Elio Motors Q+A w/ Paul Elio … the Q Part

Elio Motors' Mall Display

Two weeks ago, Chip from Elio Motors reached out to us here at Gas 2, and we reached right back, asking for a Q&A style interview with Elio Motors and, if he had time for us, with Paul Elio, himself. They (Elio) seemed up for the Q&A, and I figured our readers would have some good ideas about what would make for a good interview. After opening up the floor comments to questions, I picked a few of my favorites and included them in the Q section, below. Enjoy!

 

My Questions for Elio Motors


Q1.   The trike has been promoted heavily as having a $6800 MSRP, and being made available with air conditioning, power windows, stereo, two seats, 3 airbags, stability control, and ABS (I’ll assume cruise control is in there, as well). Is all that going to be standard at the $6800 price, or will some of those features be optional?

Q2.   The latest news out of Shreveport seems to indicate that Elio Motors still needs to raise between $145 and $200 million. Is that accurate and, if so, how do you plan to raise the rest of the money you need?

Q3.   Assuming you’re able to raise the startup money you need by the end of this year, will you then be on track to start hiring the UAW workers in Shreveport who lost their jobs in the GM bankruptcy?

Q4.   Assuming you’re not able to raise the startup money, what happens to the deposits you’ve collected so far? What systems and safeguards are in place to ensure that your depositors get their money back?

Q5.   Why go to the trouble of building your own engine? Why not make a deal with Honda or Suzuki or Polaris to get some Kei car or CARB-approved ATV engines?

Q6.   Speaking of engines, in the financials that the Caddo Parish made public last year, you showed $150 per vehicle for “Warranty and Liability”. Since $150 won’t get you very far at most repair shops (even PepBoys), how do you see that $150 covering a trike for – let’s say 3 year/36K miles?

Q7.   In that same document, you say that you anticipate selling 250,000 units annually through just 120 stores with 5 employees each. That’s 35 units received, prepped, inspected, sold, closed, detailed, and delivered per month, per employee, per dealership. How did you come up with that number, and why do you think it’s realistic?

Q8.   Assuming all of that stuff gets sorted out and Elio becomes a huge success. How do you see the Elio line expanding down the road? In other words: Where do you go from there, as a brand?

Q9.   In the photos Neil took at one of your mall displays two weeks ago, the Elio mule was wearing motorcycle tags. Is it still the case that Elio owners might have to carry motorcycle licenses in order to drive the vehicle on public roads?

 

Reader Questions for Elio Motors


One of our readers, Kirk Johansen, pointed out that the “prototype” Elio trikes shown so far were not, in fact, “prototypes”. Rather, they’re “mules”, which lack critical mechanical components like the Elio engine and production spec. transmission. Despite the semantic nature of the argument, the core question (as I read it) remains valid:

Q.   Since the Elio has been described as being “80% off the shelf technology”, how soon can we expect to see a production-spec. running prototype prototype?

 

Another reader, calling himself “John D“, wants to know a bit about the Elio Motors’ market research and overhead to this point. The second question, as written by John D., reads “What is Paul Elio’s annual salary, and any other compensation?” but I’ve tried to ask it in a more politic fashion, along the lines of “How much of my contribution actually goes to cancer research and how much goes to overhead?”:

Q1.   (two parts) What kind of market research did you/Elio Motors do to convince yourself that there was such a huge demand for a three-wheeled vehicle? How would that demand change if the starting price was $10K or $15K?

Q2.   According to some sources, Elio Motors had raised some $45 million (if not more). How much of that money is currently being spent on executive salaries, expense accounts, etc., and how much of it is actually going towards tooling, manufacturing, etc.?

 

A reader calling himself “How Much is Enough” wants to know how much skin Elio Motors’ executives and board members have in the game, which seems like a fair question to ask of a company that’s asking people to put their money down without getting to take anything home with them.

Q.   How many of the persons involved with Elio motors (the corporate board) have invested their own money and how much? A “total amount” for all the personnel would suffice.

 

Similarly, Gary Constantine wants to know what Elio Motors’ current “burn rate” is, and how long the company can keep operating on the $45 million it’s already raised. Since that’s not stated in the form of a question:

Q.   What is Elio’s burn rate, and how long can the company keep operating with the funds it currently has.

 

Finally, “Bieber Before Hoes” (awesome username) wants to know why Elio Motors can’t “start small”, building the vehicles they’ve already “sold” the way car companies as varied in size and success as Ford, Ferrari, Rolls-Royce, Tesla, Aston Martin, and Smart did. I’ll let him ask the question in his own words:

Q.   Why do they need (the old GM) factory to start production? They’ve only got (20,000) reservations, why can’t they handle those first then expand bigger as income flows?

 

Special thanks to Neil Blanchard (for the photo at top), to Elio Motors (for giving us the opportunity to ask these questions), and to the guys at the Elio Motors subreddit.

 

Jo Borrás

I've been in the auto industry 1997, and write for a number of blogs in the IM network. You can also find me on Twitter, at my Volvo fansite, or chasing my kids around Oak Park, IL.