Elio Motors, The Next Big Thing?!!...

[IamIan]

Originally Posted by ME_Andy

I'm sure the $185M Advanced Technology Vehicle Manufacturing loan is the biggest chunk of that.

Which in itself automatically disqualifies Elio for that loan.

Short version = If you need it you don't qualify.

Here are a few excerpts of the loan requirements I see as being significant obstacles for Elio:

1. "The applicant has a net present value which is positive, taking all costs, existing and future, into account."
   
2. "The Secretary shall provide facility funding awards under this section to automobile manufacturers and component suppliers to pay not more than 30 percent of the cost of— reequipping, expanding, or establishing a manufacturing facility in the United States to produce— qualifying advanced technology vehicles."
   
3. "financial projections demonstrating the applicant’s solvency through the period of time that the loan is outstanding."

#3> This is a hard sell ... it's a new company .. with a new (unproven) product type ... and their aim is for 50,000+ units per year... Proving that there are over 50,000+ people who will buy the unknown product from the unknown company for the multiple years of the loan ... that will be hard.

#2> Sense 30% is the max .. and they want $185 Million ... that means they have to prove they already have over the other 70% about ~$370 Million ... Which they don't have.

#1> AFAIK I doubt Elio at present is net positive at all ... especially taking all those costs in the future into account ... I'm sure they would like to reach that point in the future ... but , the loan requires them to be net positive for all those future costs at present = today ... Today they have to be net positive (able to afford) after repaying the loan itself , and any other loan , and employee wages, parts, etc... etc ... for the future period of the loan... They do not met this requirement.

[bannie]

Elio motors likely won't make it to a full production with their current business model.


They are trying too hard to fly before they can even walk good. Biting off FAR more than they can chew right at the start-up!

First of all, they have working prototypes, but none that seem to be running good on their proprietary engine - at least none that I've seen in operation.

They have ZERO Production-Based CASH FLOW.

As far as most new manufacturers are concerned, they need to begin the company, the design, and the production progressively as time goes on...

FIRST, they have to get the design development nailed down.

SECOND, They need to do initial production cost estimates based on LOW PRODUCTION BATCH SIZES. Due to low scale, there is no "economy of scale" and costs will be closer to $10,000 to $15,000!

They need to START PRODUCING & SELLING these products AS SOON AS POSSIBLE, and selling them at the $10,000+ mark to start generating cash flow and more importantly to PROVE there is market demand.

Once they start PRODUCING, there will be more investors willing to jump on board - generating more income to ramp-up production and improve production economy by larger scale production!

What does this mean? It means they likely will have to begin production with an earlier prototype engine - from a different supplier, and THEN move to their more in-house proprietary supplied engine design as investment increases, and production capacity improves.

Only then will it likely become commercially viable, and only then will Elio be able to take off (after reducing their per-unit cost via economy of large scale production).

Numerous other manufacturers started out this very same way.

[NeilBlanchard]

Bannie, I think you have said what I have been thinking.

The next step is to build their P5, and use the prototype engine. And drive it, and build another ... and test it.

[oil pan 4]

They should just use an engine that actually works and forget about building their own proprietary engine for now.

If they used a well known Japanese motor cycle engine people might be more likely to buy these, as opposed to using their own engine that no one knows anything about besides it being prone to breakdowns.

There is no need to reinvent the wheel.

[doclees]

Any update on the P4? The last blog was October. I get email about the helmet law stuff. I was disappointed to see the website says 90% North American made and not US made. Any crystal ball predictions on production date?

[mikeyjd]

Originally Posted by doclees

Any crystal ball predictions on production date?

My magic 8 ball has a prediction for you.

[Fat Charlie]

What does a crappy email server have to do with Elio?

[cRiPpLe_rOoStEr]

Originally Posted by oil pan 4

If they used a well known Japanese motor cycle engine people might be more likely to buy these, as opposed to using their own engine that no one knows anything about besides it being prone to breakdowns.

Sometimes I wonder how a Yamaha XT 660 engine would fare into a small car. Maybe the Elio would be a nice test mule for that...

[razordave]

How about the myt so you can tow a semi trailer?

[rmay635703]

Originally Posted by cRiPpLe_rOoStEr

Sometimes I wonder how a Yamaha XT 660 engine would fare into a small car. Maybe the Elio would be a nice test mule for that...

A cycle motor would need lots of geometry changes to be usable in a car.

Cycles need short burst of HP at hi revs for short periods, cars need the opposite.

The cycle motor if "detuned" would likely survive OK but it would always burn more gas.