Elio Motors Applies for $185 Million Dept of Energy ATVM Loan
The most recent news out of the Elio Motors will provide grist for the rhetorical mills of both skeptics and enthusiasts of the startup car company. As we anticipated in our most recent post about Elio, the company has applied for a loan from the U.S. Department of Energy’s newly revived Advanced Technology Vehicles Manufacturing (ATVM) loan program. Though Congress had allocated $25 billion for the ATVM loans, less than half was disbursed before the program was put on hiatus in the wake of the failure of Fisker, which had been granted about half a billion dollars in loan guarantees. Elio Motors announced that it will be seeking a loand of $185 million to “accelerate the company’s plans to begin production” of their enclosed tandem reverse trike next year.
Elio promotional graphic.
“While this is just one step and there is a long way to go, we are pleased that DOE has moved expeditiously thus far on our loan application,” said Paul Elio, CEO of Elio Motors. “With a $6,800 sticker price that makes ultra-fuel efficient transportation affordable to the general public, we believe Elio is exactly the kind of American-made innovation that the loan program was designed to foster.”
Company principal Elio has acknowledged that the firm will need about $200 million to make to to production and should the loan be approved, the funding will go a long way towards quieting some of the skeptics’ concerns, but it will open up the company to those who disagree with government picking winners and losers among businesses and technologies. In an interview with TTAC, Paul Elio admitted that as an entrepreneur and capitalist he’s not personally a supporter of such government programs but the reality is that his company hopes to compete in an industry where some of the players like Ford, Nissan and Tesla have already used the ATVM loans as a source of funding. I guess the argument is that not seeking government loans puts them at a competitive disadvantage.
To be precise, what Elio announced is that they have successfully completed the first step in a threefold process of review that has to take place before they get a loan. The DoE has deemed their application to be substantially complete. That means the process can go on to the next step, due diligence.
One might think that a program intended to foster advanced technologies would not be open to Elio, which plans on using no new innovative technologies, just proven components, an efficient internal combustion engine, low weight, and aerodynamics to get a vehicle that the company claims will return 84 mpg on the highway. However, it looks like Elio probably qualifies under a criteria for meeting specific high mileage standards. The fact that they are reusing and at least partially retrofitting an existing manufacturing facility, GM’s former Shreveport assembly plant, may also find favor in the eyes of those administering the ATVM program.
As Elio’s loan application moves on to the due diligence stage, another of the Dept of Energy’s criteria for the ATVM loans should also be of interest to Elio enthusiasts and skeptics alike. In addition to meeting all of the other criteria, to qualify for an ATVM loan, applicants “must…Be financially viable without the receipt of additional federal funding for the proposed project.”
It’s not entirely clear to me if that additional funding means over and above the loan amount or if it means the loan itself, Either way it means the ATVM administrators will be looking at Elio Motors’ books and the public may get a clue as to how viable the company actually is. Of course, a skeptic would say that the DoE considered Fisker to be financially viable and look at what happened to them.
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
Wkirkpa on Feb 05, 2015
I know we've sort of moved on from this, but here is a bit from the DOE itself... Quote, DOE... "Projects must be “financially viable without the receipt of additional Federal funding associated with the proposed project” ... "ATVM is a loan program, not a grant program. It provides “expansion capital,” not "working capital" End Quote. Elio isn't an ongoing concern looking to "expand", it is very much looking for "working capital". From what I read, passing phase one just means they submitted the all the required forms, and all of the required boxes on those forms contain, at least, some sort of data, even nonsensical data. There surely be Dragons There, when it comes to Phase 2.
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