Securities And Exchange Commission Form 1-k - Filing Date: 2016-04-29

[Marshall]

The first step is being taken by reducing the incentive to 25%.

The next step is eliminating it altogether which should come close to the start of production which would place the current order without incentive at less than a year's wait.

If the production starts and proceeds as planned to about 1,000 a day. The last of the discounted vehicles should end around the first of 2018 and profitability would be increasing as the target production of 250,000 will be in operation making those economies of scale increase the profit margin.

Those waiting on their order who received no matches will not have to wait long. When production exceeds the orders, then they can begin stocking the storefronts with demonstration units and a new waive of orders will ensue.

 

[RUCRAYZE]

That's what I'm thinking too. It will be interesting to see if at some point they actually do stop taking reservations and whether there is a price jump.

Never stop taking reservations, announce a cut-off date (like the incentives) that will enable EM to stick to their "introductory" 6.8k and then make the upward adjustment.
Pleases all the reservationists, and Keeps EM in the plus decision making column (they need all they can get)

 

[RUCRAYZE]

Why do people expect EM to "honor" the $6800 price point for SIL/reservation holders? That seems entirely opposite of the cost breakdown of the vehicle.
If 1 Elio rolls off the assembly line, it will be $7600. If 250,000 roll off the assembly line, they will be $6800. This is not an arbitrary price point, but is entirely dependent on getting those economies of scale.

The Elio has $1000 of profit built-in to the cost of each one. So for a $1000 all-in reservation holder with 50% bonus, EM will only be making $500 per trike (less, actually, because the other $1000 has already been spent on daily operations costs). If they were to sell the SIL-holders $7600 Elios at $6800 each ($800 below-cost), they would be losing $300 on each of the 17,000 SIL-holders.

That's negative $5,100,000. And that isn't taking into account the fact that the $1000 reservation fee has already been spent, making the actual profit "losses" closer to $22,100,000.

No investor in their right mind would back a $22MM loss, when the contract Elio has already made with reservation holders guarantees them nothing in regard to final price.

If Elio can't reach 250k reservations (or close to it) prior to production starting, then the first people to get an Elio will be spending $7600-base. And the second-year buyers will be spending $6800 base. That is life.

Think supermarket "loss leader", eat the few 60K+/- and then adjust price

 

[Marshall]

Think supermarket "loss leader", eat the few 60K+/- and then adjust price

BINGO! We have a winner. Maybe they rolled the various matching programs into the sales budget since that was increased. There will be no better sales program than the 60K Elios on the road driven by the true believers.

 

[webartist]

Here are some observations from a novice and also an “All In”, big time, hope to be customer. I don’t feel startup companies should never bank on a profit per unit any time soon. It usually takes 2 – 3 years at least. Take Tesla for instance. I read the other day that for the current Tesla stock holders, every vehicle made thus far has cost the stock holder $620,000.00 each. Not a good ROI even at this point. I think Elio Motors should be thankful for the “All In” up front paid reservations and at least find some middle ground with the base price when production begins. At least for the already booked $1,000 “All In” reservations. Elio should go into production at a loss initially to get vehicles on the road and reward loyal customers, then address revised pricing over time

 

[Ekh]

Here are some observations from a novice and also an “All In”, big time, hope to be customer. I don’t feel startup companies should never bank on a profit per unit any time soon. It usually takes 2 – 3 years at least. Take Tesla for instance. I read the other day that for the current Tesla stock holders, every vehicle made thus far has cost the stock holder $620,000.00 each. Not a good ROI even at this point. I think Elio Motors should be thankful for the “All In” up front paid reservations and at least find some middle ground with the base price when production begins. At least for the already booked $1,000 “All In” reservations. Elio should go into production at a loss initially to get vehicles on the road and reward loyal customers, then address revised pricing over time

They simply don't have the resources to run at a loss. Payments are due, and they have to make everything they can to make those payments. When they start up they will have to have working capital to get the parts in house in the volume they require. If there a volume of sales goes up sharply enough, will be fine, but if it doesn't they are going to have a really Barren stretch from about month 10 to about month 24. At that point their inherent profitability should have their debt load reduced and profits rolling in. But it ain't going to be easy and there will be plenty of white knuckling.

 

[RUCRAYZE]

Here are some observations from a novice and also an “All In”, big time, hope to be customer. I don’t feel startup companies should never bank on a profit per unit any time soon. It usually takes 2 – 3 years at least. Take Tesla for instance. I read the other day that for the current Tesla stock holders, every vehicle made thus far has cost the stock holder $620,000.00 each. Not a good ROI even at this point. I think Elio Motors should be thankful for the “All In” up front paid reservations and at least find some middle ground with the base price when production begins. At least for the already booked $1,000 “All In” reservations. Elio should go into production at a loss initially to get vehicles on the road and reward loyal customers, then address revised pricing over time

Welcome from The PNW, glad to have you aboard. Great first post- hang around you have a lot to share

 

[outsydthebox]

I absolutely agree with your assessment!

I've reviewed all the posting's with regards to the probability of obtaining government financing, I just don't see a realistic pathway to the Feds becoming involved, especially in a presidential election year.

I've always felt private investment was the best way Elio Motors could potentially raise 240 million...(the new 312 million figure only further complicates matters).

I have no doubt Elio's suppliers & sub-contractors are currently evaluating the updated K-1 as we speak, which might leaded to the tightening of available credit for Elio Motors.

It's also important to remember that the K-1 is backwards looking...so there are further current details that Elio does not have to publicly disclose.

It all comes down to funding...

Do you really think they have enough cash on hand to compete development?

My question is...you have posted exactly "5" times here, and we are all supposed to view you as an expert?

Oh...Welcome to the forum

 

[outsydthebox]

Or maybe the fans will be self-flaming ... which ever!

Be sure and send us a selfie

 

[bunchathrees]

Here are some observations from a novice and also an “All In”, big time, hope to be customer. I don’t feel startup companies should never bank on a profit per unit any time soon. It usually takes 2 – 3 years at least. Take Tesla for instance. I read the other day that for the current Tesla stock holders, every vehicle made thus far has cost the stock holder $620,000.00 each. Not a good ROI even at this point. I think Elio Motors should be thankful for the “All In” up front paid reservations and at least find some middle ground with the base price when production begins. At least for the already booked $1,000 “All In” reservations. Elio should go into production at a loss initially to get vehicles on the road and reward loyal customers, then address revised pricing over time

That big number ($620,000/car) doesn't seem correct. Here is one source which claims the loss is closer to $4000. That may only be for this last year though. Tesla loses HOW MUCH on every car sold?!

Looking at only their liabilities from the latest 8-K (ignoring cash, asset valuation, etc): ($8.2B). They've sold roughly 130,000 cars. That's ($63K)/car - an order of magnitude lower than your quoted number. And while this is technically true, as I stated, it doesn't account for any assets.