You may have heard of Elio Motors, the three-wheel vehicle start-up promising superb fuel economy and affordable prices. While that all sounds fine, things are less than dandy inside the company’s operations.
According to local news affiliate KTBS3, the Louisiana parish that backed Elio has quite a few questions as to what’s going on and why it hasn’t done much of anything with its manufacturing facility. Elio set up shop at General Motors’ former Shreveport assembly plant in Louisiana. Local lawmakers are now calling for an investigation as to why Elio was chosen over two other suitable manufacturing operations.
It gets worse: Elio reportedly needs another $376 million to start production. At the time of the report, the company had just $120,000 in the bank. Commissioners from the parish are looking for answers from Stuart Lichter, a majority shareholder and leaseholder of the plant.
“Today the board voted to ask Stuart Lichter to come and talk to the IDB and the Parish and update everybody as to what he’s doing, and what he expect to happen at the plant.” attorney David Wolfe said, according to KTBS. “It’s frustrating that Elio is not running and more jobs are not there now.”
Elio told Jalopnik its production target of 2018 is still on schedule and that the goal has always leaned on continued fundraising for the company.
“Our production date has always been dependent on funding,” founder Paul Elio said in a statement. “Our current target is to launch production in 2018.”
Lichter will have to provide answers soon. According to the SEC filing, Elio has until July 1 of this year to create 1,500 jobs in Caddo Parish or it will be served a $7.5 million fine. Elio currently has 28 employees on its payroll.
Elio seems prepared to face the fine, too. According to its books, the $7.5 million fine has already been accounted for as of December 31, 2016.
Comments
This whole operation stank from the beginning with its unrealistic promises.
In some stares (including Puerto Rico) a three wheel vehicle is classified as a “motorcycle, so if Elio Motors wanted to sell in those states, they need to add free helmets for the driver and passenger. What about safety features? Does it come with airbags?
Elio will require no helmet in 50 states… Do some research.
Does any motorcycle manufacturer ( two wheeled, that is) give out “free” helmets to a buyer in any state? Your statement is not logical.
It should not need air bags second we can buy our own helmet third it should not need required helmet because it has a metal top on vehicle let’s go will I am waiting to purchase when atdealers
It has air bag and helmets are not required.
Learn more about the Elio Autocycle at http://www.eliomotors.com
“Our production date has always been dependent on funding,” founder Paul Elio said in a statement. “Our current target is to launch production in 2018.”. Elio forgot to add his caveat that anything out of his mouth are ‘forward looking statements’. Little that he says is based in reality. Only thing he wants is to keep pulling in funds from the gullible to keep his salary.
Whenever it is, it won’t be soon enough.
Elio was always an questionable proposition: The promised price of $6800 is impossible for the specs. I’m very familiar with the Japanese 400-600cc maxiscooters, very common in my and other countries.
Even high-volume ones that get sold in the 100Ks units/year, and don’t have a enclosed body, heater, defroster, air conditioning, power windows and door lock, stereo, three airbags, seat belts, wipers, ESC and ABS and 3-year warranty cost a lot more than $6800 (which of course drifted to $7300). Elio were always off by a factor of 2 in terms of price, likely more at their initial volume & given lack of experience in volume vehicle manufacturing.
Elio’s attempt at developing their own engine was also stupid — even Tier 1 carmakers like Toyota now split the cost of engine development with direct competitors since it’s a multi-$B process. There are any numbers of 3d-party engines that Elio could have bought to reduce R&D cost and risk (for example, Suzuki has a 650cc twin for its maxi-scooter that does 54hp, the target of Elio’s engine).
And most significantly, heavy manufacturing needs huge upfront investment, and years before profits can be realized. It’s not like software where the marginal cost of every copy sold is zero.
Why would anyone give Elio, which has no people experienced in heavy manufacturing of any kind, multi-$100M for this? (and incidentally, in 2015 they claimed to need $200M+; it’s now $375M)
They never had a business model except taking deposits from poor ignorant people for vaporware.
Re the helmet thing, that’s actually pretty much their only “success”. They managed to lobby for an “autocycle” category which in terms of safety laws is considered a motorcycle with seat belt (no Federal safety testing, airbags not required, no crumple zones); since it’s enclosed and stable when stationary, a helmet or motorcycle isn’t required. (Elio would have had airbags, but other autocycles like Polaris don’t).
However, noone knows what insurance rates will be on autocycles — they are typically cheap on motorcycles in the US because people only use them as toys and not daily transportation. Certainly when that changes premiums will reflect it (motorcycle insurance in Europe is much more expensive than for cars on a per-mile basis).
Well said, ‘Wavelet’
I didn’t feel like putting in the time to go into all the negatives about the Elio affair.
The first red flag was the extremely low price point. In my estimation it probably had to be in the, at a minimum, $18-$24,000 dollar range with a third party supplied drive unit. Even a kit would have to come in, with a drive unit, at around $16-$18,000. And at those price points, Elio wouldn’t see any profit for years.
And a kit is where they should have started. By using third party vendors to supple components they could have reduced start-up costs and controlled unit costs.
Elio actually spec’d out the parts and has priced almost all of them. They are able to meet their $7450 price while leaving room for $1,000 profit. The economics of motorcycle production is world’s different from automotive manufacturing. 65,000 reservations x $7450 = $484,250,000. That is just the reservations. They will sell more than that once they get under way.
The “heavy manufacturing” upfront costs you mention are engineering and factory building. Because you are a little ignorant about what Elio is doing, they already have a manufacturing plant, have used Roush, IAV, and Red Dot for engineering.
They have a factory, an engineered design, engine developed, transmission supplier, and a slew of suppliers ready to provide parts. Hardly “vaporware”. It is pretty presumptuous to assume all the people involved have no experience in manufacturing when they clearly have people from Daimler Chrysler and Lear on staff. It is also irresponsible to say Elio supporters are all Ignorant. Most have done research (which makes them not ignorant by definition). A lot of us put down deposits in part to support an attempt to bring manufacturing to the U.S. It is definitely better than continually losing jobs as companies move overseas. It is easy to complain, call people names, and find problems. While some do those very things, there will be those of us, through our actions and support, who will try to take action to make this place better.
Elio actually spec’d out the parts and has priced almost all of them. They are able to meet their $7450 price while leaving room for $1,000 profit. The economics of motorcycle production is world’s different from automotive manufacturing. 65,000 reservations x $7450 = $484,250,000. That is just the reservations. They will sell more than that once they get under way.
The “heavy manufacturing” upfront costs you mention are engineering and factory building. Because you are a little ignorant about what Elio is doing, they already have a manufacturing plant, have used Roush, IAV, and Red Dot for engineering.
They have a factory, an engineered design, engine developed, transmission supplier, and a slew of suppliers ready to provide parts. Hardly “vaporware”. It is pretty presumptuous to assume all the people involved have no experience in manufacturing when they clearly have people from Daimler Chrysler and Lear on staff. It is also irresponsible to say Elio supporters are all Ignorant. Most have done research (which makes them not ignorant by definition). A lot of us put down deposits in part to support an attempt to bring manufacturing to the U.S. It is definitely better than continually losing jobs as companies move overseas. It is easy to complain, call people names, and find problems. While some do those very things, there will be those of us, through our actions and support, who will try to take action to make this place better.
– An Elio supporter, an America supporter!
Sorry that you’re one of the naïve people who gave Elio a deposit long before the car exists.
Not sure where you’re getting your optimism from. According to its own SEC statements, Eli Motors has $120K in the bank, and an accumulated deficit of $121M (money they already owe!). They need $374M to start production. They’ve laid off all but 28 of the employees.
And their cars are vaporware by definition. They originally promised cars on the road by mid-2012, see
http://gas2.org/2013/08/21/the-elio-motors-saga-if-it-looks-like-a-dale-and-quacks-like-a-dale/
Have you seen any? Now they’re saying 2018. Yeah, right.
And of course motorcycle manufacturing is different. Know why? Quantities involved. Elio isn’t going to produce many millions of units/year the first year. It’s not going to produce any at all; I’d expect them to have the factory seized for back taxes (they never made good on the jobs promise to the Parish).
You want to know what it costs to make a 3-wheeler? Look at what real companies like Polaris or Can-Am are doing.
As to bringing heavy manufacturing to the US, good luck with that. Some assembly, sure — what the US car companies do.
Apparently, a BC, Canada company can transfer an Elio deposit to their $15,500 Solo E-car. https://www.google.com/webhp?tab=mw&ei=q_IPWeiDCoGR-QHM3JuoCQ&ved=0EKkuCAQoAA#q=Electra+Meccanica
Unbelievable, the Elio fanboys/girls remind me of the Lance Armstrong supporters – fight until the end (it was disheartening to read). But, it’s time to look at Elio objectively. Within a year either I or the Elio believers will be apologizing. And, given Elio’s history of promises, the only announcement I expect is another push-out or the folding of Elio. We’ll see.
Yes, I have seen one. Yes, they owe money – a lot. Is that unexpected? Not by smart people. Most startups run in the red way before they become profitable. Most people don’t have an Elon Musk character backing them… Though, I recall Tesla running in the red for a while as well. And by the way, I know you are just baiting me and for some reason, you can’t just appreciate that people may have other opinions but I am FAR from naive. I was an engineer at that GM plant that Elio is renting. I did my homework. I evaluated if I thought the pittance of a deposit really made a difference to my budget (it doesn’t). I also consider my deposit an investment in America. Hate all you want. Try to shame all you want. You are just an internet bully. The Dale was a sham and has been shown to be o e and is evident in how it’s founder acted. Paul Elio has made mistakes but has been very upfront about them. Will there be further delays? Maybe. Hello, I’ll even say probably. I would expect that from a brand new car company. You are an idiot if you expect an accurate estimated time of production from a car company. Even Tesla (founded by a really rich, smart dude) has delayed production. I’m sure you hound them about that and all their recalls, right?
And, Hey! I’ve actually sat in an Elio on two different occasions. I can’t sit in vaporware. (The Dale was never more than a mockup that wouldn’t even move on its own. You know, just for comparison’s sake)
Here we are two years later and Elio is still two years away from some targeted date to manufacture. Sound familiar?