No Guarantees...

[Bilbo B]

That is essentially true, but it is missing some vital information. Why does Racer Trust need a guarantee from Elio that they will produce 1500 jobs? Because Racer Trust is on the hook to Caddo Parish for those jobs as part of Racer's deal with Caddo. Caddo did the deal because they were promised the jobs. For a variety of reasons, the deal between Elio and Caddo fell through, but when Racer stepped into the middle, the resulting two deals come pretty close to the original anticipated deal. What we now have is: Elio promises jobs to Racer. Racer promises jobs to Caddo. Without that guarantee, Racer would not have been able to get the plant. But you are correct, Elio does not have a contract with Caddo.

My understanding is Racer is also working on leasing other parts of the building/complex (not sure if it's all one huge building or not) to help meet their commitment to Caddo. That doesn't take EM off the hook, but unless Racer has someone else ready to use the EM space, there's not a lot of reason for them to squeeze EM.

 

[Ekh]

Confidence in the ATVM loan guarantee is running very high -- basically, it appears that if they can demo via physical testing that they meet the 75 mpg target, they're in. And they are 100% confident they can meet that target ... they just have to build the E-cars to do it with! For that they need the crowd-funding dollars. Like, right away!

 

[Ekh]

You win the internet today.

I think the same comments are true regarding the Reg A+ funding about to take place. Elio has clearly stated that this is a high-risk investment, that the ongoing viability of the company as a going concern is questionable, that production dates and future financing are targets that may not be met, and that the $12 share of stock will be diluted (lose value) down to below zero as soon as it is issued.

This investment is for the person who firmly believes in the idea, the man, and the company, and is willing to risk it all on a single roll of the dice. It is not an investment for the timid or the complainer.

Being timid and being prudent are not the same thing, though they may overlap. And good luck stoping the infantile whiners on the internet from complaining when a high-risk investment goes south.

That said, I am personally on the fence. I'm into Elio for a thou already, and could maybe have squeaked another $300 just to show support. But the $600 minimum for a hugely risky venture is something I'm reluctant to undertake. I'm not risk-averse, and don't whine (much) when things go south -- but truly, investing in Elio carries more risk than I'm willing to run -- if some money shows up soon, sure, but it isn't likely at this point.

Careful consideration of risk versus reward (tangible and intangible rewards) isn't timidity. It's adult decision-making.

 

[JEBar]

Confidence in the ATVM loan guarantee is running very high -- basically, it appears that if they can demo via physical testing that they meet the 75 mpg target, they're in. And they are 100% confident they can meet that target ... they just have to build the E-cars to do it with! For that they need the crowd-funding dollars. Like, right away!

I don't know that the have to produce all of the E-series to accomplish meeting the ATVM .... they might be able to get by with only having to produce one to use for mileage testing .... if push comes to shove, I wonder if they couldn't just use the P5 .... no matter what is necessary, I have no doubt that they will do what they can to speed up the process

 

[cantwait]

Being timid and being prudent are not the same thing, though they may overlap. And good luck stoping the infantile whiners on the internet from complaining when a high-risk investment goes south.

That said, I am personally on the fence. I'm into Elio for a thou already, and could maybe have squeaked another $300 just to show support. But the $600 minimum for a hugely risky venture is something I'm reluctant to undertake. I'm not risk-averse, and don't whine (much) when things go south -- but truly, investing in Elio carries more risk than I'm willing to run -- if some money shows up soon, sure, but it isn't likely at this point.

Careful consideration of risk versus reward (tangible and intangible rewards) isn't timidity. It's adult decision-making.

Fair enough. Perhaps I should have stated that the investment was only appropriate for those financially willing and able to take a 100% loss on investment?

 

[cantwait]

Confidence in the ATVM loan guarantee is running very high -- basically, it appears that if they can demo via physical testing that they meet the 75 mpg target, they're in. And they are 100% confident they can meet that target ... they just have to build the E-cars to do it with! For that they need the crowd-funding dollars. Like, right away!

Could I ask where you are getting your information?
Do you have independent confirmation that the ATVM is a slam dunk if the P5 or the E's get 75mpg?

From the SEC resubmission, it does look like Elio is not expecting to start working on the funding for the additional $240 million until the E's are built and tested, so it seems reasonable that that information would go to the ATVM people as soon as possible.

I think they'll need a couple of E-cars for the mpg testing. P5 isn't set up for it -- and has a governor, to boot. Though that could be taken off, I suppose.

Where did you see that the P5 has a governor? I must have missed that.

 

[John Painter]

Nor would a lot of other reservationists. It is a typical part of a startup's marketing strategy to get early adopter reservations to show venture capitalists there is demand for the concept. I actually believed Paul Elio's we have the funding back in 2014 and his 2014-15 production schedule and really knew better having put refundable deposits down on a couple of concepts that turned to vaporware.

The Elio will probably make it to production (2018 is my guess because crap will happen when the 15 month production schedule actually starts) because of the 45,000 + reservations and their continued support, although no guarantees according to EM's SEC filing document and contracts with new reservationists. I've been following Elio since '08 and getting a little weary supporting the effort, but still do with a pinch of skepticism.

Let's wait and see how the LA Auto Show P5 Reveal goes before we get overly critical. The P5 photos look promising to date and hope it doesn't turn out to be:
View attachment 7412

Rick did you forgot the 1/4 teaspoon of reality for automotive start ups with that pinch of skepticism?

 

[Rickb]

I would like to take exception with the claim of a guarantee to Cado Parish.
No such guarantee was made to Cado Parish.
It was made to RACER Trust.

Speaking of take exception, the Caddo Parrish Commissioners and some reservationists took exception to the fact that EM didn't meet their promissory contract obligations of providing 1500 jobs and tooling the plant to build Elios regardless of who EM had contracted with. Will Caddo/Racer Trust offer EM yet another extension without penalties with the new schedule pushing production out to 2017 and that's only if things go according to schedule? I think production may easily push into 2018 or beyond.

 

[John Painter]

That is essentially true, but it is missing some vital information. Why does Racer Trust need a guarantee from Elio that they will produce 1500 jobs? Because Racer Trust is on the hook to Caddo Parish for those jobs as part of Racer's deal with Caddo. Caddo did the deal because they were promised the jobs. For a variety of reasons, the deal between Elio and Caddo fell through, but when Racer stepped into the middle, the resulting two deals come pretty close to the original anticipated deal. What we now have is: Elio promises jobs to Racer. Racer promises jobs to Caddo. Without that guarantee, Racer would not have been able to get the plant. But you are correct, Elio does not have a contract with Caddo.

You have some things very mixed up. Not that much of the whole deal in Shreveport is easy to follow, but in a nutshell the following is how Elio Motors was able to lease the former GM Hummer plant in Shreveport.

Pretext: Caddo Parish gave the land the former GM Hummer plant is on to GM because of GM's promise to bring lots of high paying manufacturing jobs to the Parish. Which they did, for awhile. From this point onwards, the chain of events and ownership of the property and improvements to it is harder to follow.
1) RACER Trust was created by the US Bankruptcy Court to deal with all the automotive industry fall-out after the recession. They are also required to take the local communities wishes into consideration as part of their mandate to return large bankruptcy properties to productive use.
2) Caddo Parish created a separate entity called the Industrial Development Board (IDB) to separate the Parish directly from potential liabilities and purchased the former GM plant from RACER Trust for a rock bottom price $7.5million, (with strings attached), strings include the need to create jobs, with some preference to manufacturing especially automotive. Caddo Parish agreed to that because they had (have) a scrap offer of $8 million on the plant, and over $4 million for the land it sits on.
3) Stu Lichter (Angel investor for Elio Motors) who owns Industrial Realty Group (IRG) is leasing the former GM plant from Caddo Parish's Industrial Development Board (IDB) for $25,000/month, to keep things real, in the fourth year of leasing the plant IRG's rent will balloon to $725,000/year. [This was done to keep a fire under Stu Lichter to get the entire property back into use, even if Elio can't start production.]
4) Elio Motors is "subletting" the factory space from IRG, and was able to "purchase" the used manufacturing equipment for manufacturing vehicles (this is a string) at a rock bottom price [basically they did not pay for it, well they did, on paper, but it's to come out on the end when they sell excess equipment.] To be more clear, part of RACER Trust's requirement is that they recoup $2.2million by this past September for equipment "sold" to Elio Motors, or IRG (aka Elio Motors Angel investor) would face mounting penalties for not paying up. [the specifics are not published, and I believe part of a NDA.]
5) Part of Elio Motors agreement (through IRG) with both RACER Trust and IDB for subletting the space at a very reasonable price and "purchasing" a large amount of equipment is that it would have made a payment on the equipment, and begin hiring 1,500 within 36 months from the signing of the deal with Caddo Parish's IDB, or face a stiff fine of $5,000 for each of those 1,500 jobs not filled (have you done the math yet?). This past spring, Elio asked for and received an extension from RACER Trust on making their equipment payment, but not on hiring. Elio Motors will need to begin hiring no later than August 2016 or face the fine's for each job not created as they agreed.

Most of this is easily found, after hours of drudgery reading through meeting minutes of Caddo Parish, as well as some of the published notes of RACER Trust, and to a lesser extent the press.

PS: I think Elio Motors had some significant backers lined up in 2012/13 that would have allowed them to do what they are just getting to now. I think the relatively brief, vitriolic and pointless law suit by former Caddo Commissioner Stephaine Lynch back in 2013 virtually derailed and almost caused Elio Motors to fail. That the company did not fail, so far, is, in my opinion one the things I think significant to the Elio story, and a good sign as to the company desire to get to production.

 

[WilliamH]

Speaking of take exception, the Caddo Parrish Commissioners and some reservationists took exception to the fact that EM didn't meet their promissory contract obligations of providing 1500 jobs and tooling the plant to build Elios regardless of who EM had contracted with. Will Caddo/Racer Trust offer EM yet another extension without penalties with the new schedule pushing production out to 2017 and that's only if things go according to schedule? I think production may easily push into 2018 or beyond.

Try reading this Press Release ---> http://www.eliomotors.com/press-release-elio-completes-plant-deal/ <--- from Elio. It is pretty close to what I dug up from other sources other than the fact that I found the deal with IRG saved Cado Parish the cost of ripping down the old plant.