On Two Wheels

Published on January 16th, 2015 | by Christopher DeMorro

25

Elio Production Delayed Again, This Time Until “Mid 2016”

January 16th, 2015 by  
 

elio

2015 was supposed to be the year that Elio Motors delivered its long-anticipated 84 MPG trike, but alas, it’s not to be. KSLA reports that Paul Elio, CEO of Elio Motors, says production of his 84 MPG trike has been push back from mid-2015 to “early 2016” citing a lack of about $240 million. And until Elio gets that money, even the 2016 production date is tentative at best.

It’s a dreary admission from the often-bullish Elio, who has proposed selling his 84 MPG, two-seater trike for as little as $6,800. 2015 looked to be off to a good start for Elio with the release of their engine design, but with production pushed back at least a year, the difficulties of building a brand new vehicle are starting to become apparent. Despite owning a surplus of equipment and a former GM factory, Elio has yet to secure either a major investor or a line of government credit.

Elio had planned to raise the cash itself, through the sale of old equipment, but it’s been slow going. The startup is also pursuing $185 million from the just-revived Advanced Technology Vehicle Manufacturing (ATVM) loan program, and has cleared the first round of questioning. There’s a lot of competition for that government green though, and while indications seem positive, there’s no way of knowing when they’ll get the money.

Thankfully, Elio has received a six-month extension on a requirement to employ 1,500 people by the end of this year. But while Paul Elio remains sure that his three-wheeler will be built, I can’t help but wonder how many of the 13,000 38,000 reservation holders share his confidence after this latest delay.





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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.



  • John Painter

    Actually as of January 11th there are
    38,405 reservation holders for an Elio. While hard to wait in this age of instant gratification, I appreciate Mr. Elio’s quick discussion of both good and bad news (in this case) and can’t think of too many other CEO’s who strive to be as transparent. Disappointed yes, disillusioned – not even close.

  • Pingback: Elio Motors, The Next Big Thing?!!... - Page 87 - Fuel Economy, Hypermiling, EcoModding News and Forum - EcoModder.com()

  • That 38,000 reservation number seems way low … Acura was quoting a similar figure for the TLX, after just a few weeks of advertising.

    • Eric Goggans

      Apples and oranges. 3 wheeled niche product vs. run of the mill semi-luxury saloon.

      • Right, but Elio thinks they’ll sell 250,000 niche products per YEAR, putting them firmly in the top 10 sales charts … so, did you just say they have no chance? It seems like you think they have no chance.

        • Eric Goggans

          Basically they are Coda, but they may actually pull down the Federal pork. We shall see.

          • Even with the pork, they need to unload the 250,000 or so cycles they build somewhere.

          • Akagi_Shigeru

            So even if they get exactly what they need to bring the product to market, their projected sales figures are to far outside the possibility of what’s realistic that they’re going to tank anyway.

            So the best one could hope for is to get one of the early models, hope they don’t discover any crippling flaws or safety issues that got overlooked/unnoticed, and score a bunch of replacement parts as soon as they can before the supply dries up. The scrap value on these things has got to be negligible.

          • I feel like this may be correct.

  • BlackTalon53 .

    That is not good … by now a VW Polo TDI Blue Motion also gets 84mpg, and it is a “real” car with four seats and a trunk. Are people really going to want to be seen in a vehicle whose only real virtue is it cheap sticker price? Tata once went down the same route with the Nano, and it was a stunning flop, even in India, where most people only can afford to ride scooters. I still hope it works out for Elio though, it is a pretty cool concept.

    • John Painter

      I’ve seen Blue Motion VW’s in Hungary, however VW as far as I know has no intention of selling them in the US and they cost roughly 4 times what the Elio is targeted to cost, and it runs on diesel about a buck more than gas right now. I’ve owned several Jetta’s but I would like to give a US company some business.

  • Ray Dios Haque

    So he bought a factory full of auto equipment from a failed car factory and he is trying to peddle it to other car factories so that he can start his own car factory. I was sort of hoping that the whole story of selling off these factory parts was to show people how resourceful and “green” they are. I had thought they were banking the company on the acquisition of that government loan. But now it’s a crap shoot between selling useless machinery through their blog (good luck?), getting that loan (hopeful), or finding an investor (not going to happen). I am hopeful that they can pull it off. I would like to own one of these. But I am not sure that I want to wait around another year+ before getting a new car.

    And to set the record straight @blacktalon53:disqus …
    The Polo BlueMotion runs on diesel and doesn’t appear to be offered in the United States. That’s a nice car, and I am all for diesel. But I will never get a chance to own one, so I don’t care. And the Tata Nano will never show up in the States, because it’s made out of cheese and bubble gum. From Wikipedia, “In 2014 a Nano was crashed for NCAP by ADAC in Germany. Despite Tata’s claim that it was expecting 4 stars, the Nano actually achieved zero stars”. No way would it pass any safety tests in the USA.

    @joborras:disqus
    I agree on the 38k number. This is why I don’t think that they will find anyone to drop $200 million on them.

  • Alec Sevins

    Optimism is needed for any venture like this, so let’s stay on that track.

    It’s unfortunate that so many investors don’t understand that “energy independence” from U.S. shale drilling is a mindless denial of ERoEI math. Kerogen can’t be fracked like Bakken or Eagle Ford and oil-bearing shale is only worth a few years of total U.S. consumption. Current low gas prices are caused by slacking global demand plus marginal additions from the U.S., combined with OPEC deliberately keeping production high and flooding the market. If those complexities could be understood by the average fuel buyer we’d see more funding for high MPG vehicles. Every second there is less oil in the ground and it’s a crime to waste it for shortsighted reasons.

  • R A

    This isn’t the first time Elio applied for a DoE loan…. they first applied for one in 2009. And they’ll probably be denied just like they were on the first one. And they’re most likely having a problem finding serious investors because their profit margins are way too small for anyone to hope to receive a timely return on their investment. I think that ultimately, they’ll end up losing the lease on the Shreveport plant because, for Caddo Parrish, it’s all about job creation. That’s the whole reason behind them buying the plant from Racer Trust. And with this latest delay, they now KNOW that Elio isn’t going to be doing any hiring for at least another year.

  • James

    Hmmm seems like a too small niche vehicle to be sustainable.
    Even if all 38,000 were made and sold, who would buy the next 38,000?

    • Budsygus

      Assuming he’s able to deliver on promises at or near the promised price point, I would be one of the next 38,000. I decided against putting down any money up front, but I’m still very interested. Unfortunately all this news is pretty discouraging. I still really hope they succeed, but it’s seeming less and less likely.

  • Josh McNattin

    I’m having a hard time believing this project is going to make it now. I guess if he could convince all his reservation holders to put up the cash up front he’d have the money…but that’s not going to happen.

  • Elio seems to be moving along with securing funding for the production phase hiring Corporate Fuel Securities, purchasing a manufacturing plant in Shreveport, development of it’s new engine, and eventual production in the coming year. If you really want to support Elio why not sign the We The People petition in support of their receiving an ATVM loan https://petitions.whitehouse.gov/petition/support-elio-motors-atvm-loan-application/f3Z4sM1L

    • R A

      Elio should have taken THAT particular funding route a few yrs ago instead of waiting so long. A bit “too little, too late” at this point. And a fyi… they don’t own the plant…. they talked Shreveport Commissioners into purchasing the plant who in turn have rented it to IRG who has, in turn, subleased a portion of it to Elio.

      • johnpainter

        Correct, sort of. Elio Motors does not own the Shreveport plant, though they did purchase a number of the machines on the line they have leased from IRG. However Stuart Lichter who is the President of IRG, is on the Board Directors of Elio Motors and his company IRG did sublet part of the plant to Elio Motors. Convoluted though not unusual in business.

        • R A

          there is no “sort of” correct to it. It is absolutely correct. And yes, they purchased surplus equipment from Racer Trust prior to Caddo Parrish’s purchase of the plant. There have been different estimates floating around about how much the used equipment EM is trying to sell off is worth. Caddo Commissioner John Escude has said it’s worth as much as $400 million…. others have said $100-$120 million. Mr Elio said in one article that he expected to bring in a PROFIT of between $30 to $40 million. Yet, In the MINUTES OF THE MEETING OF THE CADDO PARISH COMMISSION’S PARISH & URBAN ECONOMIC DEVELOPMENT COMMITTEE HELD ON THE 2nd OF AUGUST, 2013, Mr. Bruce Rasher, of Racer Trust said that the value of the equipment that was sold to Elio Motors was was $26 million. So there is no way that Elio will net $100 million from the sale of that equipment. He’ll be lucky if he actually get’s $26 million for it.
          Here is the quote from the minutes… “Ms. Lynch would also like to know who would be responsible for the upkeep of the property. Mr. Rasher said Mr. Lichter would have to maintain it. This does not include the 90 acres in surplus which the Parish would have to maintain.

          She also inquired about the value of the equipment that was sold to Elio Motors. Mr. Rasher said that the value was $26 million, and it was all sold to Elio Motors. Elio Motors paid $3 million six months ago; the next payment that is due is the $2.2 million payment for equipment. Three months later, a payment of approximately $175,000 per month is to be paid. The final payment should be made approximately 30 months from now.”

          According to those figures, Elio will have paid just a little under $10.5 million for the surplus equipment…. about half of what the fair market value of the equipment is worth. For a liquidation under Chapter 7 restructuring, that sounds about right. Even if he sells it all, it won’t put much of a dent in the overall total in capital that he needs in order to start production. Yet he is, at best, ALLOWING people to believe that the value of the equipment is in the hundreds of million dollar range. At worst, he’s flat out lying.

          • R A

            Here is what Mr Elio says in an interview with KSLA…. “”The other thing that has happened for us is that we’ve bought all of the assets out of the GM bankruptcy, the day we bought it, quite honestly, I overpaid a little.”

            Though Elio explained, after prices naturally appreciated, the equipment is now worth a lot more than they paid. After partnering with Comau, who participates in the manufacturing of 1 out of 3 vehicles in the world, the company now has $17 million worth of equipment for sale at their Ebay store, Elio said. What is currently listed represents less than 15% of the surplus assets that the company intends to sell.”

            http://www.ksla.com/story/27863047/elio-motors-announces-delay-production-expected-to-start-in-2016

            That is a outright LIE!

  • Jones2112

    I was going to get in line to get one these but I’m not waiting for 2 years and then be told my money has vaporized and the Elio concept is history. Instead I think I’ll buy a used Can Am which I can get today without risk!

  • BEN THERIAN

    Suckers line up and pay here…..LOL. This will never come to production. He’s been parading this single car around for 3 years. This will NEVER happen. Investors, say goodbye to your money. There’s one born every minute!

  • Common Sense

    Yeah,wow this article is 10 mnths old now , been waiting and waiting , and not even a updated image of the final production car, I feel like a kid waiting for a dead beat dad to come back.

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