By on May 2, 2017

elio orange snow

Remember Elio Motors? If you’ve ever expressed any public interest in its economical three-wheeler, the company’s aggressive social media campaign has ensured Elio is a household name in your life. You may also recall the company pushing back the vehicle’s release date every single year since 2014. With a revised launch of 2018, surely Elio Motors is on track to deliver the affordable and eco-friendly little trike this time — right?

Don’t bet on it.

After an assessment showing the company had $123 million in debt with only $101,000 in the bank as of September 2016, the future is now even more dire. Elio Motors’ U.S. Securities and Exchange Commission filing shows the company needs $376 million — $64 million more than the original previous $312 million estimate — to begin production, reports Jalopnik.

Worse still, it only has 76 weeks to find the money if it has any hope of maintaining its self-imposed deadline. 

Elio’s debt climbed through the end of the year and is now estimated to be well in excess of $141 million, though it did manage to chuck a few grand into the bank before the end of the fourth quarter — not that it matters. The company’s solution to its growing financial emergency is to gain funding through “venture equity, debt arrangements, and capital leasing of equipment.”

According to the SEC filing, the company managed to secure supplier commitments to help soften the blow. Aisin agreed to supply transmissions, Linamar Corporation committed to manufacture and supply the 900 cc engine assembly, and Hyundai DYMOS will supply seats. However, those commitments only account for a fraction of the finances needed, and Elio Motors seems convinced it can procure additional investments via reservations once a prototype and testing models are finalized.

Currently, there are around 65,350 pre-orders with 2017 showing a much less impressive growth rate than 2016.

elio-black

The company is also selling non-essential equipment obtained through the purchase of the former General Motors plant it plans to use for assembly in Shreveport, Louisiana.

Through December 31, 2016, sales of excess equipment yielded approximately $5.08 million for Elio. The filing lists another $1.27 million in excess equipment it could part with.

Elio hasn’t officially laid off anyone in its relatively minuscule workforce, but many have gone on an extended vacation since the start of this year.

“In order to reduce costs, effective January 1, 2017, the Company furloughed a significant portion of the engineering, manufacturing, and sales and marketing workforce,” reads the SEC documents. “At this time the Company is focusing its efforts on raising capital through a combination of debt and equity offerings. Once capital has been raised, the Company will resume engineering, manufacturing, and sales and marketing efforts.”

There are also some outstanding bills with suppliers.

When Paul Elio pitched this alternative vehicle, he promised it would create 1,500 jobs and offer economical and reliable transportation for $6,800. Now it looks like his staff of 28 is in danger of being let go and the vehicle’s estimated base price has climbed to $7,450. The company has only managed to cover a small portion of the interest on its initial loan.

We hate to see an interesting concept like this fizzle, but even some of Elio’s former supporters are urging the company to just give up. The comments section of the brand’s Facebook page is littered with snarky comments and accusatory language. Many have suggested Paul Elio give up his $250,000 and deliver on his promises or begin refunding pre-order investments. Quitting is likely the last thing Elio wants to do with this much debt on the books.

elio-black-front

[Images: Elio Motors]

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29 Comments on “Elio Motors Needs Just $64M More to Bring Trike to Life...”


  • avatar
    sirwired

    I’m confused; the headline says the company needs $65M, but the article says they need $376M. Which is it?

  • avatar
    Clueless Economist

    With gas at $5 a gallon, these things would fly off dealer lots.

    With gas at $2.09 a gallon, these things will not ever be produced.

  • avatar
    Middle-Aged Miata Man

    Hasn’t Elio been in that old GM plant since 2012-2013? One would think it could have sold off that “non-essential” equipment much sooner than now, and perhaps applied those funds towards meeting any one of its previous production targets.

    But that would be downright nutty.

  • avatar
    whynot

    Elio Motors is the next Dale/20th Century Motors without the interesting backstory involving a trans-conwoman.

    • 0 avatar
      bking12762

      LOL…I went to school with Dale Carmichael in Woodland Hills, CA in 1973. He was the son of Liz and who the car was named after. Show and tell was always about the family venture. His Mom/Dad used to drop him off in a white El Dorado. I would have liked to have seen Dale dropped off in the “Dale”. In retrospect, it was a strange deal as our teacher was an openly gay man (fantastic educator by the way).

      • 0 avatar
        whynot

        Always thought it must have been awkward for her kids, considering they must have known the truth about their mom/dad yet had to follow the elaborate backstory (lie) Liz concocted.

      • 0 avatar
        la834

        Whoa, you’re telling us that Dale Clifft (who built a 3-wheeled car from a motorcycle, inspiring Liz Carmichael to commercialize it (or at least pretend to whilst collecting money from investors) and Liz had a kid together? If so, that’s a part of the story I haven’t read in past reports…..

    • 0 avatar
      Pete Skimmel

      As far as we know, anyway.

  • avatar
    LeMansteve

    One problem with this car – Americans will inevitably want a bigger one with more features, and so on.

    The unique aerodynamic shape and 4-digit MSRP make this car. Go bigger and you start to give on MPG and price. Go too far and why not just get a Corolla or something?

  • avatar
    NeilM

    In hole, stop digging.

    Seriously, you could buy some kind of decent used car for $7,450. Why would anyone buy one of these worthless plastic shitboxes instead?

    Matt Posky writes: “We hate to see an interesting concept like this fizzle.”

    What’s interesting about it? Look like one more in that endless chain of wannabe ‘world beaters’ that some shade-tree mechanic cooked up in his home garage.

    • 0 avatar
      Matt Posky

      The entire concept of the automobile was cooked up at home in inventors’ garages. Elio’s product and business model are certainly flawed, but the P5 would add variety to the automotive landscape.

      That said, I’m not in the market for one.

  • avatar
    SCE to AUX

    Outriggers = FAIL (see Aptera)

    Three wheels = FAIL

    These features *can’t* be the keys to an inexpensive commuter car.

    • 0 avatar
      highdesertcat

      I agree. We need to import inexpensive four-wheeled commuter cars from China, India and Malaysia.

      That used to be Hyundai/KIA’s forte, but they have priced themselves out of that market as of a couple of years ago.

      • 0 avatar
        ttaclogin

        Nah. I’m an Indian living in US. Cheap Indian cars are slooow and doesn’t have features Americans expect, such as, airbags, ABS, automatic transmission, power windows, etc. They won’t sell in enough numbers to justify bringing them to US. Used cars make more sense for Elio’s price.

        • 0 avatar
          highdesertcat

          My experience has been that buying used is just buying someone else’s discards and problems.

          But if a person cannot afford anything else, than they just have to bite the bullet, expect the worst, and hope for the best.

  • avatar
    orenwolf

    It’s too bad, really – I love these as a concept.

    • 0 avatar
      highdesertcat

      Maybe for a young person.

      The three-wheeled motorcycle is a hit, especially with old codgers who haven’t got the strength to hold up a two-wheeled bike. But you sit on top of those.

      An Elio would be too hard to get into and out of for an old person. And those are usually the ones who can afford nice toys.

      Enclosed three-wheelers were available in England, but even there, they never caught on in a big way.

      And there you needed to be enclosed to keep dry in the rain.

  • avatar
    DJM

    Sell to Tesla, stick some batteries in it and call it the Model 1…

  • avatar
    tallguy130

    Is $64 mill really that much venture capital money to raise? No snark, I’m really wondering how high a hill that is to clime.

    But another comment said it best. At the current price per gallon this will never happen.

    • 0 avatar
      mcs

      @tallguy: Cigna’s CEO made $49 million last year. United Healthcare’s CEO made $66 million in 2014. Microsoft CEO Satya Nadella made $84.3 million. Larry Ellison made 67.3 million. Maybe they should hit one of these guys up?

  • avatar
    stuki

    For a car to be used as a solo commuter, it’s a neat concept. You can supposedly pack twice as many Elios into a given area devoted to parking, as you can regular cars with similar front track. Think triangle vs square….

    The Land of the Parking Lot Designed Around Crew Cab Long Bed Duallies does not, at first glance, at all seem like the place that would be most concerned about that.

    But perhaps there are pockets in the US that are dense enough to be annoying parking wise, yet not served as well by public transport as the countries generally thought of as dense enough to make car ownership a hassle….

    Regardless of whether the venture ultimately fails, it’s at least an interesting one. Not just another “look ma, I can put an even bigger elektromotor in blue-state-penis-extender than Tesla can” attempt at cashing in on the hype of the day. Heck, there is even something Soichiro Hondaesque about doggedly pursuing motorized personal mobility, for populations that have so far not been able to enjoy it.

  • avatar
    Russycle

    Couple years ago I was looking at a 100-mile daily commute. With gas at $4 a gallon, the Elio was looking really good. But at $2 and change, that’s a tougher nut.

  • avatar
    sportyaccordy

    $64M is not that much. Hell, $376M is not that much. GM blew a billion on the Alpha platform.

    I think the timing is bad, is all. The idea doesn’t seem that off, though the govt really needs to ease up on the whole 3 wheel vs 4 wheel thing. Makes no sense that I can ride a motorcycle, but if I add 2 more wheels to it it needs crumple zones and airbags to not be a one-off kit car.

  • avatar
    brentrn

    Who could have known that bringing a vehicle to market from scratch would be hard?

    • 0 avatar
      FAHRVERGNUGEN

      Just ask AM General about the MV-1. I think they finally threw in the towel, even after they took over all the assets of their predecessor and tried to go it on their own…


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