By on July 9, 2015

ELIO-P5-RENDER-03

Businesses aren’t the only groups of people who try to influence what we publish here. TTAC has been getting emails from a number of people who put deposits down on the yet-to-be-produced Elio trike, only to become disillusioned after production has been pushed back a number of times.

There are at least a couple of Facebook pages devoted to disaffected Elio enthusiasts that accuse Elio Motors and Paul Elio of misleading people. In addition to the delays, most of the complaints seem to center around the fact that the company is promoting and taking deposits for a $6,800 vehicle when Elio hasn’t yet raised enough money to start production of a car that Paul Elio admits doesn’t yet meet their advertised price point.

The company has been using social media to promote the enterprise and its critics have seized on Elio Motors’ Facebook page as a venue to express their displeasure. Words like “liars” and “scam ” have been tossed around. Consequently, a number of those critics say they have been banned from that page by Elio Motors.

TTAC managing editor Mark Stevenson and I looked into the complaints and we spent some time going through the critics’ own Facebook pages. We came to the same general conclusion: most of the furor was being generated by the same half dozen or so unhappy prospective customers, making the same complaints about missed deadlines, a lack of financing to get to production, and skepticism that the trike will be delivered at the promised $6,800 MSRP. What concerned me more than these pretty well known issues was the charge that Elio (the company, not the man) was censoring its critics by banning them on Facebook.

Whether spurred by their complaints or by my own inquiry about the bannings, Paul Elio told TTAC a couple of weeks ago that at least some of the the bannings were “a mistake” even though he claimed they were mostly due to people using abusive language. At the time he told me he was considering a blanket unbanning.

While banning people from a company’s Facebook page can be spun as censorship, just about anyone who has ever created online content knows how abusive internet commenters can get, so I have some empathy for Paul Elio. It’s not his job to provide a forum for people to say bad things about him.

This was all transpiring against the background of Elio getting ready to announce that, due to substantial interest, they were going to be opening up their enterprise to smaller individual investors. In February, the company announced that it was going to be using the statutes in the 2012 JOBS act to offer equity stakes to accredited investors (those with 7 figure assets and incomes of greater than $200k/yr). Funds raised from those investors are currently being used to fabricate the final pre-production P5 prototype that will be using Elio’s own engine and a production spec transmission from Aisin. Elio Motors says that subsequent to announcing opportunities for accredited investors, they were inundated with inquiries about investment opportunities for smaller investors.

Now, investors with fewer assets and smaller incomes will also be able to take an equity stake in the company, investing as little as $250.

Screen-Shot-2015-06-23-at-2.14.47-PM

At the time I spoke with him about the Facebook issue, Paul Elio asked me to hold off writing about the Facebook unbannings until the investment opportunity was announced. While I’m happy to have the good rapport that I have with Paul and his team, I’m not on that team and we publish things at TTAC based on our judgment of their newsworthiness, not based on what’s most helpful to a story’s subject. As it remained to be seen what would happen on Facebook, we’ve delayed this post until now.

So far it looks like Elio has been true to their word and unbanned all of their critics, though it appears that they’re reserving their right to re-institute bans based on what Paul Elio describes as bad behavior. As I expected, being unbanned hasn’t really mollified the critics. Just about the only thing more passionate than a convert is a convert who has renounced their faith.

In the meantime, Elio Motors has gone ahead with their crowdfunding effort directed at small investors, and they’ve announced that there has been significant interest. In less than three weeks, more than 5,000 small investors have “expressed non-binding interest” in putting up over $17 million, via the startengine.com website. What that means is that per the Security and Exchange Commission’s rules, while no money has yet changed hands, those investors have indeed pledged that amount of money — though they can opt out, hence the “non-binding” part. When the enrollment period ends at on July 31, Elio will then present documentation of the investors’ interest to the SEC and, if granted approval, Elio will then make those investors a formal offer.

The company is hoping to raise a total of $25 million through this route. Elio says those funds will be used to build 25 pre-production validation vehicles. All along, I’ve felt that the most legitimate criticism of the Elio enterprise is whether or not the company will be able to raise the $200 million that it says it will need to start production. While it’s only a fraction of the amount needed, $25 million is a good start.

At the same time, the automotive history buff in me knows that Preston Tucker was prosecuted by the Securities and Exchange Commission over how he raised money from investors. The infamous Dale’s Liz Carmichael was also prosecuted for fraud relating to investments in the company. While Elio Motors needs to find investors, I think that taking on grassroots investors creates another potential issue for the company’s critics.

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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55 Comments on “Elio Unbans Facebook Critics, Has $17 Million Pledged From Small Investors...”


  • avatar
    danio3834

    I’ve really enjoyed the continuing coverage of Elio. Being in this industry, I’m very skeptical this startup will be able to gain any traction or turn a profit. If they ultimately fail, TTAC will have quite the documentary from beginning to end.

    • 0 avatar
      Pch101

      If they fail? Shouldn’t we be betting on the date instead?

    • 0 avatar
      ScarecrowRepair

      It’s an odd car and odd startup plan. I bought in to the reservation system, and won’t panic if nothing ever comes of it. Somehow I can’t imagine them ever selling 250K cars a year, not even to start with. But at the same time, their plan for customers to finance them via a special gas credit card strikes me as sheer genius, and I can’t help but feel they *ought* to sell a bazillion cars under that scheme. (Their custom gas credit card charges three times as much for the gas, with the extra going towards car payments. The rationale is that if the Elio (at 84 mpg) gets more than triple the mileage (27 mpg) of what you would otherwise drive, the Elio is basically a free commute car.)

      • 0 avatar
        pleiter

        The question I have for Elio on the gas-card payment plan, is, how do you prevent people from simply putting non-card gas into the vehicle ?
        You can make them sign a contract, repo the vehicle, blah blah blah but I do not see a simple and cheap enforcement for an incredible easy dodge out from the agreement. Reminds me of Star Wars (not the movie).

    • 0 avatar

      I concur. There’s no ‘automotive life’ outside the established car brands, unless your name is Elon Musk, which is the exception to the rule, or unless you’re into boutique car building like Pagani. As a matter of fact Elio’s first hurdle should have been finding wealthy investors or a major OEM to support its plans. The installment plan smells like what Aptera did. And look how that turned out to be.

      • 0 avatar
        danio3834

        If I were Elio, I definitely would have tried to source more from existing OEMs, especially the engine. That choice alone would have gotten these vehicles into the hands of customers a lot faster and started generating revenue. With some serious sales and revenue, they’d find it a lot easier to raise more cash.

        Even if they were dead set on selling a car with their own engine, they could have implemented that later on.

    • 0 avatar

      You can thank the Best & Brightest. A comment to a post of mine about a cheap Chinese reverse trike that suggested that I look into Elio and when I looked into it, it seemed to me that while plenty of skepticism was warranted, from a technical standpoint it was achievable, their decision to use as many off-the-shelf components that they could seemed like a smart idea, and who doesn’t like the romance of someone starting up a car company?

      Also, being a contrarian, I was put off by so many in the automotive media being overly skeptical, and I thought there might be a niche for a writer to say, “wait a second, it’s not such a crazy idea”.

      The result is that TTAC’s coverage of Elio is trusted enough that the company’s critics reached out to us to look into the Facebook issue. At the same time Paul Elio and Jerome Vasallo, Elio’s VP of sales, have characterized my coverage of their company as “fair”.

      The thought just occurred to me that perhaps the best thing that could happen for me as a writer would be for Elio to get to production and then fail after making a few thousand cars. I could then write the authoritative history on the marque, like John Lamm did with DeLorean.

  • avatar
    Gregg

    I wish one of the existing auto companies would buy the idea from Elio and develop such a vehicle.

    • 0 avatar
      indi500fan

      “buy the idea from Elio”

      Does Elio have patents or intellectual property that is actually proprietary? Or is nobody else offering this vehicle because the market research says it’s not going to be a viable venture?

  • avatar

    If I had just $2 Million in crowdfunding, it would go into building supercars that 6’6 tall 350 pound men could actually fit in.

    DE ARTHUR JONES is 6’3 and 340 pounds and bought a Corvette – only to realize he couldn’t fit in it and had it returned.

    I’m thinking to myself…

    All the football players, basketball players, rappers and others who actually have MILLIONS OF DOLLARS are not being catered to.

    WHY?

    And for any dumbazz who wants to say: “oh well making it spacious will add mass” I can only reply that THEY DON’T GIVE A DAMN HOW WELL IT DRIVES. They just buy them to SHOW OFF.

    • 0 avatar
      indi500fan

      Well I think your idea has a better chance of becoming a profitable ongoing venture than Elio.

    • 0 avatar
      Tinn-Can

      Did he buy a youabian puma instead then?

    • 0 avatar
      MrGreenMan

      Wouldn’t Rolls Royce be positioned to capture this? Still a car, yet you were supposed to be able to walk into them.

      But you’re right on with your larger point: Without something like the Reagan-era import restrictions, it’s very hard to build up from a plebe model to make something luxury; if you can grab the profits at the top, you can finance the scale out to achieve volume at the bottom — if you even have to do the volume and weren’t thrilled with your hyper-exclusive profits.

    • 0 avatar

      They are being catered to, noticing the big SUVs with the big wheels and close to super car performance.

  • avatar
    CoreyDL

    “I think that taking on grassroots investors creates another potential issue for the company’s critics.”

    I would have to agree. As you scrape down closer to the bottom of the bucket for investors, as it were, more people will start shouting at earlier stages. They’ll be angry they haven’t seen a return on their “big” $375 investment! “I meen, com on! What is this guy doing w/all of my money?!”

    There’s a big difference between larger, sophisticated investors and Joe Public who signs up on a crowdfunding site. I see this certainly as a big PR negative (and maybe a little credibility as well) for Elio.

  • avatar
    bryanska

    I’d buy one. I really would, up to say 9 grand or so.

    It’s succeeding in the marketplace of ideas. Demand is there. Only the traditional auto-industry barriers stand in its way.

    As car guys we should be championing this. Better the Elio than the CRZ.

    • 0 avatar
      indi500fan

      “It’s succeeding in the marketplace of ideas.”

      Don’t confuse internet “buzz” and Farcebook “likes” with commercial success.

      • 0 avatar
        CoreyDL

        Hey, it has already made over $14B theoretical dollars.

      • 0 avatar
        bryanska

        There is a lot of meat here. Some real benefits to the design, and 10,000 deposits isn’t nothing. Their viral campaigns are working, and that counts for a lot.

        Before you laugh, I know what it takes to commercially succeed. I have a top 20 MBA, was in R&D for six years, hold two commercialized patents, and have been in market research for six more. The whole Elio thing has several attributes in common with successful products that have launched in the social age. Their next step is to deliver, and I’ve got my fingers crossed. It’s far from a slam dunk, but all they need is money to get off the ground and sell to early adopters. After that it’s anyone’s guess, but I’d bet that 5,000 finished units would go a long way to answering the Elio question.

  • avatar
    BDT

    I honestly hope they pull it off. It sure seems the odds are stacked against them, though.

  • avatar
    whynot

    I know why they are called trikes, but I can never take anything referred to as such seriously.

  • avatar
    bkrell

    Greetings from Shreveport, LA , where our parish (aka county) government bought the old GM plant (old Colorado/Canyon, Hummer H3 plant) from the RACER Trust for a princely sum in expectation of leasing a large chunk of the facility to Elio. We’ve been privy to a few Elios at local events (parades, state fairs, etc) but otherwise…not one bit of action on the Elio front.

    • 0 avatar
      indi500fan

      I think whatever “action” is taking place currently is up in Michigan at their engine development contractor, IAV.

    • 0 avatar

      The entire facility has been leased by Stu Lichter’s real estate company, which has subleased about 1/3 of the space to Elio. Lichter is Elio’s primary backer at this point, though money raised with the recent JOBS act investment offers may exceed Lichter’s stake.

      I spoke to Paul Elio today about their financing and assuming the SEC approves the current solicitation, I think the figure that he said they’ll have raised is about $70 million. I will say that he sounded more optimistic about reaching their $200 million goal than he sounded in prior conversations that I’ve had with him. He’s always thought they could do it but he sounded very certain today. The investment solicitation is apparently going well enough that the topic of Elio’s Dept of Energy ATVM loan application didn’t even come up in our conversation today. The fact that Elio applied for one of those loans increased my skepticism about the venture and I said here at TTAC that more private sector funding would ease that skepticism.

      They could still get the gov’t funding, so far their application has not been denied, but I got the impression (and it’s only my read on the situation, nothing that Paul Elio has said explicitly) that they’re less concerned about the ATVM loan now that it appears they’ll be able to raise significant amounts of cash via private investors.

  • avatar
    RedStapler

    If fuel was currently at at $100/bbl vs currently a bit above $50 Elio would be having a much easier time.

    I wish them the best but don’t have a lot of optimism given the high costs and low margins of car manufacturing. Their best case scenario is some event that doubles or triples fuel prices right when they come to market (if they ever do).

  • avatar
    shaker

    Live by the Internet, die by the Internet… (a double-edged sword if there was one).

    I’m wondering what the insurance companies are going to think of a $6,800 “trike”.

    Quite possibly, the monthly insurance bill will be higher than the vehicle’s.

  • avatar
    KixStart

    From the article (nice article, by the way): “This was all transpiring against the background of Elio getting ready to announce that, due to substantial interest, they were going to be opening up their enterprise to smaller individual investors.”

    I’d guess that the “substantial interest” of the smaller investors takes a back seat to the “substantial need” of Elio for additional investment as a driver for this.

    I still think it was a mistake not to use an off-the-rack engine. This decision is certainly holding up the time line and burning capital.

  • avatar
    fred.smith

    Ronnie, thanks for the article and for your efforts. Since you seem to have access to Paul Elio, you might consider asking him for the answers to real questions instead of the fluff he normally fields. Here are a few, not in order of importance:
    How much is in escrow for the non-refundable deposits. Please name the escrow company holding the refundable deposits.
    Are you still short $230M? If not, how much?
    How much have you spent on engine development so far? How much more do you have budgeted prior to production? How much will it cost for the equipment needed to assemble the engines?
    In the St Francis University speech you admitted that you had never contacted any engine manufacturers. Why did you decide that negotiation and buying off-the-shelf would work out cheaper for all the rest of the vehicle, but wasn’t even worth making an effort in the case of the engine?
    Why have you abandoned, at least up until the P5, all real-world testing of the prototypes?
    Why have you decided against rapid prototyping and iteration?
    Why did you not test the acceleration and mpg of the P3 & P4 with the Geo engine, knowing that the Geo engine has proven benchmarks in its original platform. That would have given a clean indication as to whether the design actually offered significant improvements in NVH, performance and economy.
    Why do you keep advertising $6800 and 84mpg, when you have admitted that your best computer simulations are $7300 and 81mpg. No improvement in those numbers has taken place for 2 years.
    Why does your snow video claim ABS and traction control as reasons for the snow handling capability, when the vehicle in the video has no ABS or traction control?
    What are the intermediate steps (Gantt chart) to production? If you had full funding tomorrow, what concrete steps to production would we see? How much time and money would each step take? You state that transparency is your claim to fame – what will be the evidence that you are actually on track to production?

    There are lots more serious questions that have not been addressed, but that would be a small start. Thanks for your consideration.

    • 0 avatar
      LillyMayPatterson

      Thank you Ronnie for investigating these people. It was time to let us all know that there is ONLY A HALF DOZEN OR SO of them, and the sock puppets. 40 thousand plus people and ONLY A HALF DOZEN OR SO of them. Still yet other sock puppets with the same questions pops in. Thank you again.

      • 0 avatar
        ETSAND D

        40,000 in a nation of over 300 million licensed drivers is practically nothing…. 1.34%

        Needs to be 250,000

        • 0 avatar
          CJinSD

          Your arithmetic makes me sad. Your grasp of demographics is even more disheartening. 90% of Americans are drivers? We’re going to need more children. 1.34% of 300 million would be about 4 million. Nobody is selling 4 million of any road vehicle in this country annually, so any planned car that needs more than 1.34% of 300 million people in the US to buy it every year is doomed, much like anyone that received the same quality education as you did.

  • avatar
    wmba

    Ronnie, you’ve done a great job telling us about Elio Motors over the years. More than they deserve in any sense of the word.

    I went to their web pages right there back at the beginning, to find the usual sort of evangelization you always find on these sort of startups. To paraphrase, “We the down-trodden, need cheap transportation, so have invented a completely impractical piece of crap that will sell for only $6800 and get 84 mpg. Get in on the ground floor and contribute to the pushing back of capitalists who force you to buy grossly polluting vehicles. We the people have spoken. Send money to get on the list.”

    Whether Elio is sane or not hardly matters. He obviously has the brainpower of a minnow, since 10 minutes with a calculator showed even then he was talking out of his hat. New engine, new chassis, blah, blah, blah. $6800? How much does a decent motorcycle or quad cost? I mean, when or where does reason enter the Elio equation?

    I’ve said this before – this outfit is a complete waste of time and money. The proprietor is either mad or naive, and hasn’t got the faintest clue about manufacturing. But his words are the siren song drawing in the even more clueless fuzzy-wuzzy people who want to believe in something, and he has shorn them of their hopeful money, while maintaining his over-optimistic style.

    You can tell people they’re being fleeced, you can prove to them they’re being ripped off, but as internet scams prove every day, there’s always someone who’ll believe the BS come what may.

    How much salary does Elio take home? You know, for supplying the top-shelf management chops to run this dog and pony show? Gullible people get taken.

    Now let’s hear about the next new miracle engine. We even get MIT proposals on that, OPOC and twenty other earnest types, plus the ones with a donate button on their websites. Elio has a donate button couched as a downpayment.

    The only fun I get reading about Elio is how stupid the whole thing is. A half-dozen people complaining about the money they’ll never see again banned from ruining the Elio freak show on Facebook? Say it isn’t so. Gosh, why let reality intrude on the “lift up our hearts to a genuine person of the people trying to relieve the pressure of The Man crushing your shoulders for excessive transportation dollars.” And this show has gone on for years with essentially zero progress beyond some twerpish engine exercise to keep the faithful from demanding their money back forthwith.

    No wonder the old-time travelling Medicine shows worked so well with their bottles of elixir to fix every disease that ails you. At least those bottles had a big dose of laudanum included.

    • 0 avatar

      I asked Paul Elio about his salary. His response was that he’s put more into Elio Motors than he’s taken out.

      If it’s a scam, it’s a very long con.

      I don’t think they’ll sell a quarter million of them the first year they’ll be on sale, if they get that far, but I can see them carving out a niche where they’re selling thousands of vehicles a year.

      I’ve joked about the Elio trike being rolling birth control, but it just might become dorky chic.

  • avatar
    Dr. Remulac

    I am long time visitor to TTAC and rare commenter. My first exposure to Elio was on this site 2 years ago. I’m a hopeful skeptic. I understand every reason why this venture can and should fail. The base price seems unreasonable, but if the average transaction approaches $10k I find it plausible. The 250k per year seems like fantasy, but if 20-50k/year in the US allows his business to exist, I think it can happen.

    My engineering, practical side thinks if we could wipe all our brains clear of the last 100 years of auto history; technologically and economically and we had to start from scratch knowing what we know what we actually need today for our transportation needs, this is the vehicle that a large portion of commuters should own and use. For that reason I put a deposit down and will invest maybe a weeks pay as a gamble in hopes that I can buy one some day.

  • avatar
    ETSAND D

    Evidently the writer of the article missed looking into…

    1. Elio’s claims of 5 star safety ratings in spite of the fact that the NHTSA said that the would NOT crash test the Elio.

    2. Elio announcing 5 different start of production dates in spite of the fact that they were severely underfunded and therefore had no real hope of actually being able to meet those projected “self-imposed” deadlines. Therefore one must ask, why did they do that? Short answer… to convince people to send money!

    3. Claiming that the value of the surplus equipment that they are trying to sell has a market value of $400 million…. yet the seller (Racer Trust) stated that the value of the equipment sold was $26 million (found in the Caddo Parish Minutes of Aug 2013). Why would Elio state an inflated value?

    4. Uses 80% “off the shelf” parts. It appears to me that most of the parts on the Elio are “Elio specific” and won’t be found off the shelf.

    5. Marketing directed towards the average Facebook user. Let’s just be honest here… look at the things that are posted on Facebook. Most of the people on Facebook are generally gullible and tend to believe almost anything if it’s given the “proper spin” and spoken with authority. Just take a look around at the stupid things people tend to post. And besides, the average user doesn’t really take the necessary time to do any real research. Most average Facebook users are NOT “early adapters” or have any savvy about the marketing strategy used by start ups seeking “reservation funding.”

    6. ATVM Loan. That’s probably not going to happen. They’ve already said that they were targeting suppliers over manufacturers. If they get it, then GREAT! But I wouldn’t hold my breath waiting for it. Plus, it’s clearly written on the application that the ATVM Loan is for EXPANSION CAPITAL…. not working capital. And Elio is seeking the loan for Working Capital.

    There are many other issues that weren’t addressed such as, what will Elio do if they don’t meet this current deadline? The people of Shreveport are pissed off because those 1500 promised jobs have not been created. What will Elio do if they miss the deadline and Racer Trust doesn’t grant another extension? Will Elio have the capital to pay the fine? What will Elio do if they lose the plant? The longer they delay, the more that becomes a real possibility. And they still need to get the thing certified by the EPA…. how long is that going to take? Where are they in that process?

    Also… I spoke to my broker about this Reg A offering. He said that this is basically a “Hail Mary” move that will do more harm in the long run that it will do Elio any good. It could be construed as a move of desperation by serious, potential Angel investors. Reg A is not really the right route to be used to raise the amount of capital that Elio needs…. need under $10 million? Then yes, Reg A is possibly a good way to go. Need upwards of $200 million? No… Reg A will probably not meet your needs. The fact that Elio is choosing this route speaks VOLUMES to those who regularly invest in companies and start-ups.

    Now don’t get me wrong… I HOPE, for the sake of all who have sunk money into Elio, that this thing gets off the ground and goes into production. I actually LIKE the concept and would purchase one once it’s been on the market and has shown itself to be a proven product. But I won’t invest or purchase a reservation…. or try to convince others to do so.

    • 0 avatar
      Dr. Remulac

      Are you one of the half dozen angry skeptics? One consistent theme I have seen from the angry bunch is bad reading comprehension and failure to understand risk and therefore trying to save everyone else from taking a risk.

      #1. Elio never stated they achieved 5 star safety rating, marketing a few years ago said engineered for or the like. Their goal is to have equivalency with a 5 star safety rating and they acknowledged there is currently no one to one equivalency with NHTSA because it is obvious the Elio is not a car.

      #2. So what if they had 5 different start dates, tell me how many Tesla had. The trashing of Tesla is well documented on ttac.com. Did you believe the first date by Elio and now are bitter because you really believed a best case scenario would come true?

      #3. Claiming the value is $400 million, I don’t think you could ever link that claim to Elio. Stretching the truth again?

      #4. Unless you create a parts list, you are just making assumptions. Again the marketing has also clearly stated these as goals anyways. I hope you understand what a goal is and why they are set.

      #5 and #6. Your opinions.

      • 0 avatar
        ETSAND D

        #1….. I didn’t say that Elio said that they have achieved a 5 star safety rating. They DID claim that the Elio WILL receive a 5 star safety rating I have a number of screenshots proving that)…. which prompted “Kathryn Henry, a spokesperson for the Department of Transportation, says the National Highway Traffic Safety Administration will not test the Elio though, as it is not technically a car.”
        http://finance.yahoo.com/blogs/daily-ticker/the-new-us-automaker-s–6800–84-mpg-elio–142815228.html

        2. Tesla is actually building cars… Elio is not. They were not funded when they announced the past start up dates. Without funding, there was no way they would be able to meet those deadlines. That’s just a simple fact. Also… Musk is a billionaire who will toss his own money into the pot… so it’s likely the Model X WILL eventually be built. He also paid off his ATVM loan. You really think Elio would be able to pay back an ATVM loan if they got one? Hell… they can’t even attract serious investors…. thus the reason for trying a Reg A

        3. too bad you can’t post screenshots on here because I have at least a half dozen of them from their facebook site stating that very thing. So I’ll do the next best thing and provide a link to Elio’s OWN SITE saying as much!….

        “The current list of equipment has a value of over $17 million dollars which represents less than 15% of the total available surplus equipment. That is a lot of equipment to sell!”
        https://www.eliomotors.com/the-elio-plant-equipment-11615/

        the value of the equipment is stated within the MINUTES OF THE MEETING OF THE CADDO PARISH COMMISSION’S PARISH & URBAN ECONOMIC DEVELOPMENT COMMITTEE HELD ON THE 2nd OF AUGUST, 2013, Mr. Bruce Rasher, of Racer Trust said that the value of the equipment that was sold to Elio Motors was was $26 million. You can look up and download the PDF yourself.

        Here is the quote from the minutes… “Ms. Lynch would also like to know who would be responsible for the upkeep of the property. Mr. Rasher said Mr. Lichter would have to maintain it. This does not include the 90 acres in surplus which the Parish would have to maintain.
        She also inquired about the value of the equipment that was sold to Elio Motors. Mr. Rasher said that the value was $26 million, and it was all sold to Elio Motors. Elio Motors paid $3 million six months ago; the next payment that is due is the $2.2 million payment for equipment. Three months later, a payment of approximately $175,000 per month is to be paid. The final payment should be made approximately 30 months from now.”

        4. Dude… you can simply LOOK at the Elio and see that 80% of the parts CAN NOT be off the shelf!

        5. Evidently YOU haven’t done as much research as you think you have… and have therefore proven my point.

        6. as you previously stated, the Elio is a motorcycle… the ATVM does not loan to motorcycle manufacturers. Again… easily found with a quick internet search. You can also go to the DoE website and download the requirements.

        As for the possibility of losing the plant, read what Elio’s own Board member has to say…

        “Developer Stuart Lichter, who’s leasing space in the old General Motors Plant to Elio Motors, said he is a firm believer in the start-up automaker, but Elio Motors will not meet the 2015 deadline to reserve its space in the plant as outlined in their contract.
        “I’m a real great believer in the car, and I’m also a real great believer in what it would socially do for the economic impact on people who need a low-cost vehicle of quality,” Lichter said. “I’m really committed to doing everything I can to get this car into production. But, at the same time, we have a facility. We have investors that we have to be responsible to so I can only go so far.””
        http://www.shreveporttimes.com/story/money/business/2015/01/16/production-wheel-elio-delayed/21849385/

        Do you want further proof? Go to the Facebook site Elio Truth Seekers & Doubters. There you will find screenshots as well as links to prove what I have stated.

        • 0 avatar
          Dr. Remulac

          1. Comprehension fail, read the text of your own link “The automaker is engineering it for a 5-star crash test safety rating.” That sentence is not in any way legally equivalent to what you stated as “Elio’s claims of 5 star safety ratings” nor should any English speaking adult make the same conclusion.

          2. Comprehension fail. Tesla was not manufacturing cars when this ttac.com site was all over them for failing to meet stated goals. Of course they are manufacturing cars now, what do you think my point was? Your aware Elon Musk himself, on 60 minutes, stated he was almost broke and needed money from others right before Tesla started manufacturing, right?

          3. Until you can link Elio stating $400 million, I have to assume you are once again stretching the truth or it is your failure to comprehend the written English language. The only info I see from an Elio source is it has it in the range of low $100 millions. You even included that same estimate in your argument.

          4. Once again, without parts list, you have no credibility.

          5. You never made any point in the first place other than “dude they market on facebook, what bunk”. Also you pointed out people post stupid stuff on the internet, of course you never do. You win that one.

          6. I’ve already read and laughed at most of the paranoid thoughts at your fb site, thank you very much for the entertainment.

          • 0 avatar
            ETSAND D

            you sir are a class A idiot. Enjoy your Elio! Oh wait…. you don’t have one, do you!

            Go back to Remulac and narfle the garthok! lol

          • 0 avatar
            ETSAND D

            talk about “comprehension fail”… if you laughed off all of the info posted on that site (which includes LINKS to prove what’s said on there)… as well as the links that I posted on here, then you deserve to lose your money.

          • 0 avatar

            It’s a long standing tradition at TTAC to avoid name-calling. There even was a time when the bad-word-filter flagged comments with the word “idiot”. Let’s keep the discussion civil folks.

    • 0 avatar
      indi500fan

      The 80% “off the shelf” might be achieved if you use parts count rather than parts value (language parsing imho).

      In other words, using each individual bolt, nut, stud, washer, rivet, cotter pin, plastic push pin fastener, tie wrap, etc. as one part of a total of many thousands.

      So 250 electrical connectors counts 250 times as much as the one cylinder head in the calculation.

    • 0 avatar

      “Evidently the writer of the article missed looking into…

      1. Elio’s claims of 5 star safety ratings in spite of the fact that the NHTSA said that the would NOT crash test the Elio.”

      I’m the writer of the article. As referenced by some comments, this is not the first time that I’ve written about Elio Motors. In previous coverage of the Elio venture I’ve discussed the fact that as a three wheeled vehicle there isn’t a NHTSA testing protocol and that Elio says they’ll do they’re own crash testing. I’m on record as calling for them to make that testing transparent.

      “2. Elio announcing 5 different start of production dates in spite of the fact that they were severely underfunded …”

      I’ve mentioned their delays in both previous coverage and this post. From my earliest coverage of the company I’ve pointed out that the biggest barrier to them coming to production is a lack of financing.

      “3. Claiming that the value of the surplus equipment that they are trying to sell has a market value of $400 million….”

      I think it would be a good idea if Elio Motors published how much revenue they’ve recouped from selling off the plant’s surplus equipment. A few months ago Paul Elio told me that so far it was “millions”, but some transparency wouldn’t hurt.

      “yet the seller (Racer Trust) stated that the value of the equipment sold was $26 million (found in the Caddo Parish Minutes of Aug 2013). Why would Elio state an inflated value?”

      That’s a good question, but there’s undoubtedly a price difference between selling surplus equipment in one lot and selling off individual items. Individuals and businesses buy surplus lots all the time and make money marketing the individual items.

      However, I do have contacts in the used machinery business. I’ll ask them to look into Elio’s selling off of the Shreveport factory’s machinery.

      “4. Uses 80% “off the shelf” parts. It appears to me that most of the parts on the Elio are “Elio specific” and won’t be found off the shelf.”

      It isn’t just a question of “off the shelf”. If they can get a supplier to use existing components and tooling and only need to modify something slightly for their purpose, that can save a lot of money. For example, adding a couple of parts to an existing instrument cluster gives them something that looks bespoke.

      The frame and body panels will be Elio Specific, as will, I’m guessing, glass and some interior panels, and of course the engine. Seats are probably not bespoke with the exception of embroidery or trim. The instrument cluster is an off-the-shelf unit with some modifications. The steering wheel might have a unique badge, but it will probably be generic. I’m sure they’ll use a steering rack that’s modified from an existing production piece at a supplier. With the double wishbone suspension and pushrod activated shock absorbers up front, I don’t know how much would be off-the-shelf, though they could be using existing coilover units and a possiblly a production upright/knuckle/spindle. The transmission is an existing Aisin unit. They can probably use an off-the-shelf master brake cylinder and vacuum unit. It’s possible that they could use an off-the-shelf radiator. A big savings would be achieved by using an existing headlight assembly but I’m not sure they’re going down that route.

      In any case, there a lots of small components and parts that don’t have to be engineered from scratch. Whether or not that adds up to 80% I don’t know.

      I do know, as someone who is working on getting an invention of my own to market, what was on the design brief at the project’s start may necessarily have to change.

      “5. Marketing directed towards the average Facebook user. Let’s just be honest here… look at the things that are posted on Facebook. Most of the people on Facebook are generally gullible and tend to believe almost anything if it’s given the “proper spin” and spoken with authority.”

      It’s 2015. Social Media is a part of the PR mix just as crowdfunding is a part of raising capital these days. I do find it interesting that someone who uses Facebook to criticize Elio criticizes Elio for using Facebook to sell cars.

      “6. ATVM Loan. That’s probably not going to happen.”

      I’m on record as saying that applying for the ATVM loan negatively affected my opinion of Elio’s chances of making it to production.

      “As for the possibility of losing the plant, read what Elio’s own Board member has to say…

      “Developer Stuart Lichter,..”

      That quote you pulled was made in January of this year. Three months later, at Elio Motors’ New York Auto Show press conference, I spoke with Stu Lichter and he sounded as enthusiastic about the project as ever. I specifically asked him about his lease from the parish and Elio’s sublease and he didn’t indicate any problems.

      Lichter’s not going to lease the facility out from under Elio. He’s Elio’s major financial backer.

      • 0 avatar
        ETSAND D

        I agree with you about the name calling… my apologies. It was a knee-jerk reaction to his insults directed towards me.

        As for my list, it points out just a few of the MANY problems with Elio’s claims. It appears you agree with many of the points I’ve made… at least to some degree.

        As for #3, here’s a little more info about the “surplus equipment” from the Racer Trust website…. “Since March 2011, GM had continued production under a lease arrangement with RACER. GM ceased production at the plant on August 30 and notified RACER that it would vacate the site effective November 30, after a period of decommissioning and equipment removal and storage.”
        EQUIPMENT REMOVAL. Not abandonment as the representative on Elio’s Facebook site constantly has stated.
        Evidently, the equipment left behind by GM was most likely unneeded, of little use and probably of little value to them. Now it’s true that there’s likely SOME value to the equipment since it’s not totally worthless… and that some of what was left was done so because there was already tooling and support systems in place on existing GM lines which obviates the need for more of the same; then there’s the cost of transport and storage of unused gear. But to sell $400 million worth of equipment for just under $10 million is very hard to believe (again, that purchase price that was to be paid by Elio can be found in the Caddo Parish Minutes of Aug 2013). They did not ABANDON anything useful to them…. they left equipment that was of no use so that it could be sold off to help restructure their debt.

        http://www.racertrust.org/News/10546

        As for how much of the equipment they’ve sold, here is an Ebay seller history. This is what it states as of today….. Items Sold: 108 (3.44%); Items Not Sold: 3031; Total Revenue: $16,831.94 + $0.00 shipping; Lost Revenue: $2,050,084.51 + $0.00 shipping

        http://www.goofbid.com/ebay_seller_history_tool.html?gsl_username=+automationrecovery1+&gsl_submit=&gsl_submit.x=14&gsl_submit.y=17

        4…. if they are having to have manufacturers “rework” existing components, then they are no longer “off the shelf” parts. Would you tend to think so as well? And I agree with you that there ARE a lot of parts that could be used with minimal tweaking, such as the seats, steering wheel, etc… But it seems to me that 80% is quite a stretch. And that it’s likely just another marketing ploy.

        5… I didn’t say that EVERYONE on facebook is gullible. lol
        But even you have to admit, there ARE a LOT of people on there who believe some crazy stuff!

        And how many people do you imagine sent money in based on those 5 different start up dates that Elio announced? If you read over some of the comments on Elio’s facebook site, it’s apparent that quite a few did. So yes… a lot of people believe what they read without doing some serious research.

        6… I think we’re in agreement there. Elio also stated that his profit will come from selling CAFE Credits when he pitched his idea in Pontiac Michigan. It’s in the Minutes from 2010. Yet he doesn’t qualify since the vehicle is technically a motorcycle.

        So Licter sounded confident when you spoke to him. What would you expect him to tell a reporter for The Truth About Cars? Surely you don’t expect him to tell you that things aren’t going well..

        And yes… he’s the one and only major financial backer of Elio Motors. But he’s still a businessman and at some point, if it doesn’t look like it’s ever going to get off the ground, one must eventually admit defeat and move on. It happens. People lose major investments all the time.

        Also… Look at Elio’s SEC filings. Look at how much is to be paid to Elio’s Board members.

        http://form-d.findthecompany.com/l/188960/Elio-Motors-Inc

  • avatar
    fred.smith

    Unfortunately, every claim Elio makes needs to be parsed carefully.

    The concept is good. But the numbers and the actions of the company don’t live up to the idea. For example, the company is claiming that they will give more bang for the buck than conventional vehicle manufacturers, by using existing technology. Why haven’t they been able to build a prototype that has all the pieces they claim, even if it doesn’t meet the performance and pricing claims?

    Just how much can it cost for labor to hand-build a parts-bin special? Let’s say 100X the MSRP. That would be $680K per prototype. Round up to $750K each, and $3M would build the four so far. That’s ignoring the fact that the P2 was a rebuild of the P1, and none of them are fully functional.

    This company, who claims to be so efficient and well-managed, has burned through $65M to build $3M worth of prototypes. They are still in debt for ~$20M for the equipment at the plant and couldn’t come up with the $7.5M to buy the plant. They should have been able to pay off the equipment and buy the plant and still have about $35M on hand.

    Once they built the $680K prototypes, they should have the molds available for the custom parts. At 10x MSRP, they should be able to build cookie-cutter prototypes by hand for $68K each. Rounding up to $75K each, they could have build 40 prototypes for another $3M.

    Instead of having over $30M on hand, with 40 prototypes undergoing testing, they are broke, in debt, and $230M from starting production. Is this really the company to invest in? The audited financial statements required by the Regulation A offering will probably open a few people’s eyes.

    • 0 avatar

      Elio says that the $25 million raised in the Reg A offering will be used to build the 25 testing and validation prototypes. It shouldn’t cost them $1 million per vehicle, certainly not if they’re building 25 at the same time. A company like Metalcrafters charges about a million dollars to build a high profile one-off concept car.

      I would assume that some of that $25 million will go towards the cost of testing and possibly tooling that could later be used for production. Otherwise, the number doesn’t quite add up for me.

  • avatar
    benders

    I’m guessing someone linked this article on an anti-Elio forum for all the haters to come here with their “facts.”

    • 0 avatar
      fred.smith

      You seem to misunderstand the use of quotation marks. “haters” should have the quotes, and they are not needed for facts.

      We need a corollary to Godkin’s law about the use of the term “haters”. It seems to be used whenever a person defending a weak on indefensible position is faced with uncomfortable truth.

      The uncomfortable truth is that Paul Elio had a great idea, and has mismanaged millions of dollars and has lost track of the original concept along the way. Without real prototypes and testing, there is no evidence that the performance claims are reasonable and that the vehicle is viable at anything approaching the marketing claim’s price point. The history of the company gives little reassurance as to the ability of the current management to actually produce the vehicle, as opposed to merely being good at collecting donations.

      When the crowdfunding from Regulation A moves from “testing the waters” to “offering”, there will be a legal requirement of disclosure and transparency far in excess of the claimed “transparency” that Elio has offered up until now. If you, or anyone else, doesn’t bother to research before investing, it won’t bother us “haters” at all. It won’t even bother us if you make lots of money on the investment/gamble, either.


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