Is the Elio on Its Last Legs?
If there’s anything close to a 21st century Tucker story, it has to be Elio Motors. In 2009 – the nadir of the auto crisis – the little startup grabbed headlines by unveiling its groundbreaking three-wheeled two-seater. Taking over an abandoned GM plant in Shreveport, Louisiana (the former home of the Hummer H2), the Elio would get an astonishing 84 miles per gallon, offer car-like handling and safety, and cost a mere $6,800. Within a year or two, the deal seemed to get sweeter. It could be serviced at any Pep Boys across the U.S., and would be powered by the first all-new American engine not built by the Big Three since the 1950s. Elio quickly landed over 50,000 reservations for the car, raising a cool $65 million; as soon as it reached its $230 million goal, it would start cranking them out, hopefully by 2014.
Then it hit roadblocks with the federal loan it had hoped for, and production got pushed back to 2015. Then Pep Boys became a play thing for corporate raiders, and the three-cylinder engine couldn’t quite reach that 84 mile per gallon target, so the company announced it would need to build at least 50 prototypes (it has only built five to date) before it could even think about production. Now, seven years in without so much as a single car delivered to a customer, Elio has some good news and some bad news.
Here’s the bad news first: Due to everything from tooling issues to dwindling funding, Elio has announced to its 50k-plus reservation holders – who have already sunk money into the company – that they’ll be waiting at least another year for their cars. Seven years is an awfully long time to wait on a car reservation, even Rolls-Royce is quicker than that. It may not be much longer until the natives begin to get a bit restless.
Now for the good news: The company has just partnered with Roush (of Roush Mustang fame), to build and release 100 Elios later this year for “one or more fleet customers.” At last, the speculation and years of wondering are over, and we’ll finally be able to see how capable this little car really is. Hopefully it isn’t already too late.
Part of what makes Tesla so fascinating is that it seemed to avoid all of the pitfalls that have seemed to claim every independent automaker from the past 60 years. Unfortunately for Elio, it seems like it has hit every single one of them. Of course Tesla has had issues with delays as well (don’t get us started on the Model X), but its also been producing cars consistently for eight years now. Elio’s been promising cars for nearly that long, and virtually no one’s been allowed to drive their few running prototypes yet.
In light of this latest bad news for investors, the company hopes that these 100 cars will prove that the company is making progress, despite the seeming loss of momentum. Still, there are sobering hints about the company’s uncertain future in its press release, saying:
Although the fleet vehicle build is a step in the right direction for the end consumer driving experience, the bulk of the consumer launch will have to be moved into 2017 at a date to be determined, as the company continues to seek additional funding.
Of course, the company’s legal “Forward-Looking Statement” at the end of the release may sum up the situation better than anything else: “Certain statements in this press release are “forward-looking statements.” These statements involve risks and uncertainties, and the Company undertakes no obligation to update any forward-looking information.”
While we hesitate to write a premature obituary for a company – especially such an interesting and compelling one – things just don’t look good for Elio. In an era when Detroit looked like it was on the verge of collapse and gas prices could fluctuate as much as a dollar per gallon every few months, a radical, fuel-sipping vehicle from an idealistic outsider seemed like a perfect vehicle for an ailing industry. Today, when gas prices are reaching 1990s levels, and Detroit is as powerful as ever, the Elio already feels like a relic, or a missed opportunity at the very least. We’ve attended several Elio press conferences and spoken to company founder Paul Elio, and it’s clear that there’s no snake oil behind the company. The man is a true believer in his product. We just wish he could’ve gotten it out to the American public sooner. He might not get many more chances.