By on October 27, 2014

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.

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

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56 Comments on “Elio Motors Applies for $185 Million Dept of Energy ATVM Loan...”


  • avatar
    theupperonepercent

    Yet another waste of funding. It’s too small and impractical.
    The Model S succeeded because it was an EV like a regular car.
    The Karma could have succeeded if it was as spacious inside as a mid-sized sedan instead of being a tight sports car.

    I hope they turn them down.

    Use crowd-funding instead. Cause I already know they’ll never make it past square one.

    • 0 avatar
      Luke42

      One of my coworkers is chompitg to buy one of these things. And I have to say, it’s a *perfect* fit for his lifestyle.

      At $6800, I’d be tempted to use one as a commuter to supplement my minivan, though I’m more likely to pick up a Leaf.

      But they gotta build the factory before they can make money selling it. And before my friend can buy his dream car. The car business is one where you spend some fraction of billion dollars up front, and then earn it back a few thousand dollars at a time.

      • 0 avatar
        jeffkan1

        Factory does not need to be built, an existing one in Shreveport, Louisiana will be used. So that pesky “build a plant” problem has been solved. :-)

        • 0 avatar
          mkirk

          I think in building a plant to produce automobiles that the actual structure of the building itself may be the easy part. Fitting it with all the equipment to actually build the car would be the catch. Shreveport last built the S-10 IIRC so I am not sure if any remaining equipment if there even is any is of much use.

  • avatar
    theupperonepercent

    Waste of money.
    Don’t give em a cent.
    Let em get it through crowd-funding.

  • avatar
    wumpus

    So they need $200M just to make the cars? In other words, they need roughly the sales volume of a Chevy Cruze (3 million in 6 years according to wiki) to hope to make back the money (assuming it is a govt. sweetheart load. Probably needs Honda Cub numbers for Wall Street backers).

    The price always seemed impossibly low. Now we know why, and what isn’t covered by it.

  • avatar
    J.Emerson

    “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.”

    It also explains why some conservatives find fault with Elio. If there’s even a slight chance that some ex-GM employees might wind up working at there, they’re going to oppose it by default.

  • avatar
    eggsalad

    IF they ever actually build these, I see no way they can make their $6800 price point. But even at $9k, it would sell.

    I can see a $9k Elio and a $6k used pickup as being the perfect $15,000 car :)

  • avatar
    wmba

    Tooling-up to make this pathetic thing just boggles my mind. And somehow they think they can afford to make an engine from scratch as well, all for the equivalent of a buck twenty-nine in automotive industry terms – the engine mockups are simply laughable, as I’ve said before.

    Flushing $185 million down the toilet doesn’t seem like sensible use of public money, no matter how earnest and well-meaning and cockeyed the principals are. Dearie me, abandon all hope of logic, all ye who invest in this load of tripe.

  • avatar
    Volt 230

    If this is such a great idea, then why aren’t investors lining up to put their money into this venture? Perhaps because it’s going no where slowly, really, remember when the Segway was supposed to be the transport of the future and we would all be owning one?

    • 0 avatar
      Pch101

      If it was a great idea, a company like Honda would already be making it.

      • 0 avatar
        SCE to AUX

        You’re giving Honda too much credit; they’re one of the most conservative mfrs out there right now. The most adventurous project they’ve done lately is the Clarity hydrogen car, and the business jet program.

        Until recently (Accord), they couldn’t even build a hybrid to save their life.

        And their product line is anything but filled out – notably lacking a serious truck effort, or anything luxury (Acura is questionable), or sporty.

        • 0 avatar
          Pch101

          Honda doesn’t do well with luxury or hybrids. But Honda is hard to beat when it comes to standard four-cylinder gas engines, mass market cars and motorcycles.

          This is essentially a glorified motorcycle. The motorcycle makers have figured out that this kind of thing is too much like a car for those who want a bike, and too much like a bike for those who want a car. There isn’t any interest for anything in between.

  • avatar
    VoGo

    There are some Americans who continue to believe there is a place for government funding of invention. Perhaps it is because they have seen some of the results, including the internet, infant formula, GPS, microchips and many life-saving vaccines.

    • 0 avatar
      stuki

      Or perhaps just because they realize someone just may have found a way to feed their kids and send email even if the government hadn’t burned through a few hundred billion of others people’s money to get there a week earlier…..

      • 0 avatar
        jhefner

        We will never know how much revenue that “week earlier” has given American businesses; but it also allowed the U.S. to set the playing field for the internet that the rest of the world gets to play on (no .us needed for us, for example), and the competitive advantage it gave many U.S. businesses until the rest of the world has managed to catch up.

      • 0 avatar
        VoGo

        Stuki,
        Did it hurt you to type that reply, given your battle with polio? Oh, wait, you don’t have polio, do you? Know why? Jonas Salk and the March of Dimes, which was founded by FDR.

  • avatar
    SCE to AUX

    This loan is supposed to be for advanced technology, according to its name.

    There is no advanced technology in this thing. The only reason it may get 84 mpg is its light weight and one less tire. Making it look like a science project doesn’t mean it’s advanced.

    3 wheels = no deal. Even if this vehicle is produced, it will fail.

  • avatar
    Volt 230

    Don Panoz began his business with his own money, cause he believed in the product and it was good to begin with.

    • 0 avatar
      grinchsmate

      You’ve got to wonder if he makes any money.
      Is it a real business or a project to keep his son away from the drugs and whores?

      I must admit I had never heard of Panoz till the recent Leno video so I’m talking out my arse. Although my arse has got it right before.

  • avatar
    gasser

    $3/gal gas will kill this

    • 0 avatar
      Luke42

      s/kill/delay/

      There’s only so much oil in the world, and me use it faster at $3.

      • 0 avatar
        RedStapler

        Thats what I was thinking. The success of this venture is subject to gas prices in 18-24mo when they hit the market. If gas stays at $2.50/gal they are sunk. With some timely unrest from the usual suspects (Iran, ISIS, Russia et al) and $4.50/gal they will sell like hotcakes. Look at the stupid prices people were paying for used up 3cyl Metros during the 2008 price spike.

  • avatar
    Car-los

    I think this project has a lot of potential. They claim that they already have over 35,000 customer reservations and that this number is increasing at an average rate of 6,500 a month. Multiply that initial number by the estimated price of $6,500.00 and you get well over $220,000,000.

    While I agree with a lot of the comments above regarding not to waste public money it seems to me that this project might be worth giving it a hand.

    They would be entering a rather unexplored market that might well have a very bright future, a three wheeler is neither a car nor a motor bike, it might not be as safe and practical as a car but it is a lot safer and a lot more practical than a bike.

    It sure is a risky enterprise but one that also has a lot of inherent possibilities.

  • avatar
    highdesertcat

    In the interest of governmental fairness, Elio Motors SHOULD be granted this money.

    If ventures such as Solyndra, A123, Fiskars, and others who were known to be pre-disposed to failure and bankruptcy BEFORE the money was transferred, were granted venture money, Elio Motors has a better chance of success because they offer a real product. Not just Blue Sky and Hot Air like all the failures did.

    And we’re not even talking about the Billions upon Billions of dollars the American tax payers lost on the bailouts, handouts and nationalization of GM and Chrysler, which provided NOTHIN’ in ROI, save UAW jobs for the dues-paying members.

    All those old codgers with money who choose to ride three-wheeled motorcycles because they would fall off two-wheeled motorcycles and can no longer hold them up, would love to have one of these Elio three-wheelers in their stable of toys. Better than any EV, PEV or Hybrid, for sure!

  • avatar
    jacob_coulter

    Another government boondoggle.

    Please explain to me why selling an enclosed motorcycle is worthy of taxpayer funds?

    I own a motorcycle that gets similar fuel economy, why am I not subsidized for my decision?

    I really don’t know how you can hand $185 million to Elio motors but not Harley Davidson.

    The taxpayer should not be in the venture capital game. If you want to fund academic research with grants, fine, but not starting up companies.

  • avatar
    jacob_coulter

    Where is my taxpayer subsidy for owning a motorcycle?

    Do I need to put a shell around it to qualify?

    • 0 avatar
      mkirk

      Back in the 80’s…When every American that wanted to buy a decent bike larger than 650cc had to subsidize your Harley Davidsons. Harley Davidson is probably a poor example to support your arguement as they have gotten plenty of taxpayer love over the years.

    • 0 avatar
      mkirk

      Back in the 80’s. Look at the number of Honda CB650’s from the 80’s versus 750s for sale on your local Craigslist. The government handed the big bike market to Harley Davidson in the 80’s by taxing the hell out of anything bigger than 650cc’s. HD was GM x 10 back then and the Japanese were handing them there butts on a silver platter. So Harley Davidson lobbied the Government and got prohibitive tarriffs put on the Japanese makers simply because they couldn’t screw a bike together worth a damn at the time.

      • 0 avatar
        shaker

        Actually, the displacement limit for the tariff was 750cc and larger – I should know, as I bought a “downsized” Nighthawk 700S (’83 model). Honda de-stroked the motor and cleaned up the head design so that it produced more HP than the previous year’s 750 model.

        As to HD, they probably make more money selling HD branded Chinese goods (leathers, boots, coffee mugs, other such “swag”) than they make on bikes…

        • 0 avatar
          mkirk

          You are correct shaker. I like those old Nighthawks. But Harley still got the hookup from uncle Sam at the expense of 80’s riders who wanted a bike that ran reliably and didn’t “mark it’s territory”.

          • 0 avatar
            shaker

            After some checking, the displacement cutoff for the tariff was above 700cc, which makes sense, as many Japanese MC engines were “downsized” to that 700cc for the ’83 model year.

            It took some time for the leaky, unreliable HD’s of the AMF years to become a memory, and the tariff may have helped a bit, but it was HD adopting outsourced (in many cases, Japanese) braking and suspension components, and the “Just-In Time” inventory system to keep costs down. IIRC, when the York assembly plant was automated, they chose a Japanese company (over Cincinnati) for the automated robots and tooling.

            So, while I’m glad that HD survived, and with it American jobs, I’m miffed when a Hog rider gives me a disdainful look when I’m on my Kawasaki – and how much foreign involvement kept HD alive and profitable.

  • avatar
    indi500fan

    If this deal gets funded, it will be because a large chunk of the money winds up in the pockets of cronies of the fedgov. I’m not familiar with the folks on board at Elio, but they can always recruit a Hunter Biden or Steve Rattner as consulting staff.

    As for their selling price, nobody has explained (that I’ve seen) how Elio can be substantially cheaper than benchmark Chinese produced motorcycles + the added body parts.

    • 0 avatar
      mcs

      >> As for their selling price, nobody has explained (that I’ve seen) how Elio can be substantially cheaper than benchmark Chinese produced motorcycles + the added body parts.

      Are you sure that the Elio is substantially cheaper than a Chinese motorcycle? I think you might want to take a look at this:

      http://www.alibaba.com/product-detail/for-sale-China-light-truck-2_803210423.html

  • avatar

    I think it’s important that government backed loans are not the same thing as a handout. Being a loan, it means the risk is being subsidized, not the entire expense. If there is success then the loans are repaid with interest. It seems there are many non-supporters here, and it’s fair to say that with failure our tax dollars will be lost. I also am not a supporter of these loans, but I agree with Elio, that if they exist then one is foolish for not taking it. Even Rand took some gov hand outs.
    I have not wasted my $100 for a reservation at this time, but if they come to production at their target price then I will be buying one. It’s hard to get a motorcycle at that price, let alone a cycle-car! It’s a niche market, but history has shown that such markets are not exploited by big companies and small ones do well when they stay in them (AMC in late 50s/ early 60s, Subaru, Harley Davidson) and do poorly when they try to expand (same three examples)

  • avatar
    petezeiss

    I can’t look at a photo of the Elio without thinking it needs wings and a little Lycoming in the front. It’s already got wheel fairings.

  • avatar
    Acd

    Used car dealers who are tired of selling Chinese scooters will love to have to opportunity to sell these. Maybe some are former DeLorean, Bricklin, Sterling or Daewoo dealers who can see the possibilities…….

  • avatar

    Lane-splitting has been allowed in the country (Netherlands) I reside for ages, but only when freeway traffic advances at a slow pace. I have never even heard of a serious accident that involves a motorcyclist maneuvering through freeway traffic. It requires discipline and in particular a biker with a keen eye that knows when to pass cars. Perhaps in the future (with all cars featuring lane assist), freeway lanes can be made smaller, or a dedicated ‘small lane’ can be used by motorcyclist and narrow track vehicles.

  • avatar

    Lane-splitting has been allowed in the country (Netherlands) I reside for ages, but only when freeway traffic advances at a slow pace. I have never even heard of a serious accident that involves a motorcyclist maneuvering through freeway traffic. It requires discipline and in particular a biker with a keen eye that knows when to pass cars. Perhaps in the future (with all cars featuring lane assist), freeway lanes can be made smaller, or a dedicated ‘small lane’ can be used by motorcyclist and narrow track vehicles.

  • avatar
    mkirk

    Will they build a DUI version with a tiny motor for states that dont require a licence for under 250cc vehicles. In N.C. they were known as Liquorcycles.

  • avatar
    shaker

    I just hope that the officials responsible for the loan know more than we do – I have no problem funding a company that will make American jobs.

    That said, there is a danger of these being driven by people that have no “motorcycle fear”. After the first few decapitation deaths (due to running one of these under the back of a jacked-up pickup on an icy highway), NHTSA will step in and take these off the road.

    These need to be driven by experienced riders, who know that the consequences of ANY accident (IOW, bike riders) will be very bad.

    • 0 avatar
      thelaine

      Trust government employees to make wise and honest business investments. Not to worry.

      • 0 avatar
        shaker

        While I admit that our Government isn’t the best that it could be, I’d argue that it reflects the quality of the electorate.

        If we had a more informed, thoughtful electorate that wouldn’t be swayed by simplistic, “black-and-white” arguments, and would vote upon issues of societal merit, maybe Gov’t wouldn’t be an object of our derision.

        Oh, and get money out of politics – it’s the driving force behind the “stupification” of voters.

  • avatar
    mkirk

    Can I get the full body modded to fit on a Polaris Slingshot Chassis? In all seriousness I hope it makes production so Top Gear can give it to The Stig to tip over.

  • avatar
    jdash1972

    Stop treating this like its real. There is no car, just a website. It will never exist and Elio needs to get a job, doing some meaningful work, like everyone else. They couldn’t give the piece of carp away if it were free.

  • avatar
    wkirkpa

    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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