be minimal at this point.
8. Customer shows up after noon to pick up their Elio Rocket.

Thinking a little more on this. It MAY make sense to not install the standard seats in Shreveport if there is going to be a lot of upgraded seats sold. It wouldn't be hard to unbolt a seat but would save a little time at the marshaling center if they didn't have to unbolt the seat and remove it first. Further, these removed "stock" seats would surely NOT be needed at the marshaling center as every Elio coming through would have them installed already. So, if 10% of Elios sold end up with upgraded seats, you'll be shipping back a lot of stock seats which would then sort of be "used" seats. They'd still be used at the Shreveport factory but would be adding some uncertainty. If most Rockets are ordered with stock seats, this wouldn't be an issue.

A phased approach is probably best: Send Elios from Shreveport WITH stock seats. Eventually, each marshaling center would have an excess of stock seats on hand as people upgrade. At some point, it would make sense to NOT put seats in at the factory for a while until the marshaling centers have gone through their on-hand stock of regular seats. Then, the factory could start installing stock seats again till inventories are back up. This eliminates the shipping back of seats.

Of course, let's imagine there is a mid-level upgrade seat that people prefer MUCH more than the "stock" seat. Then, it would make sense for Shreveport to install the mid-level seat on every Elio and then the marshaling center wouldn't have to remove so many of them. Heck, Elio could even sell the car with the "stock" seat and to avoid the work of removing and reinstalling a seat, could just offer the mid-level seat as the new "stock" seat and allow people to select an option of a cheaper seat and price if they want... sort of opposite of what manufacturers do for the most part.

If you've read this far, congratulations. I tend to get a little wordy at times. I'll try to make them more interesting in the future for you fellow fans. I mean, this was interesting to me but I don't expect it to be interesting to everybody. Plus - lots of words here.

 

[Grumpy Cat]

Ty, you forgot to put in that wall of text about the rehashing of the average price of a car.

 

[Coss]

Shhhhhhhhhhhhh don't say anything, he'll keep thinking it's fresh

 

[Ty]

Not fresh. Just of interest at the moment.