Elio Motors Inc’s application for a U.S. Department of Energy Advanced Technology Vehicle Manufacturing (ATVM) loan has passed the first of three phases of review, is now “substantially complete,” and in the “due diligence” phase.
The U.S.-based start-up is seeking $185 million in total to accelerate plans to begin production of its enclosed, three-wheeled gas-saving vehicle in Shreveport, Louisiana, in 2015.
Pitched as a new age people’s car, the Elio car-trike has roused grass root hopes with intent to produce an 84-mpg non-hybrid for the low-low price of $6,800. Officially it’s being classified as a motorcycle, and this lets it escape stringent engineering and federal crash testing expenses, but the company promises a five-star safety rating (somehow) anyway.
Where the feds come in is the DOE ATVM loan program supports the production of fuel-efficient, advanced technology vehicles and components in the United States. The program has invested billions of dollars in projects by major automakers such as Ford and Nissan as well as startups like Tesla Motors.
The Congress created the ATVM program with $25 billion in loan authority in 2007; the program was revamped recently and resumed activity in April 2014 with more than $16 billion in remaining loan authority.
“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.”
Elio Motors said it will create approximately 3,000 jobs, 1,500 in Shreveport alone, where the company will occupy approximately 1.5 million square feet of a 4.1 million-square-foot former General Motors manufacturing facility.
The company explained it is in the process of working with its manufacturing partner, Comau, to sell surplus GM manufacturing equipment that Elio acquired along with the plant. Those sales will help raise additional funds toward the production of the new vehicle.
Elio added it already has more than 35,000 reservations for the vehicle. The $100-1,000 tiered buyer reservations themselves are a fairly low barrier to entry, and have represented a source of fundraising themselves.
When Tesla took pre-orders for the Model S – a many times more expensive car – it garnered paid reservations estimated well over 12,000.
With close to triple the number of paid reservations for Elio’s funky torpedo on wheels, the company has shown significant potential, something Uncle Sam has no doubt noticed.