Elio Motors Update: Latest Prototype Shown, Lease & Contracts Signed, Factory Stores Announced

Since we last looked at Elio Motors, the startup that plans on selling an 84 mpg, $6,800 tandem reverse trike to people looking to replace 15 year old beaters, there have been a number of developments involving the company. To begin with, the start of production has been pushed back until the beginning of 2015. Though Elio had originally announced that production would start in Q4 of this year, there were delays in finalizing the real estate deal for the former General Motors assembly plant in Shreveport, Louisiana where Elio plans to build their vehicles, including assembling their own engines (whose preliminary specifications have been announced). There have also be some changes to the car’s design as it gets closer to production, with a fourth prototype being introduced. Finally, Elio has announced how they will market and service the vehicle. Like Tesla, they will be setting up factory owned stores to sell directly to customers. Those stores, though, won’t be providing service.

At the beginning of 2013, Elio and Louisiana state officials announced that the startup automaker would be using about a third of the more than 4 million square feet of vacant manufacturing space at GM’s Shreveport factory. The announced plan was going to be that Elio investor Stuart Lichter’s Industrial Realty Group was going to buy the plant from RACER Trust, which is selling off properties formerly owned by pre-bankruptcy General Motors, and that Elio would in turn lease part of the plant from IRG. Sometime during the course of 2013 that plan changed to the Caddo Parish Commision’s Industrial Development Board buying the plant for approximately $7.5 milion, with IRG leasing the entire facility and then subleasing part of it to Elio. The factory is in Caddo Parish. After a lawsuit challenging the purchase was dismissed, earlier this year the county bought the plant and the deal was consummated. Subsequent to finalizing the real estate transaction Elio announced that they would start what they describe as “significant” hiring in the fourth quarter of this year, with total employment of 1,500 reached after production starts in 2015.

IRG said that it hopes to attract at least some of Elio’s suppliers to locate operations in the remaining 2.6 million square feet that Elio is not using. In addition to announcing when hiring for the plant will begin, now that they have a lease, the company has contracted with Comau Inc. to provide automation services for the factory’s body and engine shops. Elio will be welding up their own space frames and attaching composite body panels to those frames. Comau will be supplying the robots and machinery to do so. Elio will also be assembling their own engines, designed exclusively for them by IAV. Comau will be providing the transfer machinery for Elio’s engine assembly.

The preliminary specs on that engine have been released. It’s a fairly conventional water cooled single overhead cam 0.9 liter 3 cylinder engine with two valves per cylinder and sequential port fuel injection. The crankcase, heads and oil sump will all be made of cast aluminum. The power ratings are 55 hp and 55 lb-ft of torque. Some of the people who have made reservations for an Elio trike have expressed disappointment that the engine will be smaller and have less power than the 1.0 liter 70 hp engine that Elio had previously mentioned. It doesn’t look like anyone’s cancelling their reservations yet, though.

Speaking of reservations, when I spoke to the company’s VP of retail operations, Jerome Vassallo, about a month ago, he told me that they’d gotten over 11,000 paid reservations for the as yet unnamed vehicle. At the time, based on previous announcements, my guess was that about 1,000 people a month were signing on. Elio now says they now have over 14,600 reservations so it looks like the rate is accelerating. How many of those reservations are at the impulse purchase level of $100 and how many represent a serious financial commitment to the Elio concept haven’t been publicly revealed.

There have also been some changes now that the P4 prototype has been revealed. The company is chasing after that 84 mpg figure because they want to be able to get triple the average fuel economy of the American fleet of cars. Towards that end the body has had some aero refinement since I saw it last summer. Headlights are now mounted flush with the body on the hood of the vehicle instead of in Plymouth Prowler style pods sticking out from the sides. The roofline has been extended all the way to to the rear, eliminating the notchback, except for a small ducktail spoiler. The changes are to smooth the airflow, and there’s also now a more pronounced Kamm back. The new roofline has an added benefit of slightly increasing cargo space. The front wheels’ cycle style fenders are now fully skirted, and the company says that it will offer different style fenders as accessories.

Apparently, aerodynamic concerns have also resulted in a new front suspension design. The previous prototype used a classic double wishbone setup with a coilover shock absorber/spring running diagonally from the outboard end of the lower control arm to an upper mount on the frame. They’re still using unequal length control arms but they’ve taken the coilover unit out of the airflow and mounted it inside the body fairing using a trick setup. The upper shock mount is still on the frame, but the lower end of the shock absorber is located by a pivoting link attached to the lower frame. A narrow pull rod runs from the lower shock mount to the outboard end of the upper control arm.

In addition to the mechanical and exterior changes, the Elio trike will be getting a nicer interior than used in the previous prototype, with color matched panels. Also, regarding interior features, Elio announced what I think is a rather clever way of keeping up with consumers who expect modern infotainment. The Engineering Services unit of Continental tire is going to be providing electrical engineering and architecture support for the production Elio vehicles. In other words, they’re designing the wiring harness and engine control unit. If you think that a tire company is an unusual choice for an E/E supplier, particularly since Elio has already announced that Cooper will be supplying their OEM tires, Continental owns electronics and instrument supplier VDO.

That connection with VDO will produce Elio’s version of infotainment, a clever application of something VDO developed for the over the road trucking industry. Today’s consumers expect some form of infotainment electronics on their cars. A small company like Elio doesn’t have the resources to develop something like Ford’s Sync/My Ford Touch or Chrysler’s UConnect. Last year, Continental Commercial Vehicles & Aftermarket and VDO introduced the Flexible Smartphone Docking Station (FSDS). FSDS was designed to integrate over-the-road truck drivers’ smartphones with their vehicles and by offering it in their three wheeler, Elio takes care of the “how do you offer Nav on a cheap car?” problem.

The FSDS has a clamp that will hold most smartphones and comes with a phone app, developed by Continental, that enables the availability of phone features including online services while driving. The unit, which hooks up to your phone via Bluetooth, has an onboard audio amplifier with four channels rated at 20 Watts per channel, an integrated station seeking FM tuner, and a 5 volt USB tap for charging your phone. In terms of functionality, VDO says that the FSDS app includes the functions drivers require most while driving, such as phone calls, maps, online points of interest, and music selection. All features use text to speech to reduce distracted driving, and the app bundles related services such as Community (communication & social networking), Vehicle (audio entertainment) and Proximity (individual add-ons) so they can be accessed with a single click.

As the Elio vehicle nears production, the company has finally announced how it will distribute and sell it. Sixty major markets in the United States have been identified and they will each get at least one factory owned Elio store that will sell directly to customers. With Tesla running up against car dealer franchise laws in Texas, Ohio, Arizona and most recently in New Jersey, I asked Vassallo how Elio plans to deal with the same problem. Here’s where three wheels again come in handy. Though Elio plans to have their vehicle meet automotive level safety and crash standards, as a three wheeler, it’s legally considered a motorcycle and thus has an easier and cheaper certification process. According to Vassallo, their status as a motorcycle, as opposed to an automobile, manufacturer will make a difference when it comes to operating factory stores in some states. He specifically mentioned that Harley-Davidson has factory owned stores, though he didn’t say whether those stores were in Texas or the other states that are problematic for Tesla. I checked with Harley-Davidson about factory owned stores and at the time of this publication, I’m still waiting for their PR contact to get back to me about whether H-D has factory owned stores in Texas, New Jersey, Ohio or Arizona. For the record, the Texas dealer franchise laws, which are considered to be the strongest in the country, cover any motorized road vehicle with at least two wheels.

Interestingly, while the factory stores will sell the Elio vehicles and accessories, if you buy an Elio, you won’t get it serviced directly by the company. Contracts have been signed and an announcement will be forthcoming that an existing nationwide chain of automotive service centers will be responsible for maintenance, service and warranty work on the Elio trikes. Parts and service are major profit generators for traditional car dealers, so it’s surprising that the manufacturer would pass up that revenue, but there are costs associated with setting up parts supply and logistics and many companies today do outsource that kind of stuff.

Finally, Vassallo told me that sometime soon, Elio Motors will make a major announcement concerning investors. Since the company is privately held, my guess is that they’re either going to announce an initial public offering of stock, a major investor, or some kind of program where potential buyers of the Elio trike can also invest in the company. Again, those are guesses.

When the Elio project started getting attention, just about everyone who commented on it assumed it was at best vaporware and at worst a scam. As I said last summer, three wheeled high gas mileage vehicles with composite bodies don’t have a great track record of actually getting to market (cf. Dale et al). Some have questioned Elio’s financials, resulting in comment flame wars between Elio skeptics and the Elio faithful, presumably folks with deposits down. I don’t know much about financials, but being the contrarian that I am, I said last summer that there wasn’t any reason why Elio shouldn’t be able to make a three wheeler with those performance, safety and fuel economy specifications at that price point and nothing has happened since then to change my mind. Think of the Nissan Versa or Toyota Yaris and subtract 25% of the cost.

I do question whether it will be cheaper for Elio to build their own motor than buy one of the 1 liter or smaller engines, mostly three cylinders, that are proliferating like mushrooms in the auto industry. When Morgan reintroduced the 3 Wheeler, they chose to buy engines from aftermarket V-Twin maker S&S, not build their own. Last year Caterham introduced an entry level Seven with a 660cc turbocharged triple made by Suzuki. There’s no shame in buying engines. Back in the day, Continental Motors supplied many independent automakers, with both stock and custom designed engines.

On the other hand, Elio is planning on production levels far beyond those of specialist makers like Morgan and Caterham. At large enough production numbers, it’s likely to be cheaper to build your own motors.

Perhaps Elio Motors’ sums don’t add up. Certainly their backer IRG’s reliance on Caddo Parish’s purchase of the Shreveport assembly plant after publicly announcing only months earlier that IRG would be buying it themselves doesn’t exactly instill a lot of confidence in their stated plans. If the project ends up stillborn, or worse, a scam, I’ll be the first to say that I was wrong, but in the meantime I’m trying to keep an open mind about Elio.

There are genuine reasons to be skeptical, but from a manufacturing engineering standpoint, they can get the thing built and meet their stated performance specs. At the recent SAE World Congress I spoke to people from Comau and IAV about Elio Motors. Obviously, they aren’t going to say anything negative about a business partner, but when I brought up the fact that skeptics think Elio might be smoke and mirrors, the engineers from those firms said it wasn’t likely that their employers would sign contracts for vaporware.

Speaking of contracts and “vaporware”, as this post was being finished, Elio Motors and Flame-Spray Industries announced that FSI will be providing Elio with Plasma Transferred Wire Arc (PTWA) equipment. PTWA is a process that sprays a vapor of molten steel, depositing a thin, 150 micron layer of steel alloys on aluminum engine cylinder walls, eliminating the need for heavier inserted cast iron liners for the piston rings to ride on. PTWA was originally invented by Ford materials science and nanotech engineer Matthew Zaluzec, who started working on it in the early 1990s. FoMoCo then brought in Flame-Spray and Honsel to develop and market the process.

PTWA was first introduced on high performance engines, the supercharged 662 hp V8 in the Mustang Shelby GT500 and the 545 hp twin turbo V6 in Nissan’s GT-R. Flame-Spray markets PTWA as a weight-saving technique and my guess is that weight savings has a lot more significant impact on fuel economy when the vehicle has 1/10th the power and about a quarter of the weight of the GT-R, as is the case with the Elio tadpole.

By this time next year, we’ll know if Elio is for real or not. Actually, we’ll know by the end of this year, when Paul Elio says that his company will finally start hiring people to work at the Shreveport factory. The real estate is secured, they’ve contracted for production equipment, now let’s see if they start hiring some folks to man that equipment.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can get a parallax view at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS