Seems to me that the purposes of the non-refundable deposit are to provide a little working capital to Elio, but also to generate interest in other buyers and financiers. I doubt Elio is talking to banks in the traditional sense. What they need is equity investment, which is probably all private for the near term. Don't hold your breath for an IPO before vehicles start being delivered.I see several people with with $100 all-Ins planning to upgrade to $1000 later. I personally see this as the worst of both worlds:
1. I could get the same result with none of the initial risk. I.e. You decide to go $1000 all-in in 6 months. that same day I decide to do the same. I get my car the same time as you, but I didn't take the initial risk you did.
2. Because you 'have skin in the game." it could make you more likely to upgrade if you shouldn't. I.e. the company is still questionable in 6 months, but clearly looking like it will produce. It might be temping to go ahead and upgrade hoping to get a car. (Not everyone thinks this way but many do. I.e. the idea of something going to waste is a very strong psychological effect. The instinct of most people is to try and recover a "sunk cost".
- Everyone has their right to do as they please though. I realize many of these are sorta like a 'donation'. I.e. Hoping to help the companies chance of success.
*I disagree with the concept that all-in to show the company or banks that you are serious in following through with the purchase. a $1000 refundable deposit is over 14% of the final price. refundable or not I can't imagine someone putting that up without the intent of following through. (I.e. the major things I see causing someone to back out are: dissatisfied with final product, lack of patience, and personal financial reasons) Amount is extremely important in these decisions. For example I'd have a lot more faith in a $1000 refundable deposit than I would a $1 all in deposit. But it is true The "skin in the game" / "sunk cost" does have the tendency to feel more committed. In the end the bank will choose how to weigh each of these.
By the way, every deposit does cause 'skin in the game' so to speak. If the time frame was 2 years the $1000 deposit would forgo $100 in lost interest at simple interest rate of 5%. (This makes a good argument for the $100 all-in option, over a $1000 refundable).
Just curious anyone do a $250 or $500 all-in? I'd love to hear the reasoning. I really have trouble wrapping my mind around the decision behind either of those.