The Elio – High Hopes For This Unusual Underdog

What has the wheels of a car, but only three? … And it qualifies as a motorcycle, but has a door, a roof, and promises 84 mpg?

The answer? It’s simply called the Elio.

It’s part automobile, part motorcycle, and some might consider it a poor man’s Tesla, or – given it only sports a three-cylinder gas engine, and is not electric – more likely it’s the antithesis of something Tesla Motors would create.

Either way, if it has anything at all in common, it’s that it has a growing mountain of pre-orders, its FaceBook page is blowing up with “likes,” and, despite detractors, it basks in positive thoughts sent its way by gads of starry-eyed fans.

What’s so special about this vehicle said to be coming in 2015? It’s touted as a home-grown peoples’ car for the 21st century, that’s what. With a price targeted at $6,800, economy aiming for 49 mpg city, 84 mpg highway, and a predicted five-star safety rating, what’s not to like?

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More realistically, the trike or three-wheeled car – or whatever it is – holds out hope for the other end of the demographic scale for revolutionary personal mobility at less than one-tenth of Tesla’s upscale Model S.

I’ve been hearing a lot about this small gas-powered mobile and to learn more, met recently with the Elio team in Dallas, Texas at an Earth Day event, where I was able to check out the company’s two latest prototypes, the P3 and P4.

I interviewed individuals from among the throngs of smitten fans who were waiting 20 to 30 minutes just to sit in the prototype and put their hands on the steering wheel. People stood in formation from the time the show opened until nearly a half-hour after closing. It was the only booth at the event with that sort of magnetism.

February 29, 2008: The Day of Reckoning

On this day crude oil broke $100 a barrel for the first time in U.S. history, and you might say the light bulb came on for consumers as it did for everyone involved in the industry: More effective transportation solutions were needed, it was realized then, and as records were broken again that year including on the Fourth of July, when crude oil hit a staggering $145.29 a barrel.

Not long after, the earth began to crawl with more Smart cars, Mini Coopers and motorbikes – vehicles that would not have easily survived as much popularity a decade earlier when a vehicles’ value was only measured by its size.

One of the opportunists who was struck by this realization was Paul Elio.

A paragraph from his LinkedIn profile reads:

In 2008, many industry changes were quickly happening…. Upon realizing the vast potential of the Elio, Paul created Elio Motors and began the process of fighting the challenges associated with starting a new transportation company. Adhering to four tenets throughout the development process ensured a high quality product: a) ultra-low sticker price, b) ultra-high mileage, c) 5-star rating safety benefits and, d) low risk=existing technology=no R&D.

If "the future is electric" don't tell that to the Elioites.

If “the future is electric” don’t tell that to the Elioites.

Elio’s dream was full of promise and promises. Today, the Elio team keeps its eye on the target by adhering to these four tenets. Ultra-low sticker price? That would be the anticipated base retail price of $6,800. Ultra-high mileage? They’re confident they will indeed hit 49/84. Five-star safety rating? CAD models maintain the team’s confidence and actual crash tests are planned in 2014.

Swing and a Miss

First let’s look at Elio’s launch date integrity. Strike one came in 2010 when the start-up announced its intention to manufacture the Trikke, as it was known then, in a retired GM plant. Missing its announced 2014 launch date was strike two.

In my experience, hype machines tend to break down after three missed launch dates. Wishful buyers will expect at least one fizzled launch and may be a little disappointed by a second, but after three strikes, “yer out!”

You can keep going after that, but at some point it just becomes a running joke. The current official launch date has been pushed to 2015. More specifically, according to Jerome Vassallo, Elio MotorsVP of Sales, “we can expect to see a finalized production engine about October 2014 and a launch of sometime around May 2015.”

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Considering what I’ve seen and heard so far, they are still at least one or two prototypes from what I would call a test-drivable production unit.

A colleague, Jo Borras (who I sarcastically call “Elio’s biggest fan,” because actually he’s more than a little skeptical), informs me the provisional lease on Elio’s current manufacturing facility in Shreveport, La., expires in 2016. This means, if the start-up doesn’t have the money to move forward, the entire facility, along with the dreams of the Elioites, could literally be headed to the scrap heap.

How does the risk of a perpetually sliding launch date affect the true believers? Are they putting away their wallets and walking away? Apparently not. I spoke to one gentleman in queue at the Dallas show who said, “It doesn’t matter to me. They can come out in 2015, 2016, whatever. They can take their time, I’ll still want it when it comes out.”

I stepped away from the booth and ended up running into Actor and Director Ed Begley, Jr. I discovered that even he has an Elio reservation. He’s excited about the Elio because “it simply has the best gas mileage out there.”

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Pre-orders continue to pour in to the tune of about 135 a day. That makes over 17,000 people who have been swept up in the fairy dust and rainbows that stream from the Elio tailpipe.

These “Elioites” have dropped $100, $250, $500, even as much as $1,000 for their place on the delivery list. The higher the dollar, the higher up on the list you go. If they really want to test buyer risk tolerance, why not offer a “pay up front” option? Fans could hand over the full $6,800 and stand near the very front of the line. I believe at this point in the game many diehards wouldn’t bat an eyelash. They’d dive in head first. A program like that could give Elio Motors a much needed injection of capital.

The Art of Hitting a Curveball

Still taking on the topic of risks for Elio Motors, auto start-ups deal with a staggering number of variables. Try thinking about the reasons why you wouldn’t buy some new, unknown, upstart, young car brand. What would be your deal breaker? Its name, looks, safety, comfort, or reliability? Will it accommodate your daily cargo? Is it convenient? Is it expensive to fuel up today (because people tend to be short sighted)? Is there support? Whew! We’re just getting started and those are only a sample of the concerns on the consumer side.

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Elio has been working hard to ease concerns for would-be owners since the day it started. Just over a week ago Elio announced, on Fox & Friends, that Pep Boys would be the official service provider for Elio Motors when they launch next year. That’s an exciting announcement but what about dealerships? Since the Elio would be classified as a motorcycle in most states, vehicles could be ordered directly from Elio Motors and drop-shipped. That could allow the company to avoid the markup of third party dealerships just like Tesla has done – assuming it too doesn’t run afoul of auto dealer associations.

Another big unknown: Is the Elio really a car or a motorcycle? Naysayers tend to disparage the Elio based on what they know historically about three-wheeled vehicles. They’ve been a tough sell just because they’re an oddity. No one knows where they fit in. Ideally, their backers would love them to be considered a new segment, a vehicle that skirts the line between the two, adopting only the advantages of both. For instance, they would love them to be considered a motorcycle for benefits like use of HOV lanes but want to be considered a car when it comes to helmet laws. They want them to be considered a car when it comes to getting a driver’s license (no Class M test), but a motorcycle when it comes to getting cheap insurance (like $100/year cheap).

To make matters more complicated classifications could vary state to state. How does it fit in when nothing about the Elio fits our general concept of a car or a motorcycle?

What’s Next?

While at the event I had a chance for a brief one-on-one with Elio Motors’ VP of Government Affairs, Joel Sheltrown, and he gave some insight on where they are going with Elio.

HC: What is your number one obstacle right now? What would you like to get out of the way?

Sheltrown: “Well, we still have to raise a little more money but everything else is just falling into place.”

HC:Has this national tour had an impact on reservations?

Sheltrown: “It’s been very successful because most people want to see the vehicle before they put a reservation in… when people see their friends on Facebook posing next to the car saying things like it fits! I’m sold!, then they want to go online and make their own reservation.”

elio_34

Elio reservations are quickly approaching 20,000 and that is just for individual units reserved online, right? “Correct. We’ve also got rental companies interested in this, we’ve got government agencies that are interested in this as
well, so the potential is much higher.”

So, can you imagine the Elio as a fleet vehicle? Perhaps rental car companies would like it for the low cost and novelty. These are logical moves and Id like to see how this pans out.

Here’s My Take on The Elio

Any meaningful measurement of performance, comfort, handling, and driver impressions are going to have to wait for an updated prototype. We will have a better idea after they’ve built the P5 (tentatively scheduled for June 2014) and Elio’s three-cylinder, 900cc engine has been nestled under the hood. The plan is to build 25 units, some of which will be headed to the Insurance Institute for Highway Safety for crash testing. Lets hope that Paul Elio’s third tenet, the “5-Star crash test rating” holds up. If it does we’ll be taking a road trip to Shreveport for an actual preview so you can see how it moves and hear how it sounds. Until then, I’m going to give you my take on what I’ve seen so far.’

colors_elio

Those colors – They can stick with the jelly bean color palette if they’d like but I am not fond of color names like Marshmallow, Sour Apple, Licorice and Creamsicle. With the exception of “Candied Apple,” food descriptors should be
reserved for products that can fit in your hand. I, for one, am not driving around town in a Sour Apple Elio. If it were an Electric Green or Harlequin Green I’d be happy.

The fuel efficiency – I will be really impressed if they pull off a fuel efficiency rating of anywhere within 10 mpg of their target. If they come off the assembly line doing 74 mpg, I’ll be stoked. My gut is telling me it’ll be more like 65 mpg and
that’s still nothing to scoff at.

The 5-star safety rating - I actually think this will happen. Being 13.5-feet long it will be more susceptible to side impacts than an 8.8-foot Smart car but I think with the reinforced roll cage and multiple airbag system it will breeze through the impact tests, especially front and rear collisions.

Comfort – The front seat is spacious and comfortable. Passenger comfort in the P4, however, was like sitting at the kids picnic table. The team was well aware of the issue and P5 is spec’d to be more passenger friendly with a raised roof apex and slightly lowered, more comfortable seat.

The price - It’s too low. The number $6,800 sounds more like a dealer’s MSRP. A comparably powered scooter from Suzuki, with no heater, no AC, no power steering, power windows, power locks, stereo, airbags, seatbelt or windshield wiper is still $1000 more than the Elio. I’m just saying that you should price the Elio according to the value it offers. A scooter that is made in America and protects the rider like a car? It should be at least as much as much as a nice, used touring motorcycle. Just remember the road to $100 million is paved much more quickly $10k at a time and you’d still be $2,800 cheaper than the Nissan Versa 1.6 S sedan.

Image: Elio Motors

Image: Elio Motors
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If Paul Elio can stick with his first tenet, the “ultra-low sticker price,” and still make a profit then kudos to him. He could open up a whole new world of freedom for Americans in this downtrodden economy.

Today, his team just needs to figure out where they can make cuts to get the current price tag down from $7,100 to his goal of $6,800. That and the solution to a few hundred other variables and unknowns that need to be discovered before the clock ticks down to 2015.