A Tale of Two Automotive Startups in the City: Elio Motors and Lyons Motor Car

Most of the big news at the 2015 New York International Auto Show took place on the first day of the media preview, with the introduction of the Cadillac CT6, production bound Lincoln Continental and Honda Civic concepts and an all-new Chevy Malibu, as well as the Porsche 911 fighting McLaren 570S. With that in mind it’s easy to understand why the press conferences for Elio Motors and Lyons Motors were relatively sparsely attended, being held on the second press day, though the two startups faced different obstacles in getting attention. Elio’s stand at the show was with the trucks on the lower level of the Javits Center, away from most of the cars, and reporters, upstairs. Lyons Motors’ head Kevin Lyons held his press conference in the concourse on the main level, but it was easy to miss as they had no car on display, just an empty piece of carpet and a lectern.

Lyons Motor Car LLC founder Kevin Lyons at his New York Auto Show press conference. Photo credit: João-Pierre S. Ruth, xconomy.com

Both startups have gotten at least their share of skepticism but the two press conferences demonstrated, at least to me, the difference between a serious, albeit longshot, effort to bring something new to the automotive market, and something that’s more like complete vaporware.

Paul Elio at the New York Auto Show

There are some similarities. You have to love the romance of someone starting a car company and naming it after themselves. Henry Ford and Enzo Ferrari did it, so why not Paul Elio and Kevin Lyons? There are also some major differences. Elio is trying to reinvent the people’s car, inexpensive to buy and own, mostly for commuting. The Lyons Lyons LM2 Streamliner is aimed at a much more rarefied market, something more suitable to the red carpet. Jay-Z and Shaquille O’Neil were mentioned as being interested in the million dollar plus 1,700 horsepower, 290 mph carbon fiber hypercar that will not have a conventional wiring harness but some kind of single networking cable that will work wirelessly (why then have even one cable?).

Kevin Lyons explained not having their prototype at the media preview as being due to the car not meeting the company founders’ standards. The fiberglass and foam pushmobile they finally displayed during the public days does indeed look a little bit rough, and apparently the mockup was draped for much of the time but Road & Track’s Robert Sorokanich got photos. The quality of the show car and Kevin Lyons’ stilted interview with Jalopnik’s Michael Ballaban don’t fill me with confidence about the quality of the parts they will produce in the carbon fiber autoclave that Lyons said is being installed so they can make the chassis and bodywork in-house.

Lyons’ rambling off-the-cuff presentation during the press preview hit his bullet points, but never offered any real technical details which also didn’t make me feel like it was a serious effort. Lyons does have some experience as a fabricator and drag racer, so putting aside the BS about how the car will be wired (“no fuses, no circuit breakers” – yeah, that sounds safe), it’s possible that they might produce some kind of coachbuilt car based around an existing carbon fiber tub for something like a Daytona or LeMans prototype racer. However, I strongly doubt that it’s going to be competitive technologically or dynamically with the new McLaren 570S, to be sold at a bit more than 1/10th the price, let alone compete with 7 figure hypercars like the McLaren P1 or Porsche 918. It’s also not going to be ready nine months from now as Lyons says it will, at least not if they’re still at the pushmobile styling buck stage. If they couldn’t get the styling prototype ready in time for the NY show, I don’t think they’ll any more likely meet that nine month deadline.

I don’t want to diminish Lyons’ skills as a fabricator but making carbon fiber parts isn’t as simple as having an autoclave installed. There are a limited number of companies capable of producing large structural CFRP parts and there’s a learning curve involved. Much of BMW’s i8 and i3 EV program involves a billion dollar investment in an international supply chain for those cars’ carbon fiber parts. Ford is using Ontario supplier and race car builder Multimatic to fabricate the new Ford GT’s carbon tub and bodywork, not fabricating it in-house.

At his press conference, Lyons billed the LM2 Streamliner as “America’s Bugatti”. Of course if anyone at the Volkswagen Group thought that Lyons will actually build even one LM2, their lawyers would contact them about Lyons’ use of their Bugatti trademark.

Paul Elio is a little more practiced and polished at giving a press conference than Kevin Lyons but Elio Motor’s appearance at the NYIAS was actually the first time they’ve had a press conference or even a display at a major auto show. Their stand at the NY show was part of the road tour to major events that they’ve been doing to get their prototypes and the project in front of the public. For the most part they’ve been hitting things like the Woodward Dream Cruise or Daytona Bike Week and this is the first time, to my knowledge, that they’ve had a display up at a big corporate auto show media shindig. They were also on hand for the public days of the show. Unlike Lyons Motors, for their part Elio had an actual operational vehicle on display, the P4 prototype that I was able to test drive last summer. They also had some real news, not all of it great, though their transparency about what wasn’t good news encourages me about the project.

First the bad, well, so-so, news. Not long ago Elio released video of their purpose built IAV designed three cylinder engine being tested on the dyno. I asked Paul Elio if it met their power and torque benchmarks and he gave me a straightforward, “No.” Elio, who perpetually smiles, continued that everything was within 5% of their targets, within normal developmental range as he described it. Translated to numbers, 5% means that they were less than 2.8 horsepower shy of their 55 hp projection.

Also regarding transparency, guring his press conference, Paul Elio mentioned how their primary investor, real estate developer Stu Lichter owned the former GM assembly plant in Shreveport, LA, which they are leasing to build their $6,800 reverse trike. That sounded at odds with the published fact that the Caddo Parish government bought the plant and leased it to Lichter’s company. Lichter was at the press conference in New York so I asked him about the real estate deal and he was forthcoming with the fact that what Elio said wasn’t technically true. Lichter’s deal with the county is a lease to purchase contract that ends with a $1 balloon payment, what he described as a distinction without a difference.

Concerning other investors Elio is now describing his company as the second most successful crowdfunding effort ever, after the Apple Watch. So far the company has over 40,000 paid reservations and when I asked Mr. Elio how many canceled after their recent announcement that production won’t start until next year, he said “in the low hundreds”.

The company is also now soliciting equity investments from whom the Securities and Exchange Commission considers to be “accredited” investors. When I told Paul Elio that soliciting equity investors from the public, and describing product deposits as investments, all before starting production, might bring up uncomfortable associations with Preston Tucker’s problems with the SEC, he said that the actual investments will be regulated under the 2012 JOBS act and that the solicitation of individual investors is in response to one of the more common questions they get at public showings of the trike being about investment opportunities.

The company is still waiting on their application for $200 million in financing from Department of Energy’s revived Advanced Technology Vehicles Manufacturing loan program, which provided Tesla with $465 million in loans, and even more to Ford and Nissan. Tesla paid off its ATVM loan and Ford and Nissan have been current with their payments. Less successful was the more than half billion dollar loan to Fisker Automotive.

Regarding the Shreveport plant’s equipment, the surplus of which is being sold off by Comau as part of the startup’s financing, Paul Elio told me that so far they’ve sold “millions of dollars” worth of equipment, most of it for more than their anticipated prices. The loans for that equipment are still being paid off on schedule. The plant was one of GM’s most modern, having been only recently renovated, and Elio told me that the giant automaker has had people in the plant going over what they would like to buy back. Elio will only be using about 1/3rd of the plant floor space and related equipment, hence the surplus.

On the regulatory front, Elio Motors has had some success at the state level getting legislation enacted now in 26 states that carves out regulatory space for “autocycles”, enclosed three wheel vehicles. The company appears to be trying to avoid three-wheelers’ legal status as motorcycles requiring Elio drivers to wear helmets while at the same time making sure that any potential competitors would have to meet standards of construction and safety more or less established by Elio. Lousiana’s U.S. senator, David Visser, has introduced the Autocycle Safety Act at the federal level that would enable NHTSA to promulgate appropriate regulations.

From Elio’s press release on Senate Bill 685:

The legislation provides that autocycle manufacturers must immediately meet certain safety standards until such time as the NHTSA can promulgate final safety regulations covering autocycles. To be eligible for the new classification of autocycle, the vehicle must qualify as meeting Federal Motor Vehicle Safety Standards (FMVSS)—not limited to, but including most standards for passenger vehicles under 10,000 lbs. Some of the requirements will be FMVSS for seat belts and seat belt anchors, child restraints, roof crush and meet upper interior impact standards. Autocycles also must have front and side curtain airbag protection. In addition to numerous safety standards needed for qualification, autocycles must meet FMVSS for motorcycles as well. The legislation also requires the continued investigation of additional standards appropriate for autocycles, developing additional safety standards for these vehicles.

About those crash standards. In the past TTAC readers have raised concerns about the crash safety of the Elio trike’s outrigger, motorcycle fendered front wheels, particularly how they would affect the vehicle’s safety in the new partial offset front collision test. I asked Paul Elio about that and he said that there were indeed some issues in crash testing the reverse trike because of the design, though they have more to do with the side offset test, which uses an angled ram hitting the side of the car. Apparently they can’t get the sled to hit the narrow passenger compartment without first getting deflected by the wheel. Elio said that they are working with regulators to come up with an appropriate way to implement that test.

Regarding the partial offset front crash test that involves the ram hitting the front of the car but to the side, not on center, Elio says that the fuselage is so narrow that the partial offset test might completely miss the trike’s front crush structure. In that case, energy would be absorbed as the ram hits the tire, and then the wheel and suspension would likely rip off the vehicle. While it doesn’t sound pretty, it also doesn’t sound particularly unsafe. In a conventional envelope body design it seems to me that more energy would be transmitted to the passenger cell as the bodywork around the wheel and suspension crushes.

A few new details on the Elio vehicle itself were released. The automatic transmission that will be offered will be a dual clutch unit based on the manual transmission used in the Elio trike. The instrument panel has been redesigned, and it reflects Elio Motors goal of using as many off the shelf components as they can. The new IP uses almost all existing supplier tooling, but by replacing the speedo and tach needles with discs and covering most of those gauges with brushed aluminum covers, they’ve come up with something that’s attractive, modern looking and not just the same old gauges.

When I drove the prototype, while vision to the rear is fine with the two side mirrors, there’s no back window and even if there was one, the tandem seating means a conventional windshield mounted rear view mirror won’t really work. As I said in my review, you can see behind well enough with the mirrors, but psychologically most people would like some kind of view directly out the back. I asked Paul Elio if they were considering offering a rear facing camera and display as standard equipment and he said, “Well, with the cameras costing about $10 today, yeah, that’s a possibility”.

Alternatively, rear cameras would be installed with other accessories and options post production, in one of the company’s seven proposed fulfillment centers. The way it is supposed to work, customers will order cars from a factory store. Other than transmissions and exterior colors, they’ll be made identically at the factory and the fulfillment centers will have cars in stock. Options and accessories will be swapped out at the fulfillment center, with the replaced parts shipped back to the factory, and the cars will be trucked to the local factory store by the next morning for delivery.

At the Elio announcement, when they opened it up for Q&A I asked Paul Elio when they’d have one of their own engines in a prototype car and he said that would happen only after they built about 30 engines for validation, with some used for destructive testing. At the Lyons announcement, between the lack of a car and Kevin Lyons’ literally unbelievable hype I couldn’t come up with a question that wouldn’t have gone past mere skepticism into mockery. Like I said, I like the romance of someone starting up their own car company so I kept my mouth shut, lest I rain on Mr. Lyons time in the spotlight. I don’t know how professional it is for a writer to ask, “Isn’t that complete and utter bullshit?” I will, however, make what I think is not a very bold prediction: Elio Motors will bring their trike to production before we see the first running LM2 Streamliner prototype from Lyons Motors.

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