What's The Plan For Raising $230 Million?

[OldAFGuy]

I've been seeing a lot of excitement over the $25 mil stock offering to fund the E-series prototypes. But I don't see much talk of where the $230 million to start production is coming from. Seriously almost 1/3 of a BILLION dollars just to begin production?

I know for a fact the old Lehman Harley conversion factory in South Dakota is idle. They were pumping out about 10,000 trikes per year at their peak. Why not just buy that with some of the money and start low-volume production then build up? I know the price would be higher to start but heck more than half the people on the reservation list would pay way more than $6800 to get an Elio a couple of years early.

Starting small and increasing production along with demand seems to be the way most businesses start and grow including the big auto companies. Sure you don't get the economies of scale but it seems backwards to say if we (Elio) can't start at the same scale as GM then we can't do it at all.

So two questions: where is the $230 million coming from and Why can't they start small and grow?

OldAFGuy

 

[slinches]

I think the only information we have on where the production funding will come from is either the ATVM loan or the other two "alternative funding paths" that PE has alluded to on numerous occasions (with absolutely no details as to what those are).

 

[bowers baldwin]

I've been seeing a lot of excitement over the $25 mil stock offering to fund the E-series prototypes. But I don't see much talk of where the $230 million to start production is coming from. Seriously almost 1/3 of a BILLION dollars just to begin production?

I know for a fact the old Lehman Harley conversion factory in South Dakota is idle. They were pumping out about 10,000 trikes per year at their peak. Why not just buy that with some of the money and start low-volume production then build up? I know the price would be higher to start but heck more than half the people on the reservation list would pay way more than $6800 to get an Elio a couple of years early.

Starting small and increasing production along with demand seems to be the way most businesses start and grow including the big auto companies. Sure you don't get the economies of scale but it seems backwards to say if we (Elio) can't start at the same scale as GM then we can't do it at all.

So two questions: where is the $230 million coming from and Why can't they start small and grow?

OldAFGuy

I think I can touch on the why not start small question, if you only build a few the cost per unit would be ridiculously high, $6800 would be out the window, no one would buy an Elio at say $35,000 (they'd be crazy to), there's a reason you can buy a light bulb for $4, if they had to tool up to only sell a few then that same bulb would be in the hundreds of dollars. Take custom motorcycles, I bought my brand new bike for $6000, now I can look at a similar bike, but custom built, now it's $30,000. Sure you get a one-off one-of-a-kind bike, but the cost is crazy. The reason the Model T sold well was the price, and the reason the price was low was because they sold 20+ million of them.

 

[Ty]

I've been seeing a lot of excitement over the $25 mil stock offering to fund the E-series prototypes. But I don't see much talk of where the $230 million to start production is coming from. Seriously almost 1/3 of a BILLION dollars just to begin production?

I know for a fact the old Lehman Harley conversion factory in South Dakota is idle. They were pumping out about 10,000 trikes per year at their peak. Why not just buy that with some of the money and start low-volume production then build up? I know the price would be higher to start but heck more than half the people on the reservation list would pay way more than $6800 to get an Elio a couple of years early.

Starting small and increasing production along with demand seems to be the way most businesses start and grow including the big auto companies. Sure you don't get the economies of scale but it seems backwards to say if we (Elio) can't start at the same scale as GM then we can't do it at all.

So two questions: where is the $230 million coming from and Why can't they start small and grow?

OldAFGuy

How does that save money over the factory that is already in hand? They COULD just build Elios in the factory that they already have with the equipment they already have. The $230M isn't to purchase a factory and equipment, it's for paying for the materials and parts that make up the Elio, the testing that needs to be done, and the initial hiring of people. None of that is saved by going to a low volume plant that would be another expense.

 

[Coss]

I've been seeing a lot of excitement over the $25 mil stock offering to fund the E-series prototypes. But I don't see much talk of where the $230 million to start production is coming from. Seriously almost 1/3 of a BILLION dollars just to begin production?

I know for a fact the old Lehman Harley conversion factory in South Dakota is idle. They were pumping out about 10,000 trikes per year at their peak. Why not just buy that with some of the money and start low-volume production then build up? I know the price would be higher to start but heck more than half the people on the reservation list would pay way more than $6800 to get an Elio a couple of years early.

Starting small and increasing production along with demand seems to be the way most businesses start and grow including the big auto companies. Sure you don't get the economies of scale but it seems backwards to say if we (Elio) can't start at the same scale as GM then we can't do it at all.

So two questions: where is the $230 million coming from and Why can't they start small and grow?

OldAFGuy

There are a lot of different threads in which this very same subject has been discussed in this forum.
In short, unless you have some type of inside track to the Elio Motors & Paul Elio's "inner circle" no one knows all of the in's and out's of their financial plans and holdings. So while it seems like a good idea to you, EM and PE have no plans to go in the direction you proposed.
As for a couple of years early; from the current information that we have which they released production is starting Q4 for 2016; it was in the SEC filing.
Hopefully this answers your question.

 

[Jeff Porter]

I've been seeing a lot of excitement over the $25 mil stock offering to fund the E-series prototypes. But I don't see much talk of where the $230 million to start production is coming from. Seriously almost 1/3 of a BILLION dollars just to begin production?

I know for a fact the old Lehman Harley conversion factory in South Dakota is idle. They were pumping out about 10,000 trikes per year at their peak. Why not just buy that with some of the money and start low-volume production then build up? I know the price would be higher to start but heck more than half the people on the reservation list would pay way more than $6800 to get an Elio a couple of years early.

Starting small and increasing production along with demand seems to be the way most businesses start and grow including the big auto companies. Sure you don't get the economies of scale but it seems backwards to say if we (Elio) can't start at the same scale as GM then we can't do it at all.

So two questions: where is the $230 million coming from and Why can't they start small and grow?

OldAFGuy

Yeah Paul Elio has a deal in place where they are leasing the plant in Shreveport, LA. No sense in going back on that lease and looking at another facility. The lease has been in place for a long time... at least 1.5 yrs and maybe longer.

As far as starting small and increasing production along with demand, as has been stated above, you can't charge $6800 or even $7600 with low volume production. One of Elio's ultimate goals is $6800 for the base price of the vehicle. Only way you can get that is getting up to peak production capacity during the first 4-6 months.

So IF Elio hadn't leased a plant yet and IF one of the main objectives wasn't $6800, then your proposal would be worth considering.

I get what you mean about it seeming strange to start at the same scale as GM, but the demand will be there.

 

[RUCRAYZE]

I think I can touch on the why not start small question, if you only build a few the cost per unit would be ridiculously high, $6800 would be out the window, no one would buy an Elio at say $35,000 (they'd be crazy to), there's a reason you can buy a light bulb for $4, if they had to tool up to only sell a few then that same bulb would be in the hundreds of dollars. Take custom motorcycles, I bought my brand new bike for $6000, now I can look at a similar bike, but custom built, now it's $30,000. Sure you get a one-off one-of-a-kind bike, but the cost is crazy. The reason the Model T sold well was the price, and the reason the price was low was because they sold 20+ million of them.

and to my consternation- no Yellow!!

 

[bowers baldwin]

and to my consternation- no Yellow!!

You can totally have yellow!, might I suggest some masking tape also..

 

[Ty]

and to my consternation- no Yellow!!

LOL.

Shoot, buy a white one and paint it... it's cheap enough that you'll have money enough for Earl Shives to paint it.

 

[pistonboy]

Paint your "experienced" vehicle with Rustoleum textured paint called "Hammered". It has a textured surface that covers up irregularities very well.