To address the most obvious question, the answer’s no. This enclosed, three-wheel motorcycle from an unheard-of brand cannot make major waves in the new-car market. But the vehicle’s founder and designer, Paul Elio, isn’t building it for the average buyer.
“We would get our ass handed to us there,” he says about competing with established automakers. Among used cars, however, “I’d think we’d play very well.” As used-car inventories swell in response to record U.S. car sales and Americans keep their older vehicles running longer, Elio thinks he’ll be able to swoop into this segment and “literally give cars away.”
Call It an Autocycle
The 900-cc Elio (there is no formal model name) is a single-doored, front-engine, front-wheel-drive “autocycle” that can be driven without a motorcycle license in 41 states. It fits two people tandem-style and is said to weight just over 1200 pounds. The aluminum-block three-cylinder SOHC gasoline engine is Elio’s construction, too, with all 55 horsepower and 55 lb-ft of its might routed through a five-speed Aisin manual or automatic.
Its eight-gallon tank, at a projected 84 miles per gallon, would provide 672 miles of range. While not required, the Elio comes equipped with traction control, stability control, ABS, and three airbags. Elio is so confident about his vehicle’s safety that he plans to run it through the same battery of government crash tests for regular cars and publish the results. The price: $6800 to start, including a stereo, cruise control, and air conditioning. He claims 56,000 preorders.
Elio, 52, started his company in 2009 after working for automotive supplier Johnson Controls. Since then, he’s secured more than $22 million in private and public funding (Elio Motors stock is traded on a secondary market called OTCQX). He currently employs a couple dozen people in Michigan and lives in Phoenix. The company applied for $180 million from the Advanced Technology Vehicles Manufacturing program—the same Energy Department loans that financed Fisker and VPG, both of which failed—but Elio insists he’s running entirely under his own power. He mentions other defunct auto startups, like Aptera and Visionary Vehicles, as examples he doesn’t follow.
“I am not going to bet my business on government making the right decision on time,” he says.
The vehicle we inspected in Manhattan was a prototype, as borne out when our colleagues at Road & Track drove it first, a fender came loose and ran itself under the front tire. Needless to say, we didn’t get a crack behind the steering wheel (which is sourced from the Camaro). Examined while parked, we found the prototype—without side glass and a curb weight some 800 pounds more than the production version—had extremely poor fit and finish and a rattly idle akin to that of an unmuffled, air-cooled Beetle. Elio has enlisted Roush to fix all that by the time we drive a production-spec model, which is to be built by 1500 plant workers he wants to employ at the old General Motors plant in Shreveport, Louisiana.
A Free Car?
Elio wants to sell vehicles directly to consumers like Tesla, but as he’s selling a vehicle that’s technically a motorcycle, the National Automobile Dealers Association hasn’t fired any shots, at least not yet. His sales pitch, though, is several leaps beyond owning stores. Elio imagines a customer walking in, paying nothing up front, and leaving with a vehicle and a credit card. The customer will use the card at every fuel-up, and Elio will triple the amount to have this serve as a car payment. The owner will be required to make minimum payments in case the vehicle’s fuel efficiency doesn’t rack up enough charges. He wants owners of older, thirstier used cars—like this author’s 1998 Volvo—to get into a new vehicle and “let your gas savings make your payment.”
“It’s hitting people over the head with the value equation,” he says. First, however, he needs to find a bank willing to underwrite it.
Any Option, Any Time
The other new idea Elio thinks will be a hit is his ordering system, which envisions a just-in-time production schedule that would ship a custom-spec vehicle the next day (250 to 300 cars a day, ramping up to 1000, says sales VP Jerome Vassallo). Elio says all of his optional equipment will be installed, piece by piece, like distributors do now for accessories. This will include leather seats, infotainment, and later, advanced driver assists and other electronic hardware that would just need a USB port and a power outlet to work.
He envisions suppliers using Elio as a test bed for the newest technology and other startup entrepreneurs like himself to offer features at a fraction of the cost that traditional automakers charge. If a customer doesn’t like it, “we’ll take it off and send it back to the supplier.” When it comes to tech, Elio considers himself Wal-Mart, a “retailer” who won’t shoulder any of the costs of development or integrating the equipment into the car. He thought of this, he says, after years of buying cars with features he didn’t want (like vanity mirrors) but was forced to buy because of bundled option packages. “I don’t put on makeup. I don’t give a shit if I look in the mirror,” he says.
There are too many hurdles in the auto industry, namely all the used cars Elio wants to compete against that will be even cheaper in the coming years as today’s new cars become secondhand. When Elio makes his first deliveries in the next year or two, the fundamental choice between a tiny, three-wheeled two-seater with enough trunk space for a small carry-on bag and a more-practical used car like a Honda Civic won’t change. None of that is deterring Elio. “I’m all in,” he says. “If this doesn’t work, I’ll be saying ‘Do you want fries with that?’ ”
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