Elio Motors Sets Sights High With 3-Wheel Car

TROY, MI – Elio Motors is confident it has a business plan in place that will allow its new 3-wheeled vehicle to establish a new segment in the U.S. market.

The yet-to-be-named 3-wheeler, technically a motorcycle for regulatory purposes, is scheduled to begin production in June 2014, with sales commencing shortly thereafter.

It will be priced at $6,800, achieve fuel economy of 49/84 mpg (4.8-2.8 L/100 km) city/highway and boast a 5-star crash rating, says Paul Elio, founder and CEO of Elio Motors.

There are several obstacles before production can start, including development of a powertrain. Elio says the vehicle will be powered by a 3-cyl. engine mated to a 5-speed automated-manual transmission and be capable of speeds up to 100 mph (161 km/h).

However, both the engine and transmission currently remain in the design phase, overseen by supplier IAV, and no working prototypes have been produced.

A dealership network also has to be established. Elio says the company’s distribution plan will be announced in the next three months, declining to reveal whether it will involve a partnership with an existing dealer network or the establishment of an all-new distribution channel.

The executive says the auto maker plans to sell 250,000 units per year, a target he admits seems high but insists can be achieved through a unique purchase plan.

“I know that’s a nutty number, but the big (auto makers) ramp up to that volume all the time,” he tells WardsAuto at a media event here. “It’s not (like) we would be the first to do that.”

Elio Motors says it will issue credit cards with a $300 limit to potential buyers who agree to purchase all gasoline for the vehicles with the card. The auto maker will charge three times the price of the gasoline purchased, with the difference going toward paying the balance owed on the car.

“So (consumers) have a brand-new vehicle that’s under warranty and is fun to drive and have no car payment, and they’re going to spend less on gas then with a clunker,” he says. “We can literally give cars away to 95 million old-car drivers.”

The vehicle will be produced at the former General Motors plant in Shreveport, LA, which Elio Motors is in the process of acquiring. The company already owns the equipment in the plant, the CEO says.

“We put a down payment on the facility and are in the due diligence period,” Elio says, noting plans call for the plant to assemble the vehicle and produce its engine and transmission.

The company currently is taking pre-orders for the 3-wheeler, but declines to reveal how many have been received. He denies reports the auto maker will have to draw a certain number of pre-orders to start production, saying there is a capital plan in place.

Although the 800-lb. (363-kg) car will be considered a motorcycle under government guidelines, Elio says engineers are working to meet regulations for 4-wheel vehicles where possible.

The business plan is centered on selling within the U.S., but Elio envisions eventually exporting the vehicle to Europe, South American and the Asia-Pacific region.

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