Following Elio Motors: Why Less Makes More

As any a hard-eyed cynic might say, “You gets what ‘yer pay for”; and while this sentiment appears to be accurate more times than not, occasionally the inverse holds true, and particularly in the case of the new Elio three-wheeled reversie.

Now, at the outset, I have to say that I think when it comes to designing modern auto products, Paul Elio is a pretty smart guy – he figured out a way to finally resolve today’s ‘customer-value versus final-price’ riddle.

Figure it this way: he’s packed all of today’s auto amenities into a tadpole roller that takes up about half of the overall space of a traditional four-wheeler. On top of that, his car provides for all-weather climate protection for driver and passenger, leverages a driving process that harbors the past yet suggests the future, runs at highway speeds, and avoids all the environmental claptrap regarding ‘sustainability’, by only requiring a sip of fuel to get from here to there and back.

Then, in addition to all of that customer comfort, he’s also established an all-in sales price point that is four times less than an average home down payment, and at least one and a half times less than the average auto loan down payment.

Now, how he has managed to put all of this together remains to be seen from a manufacturing cost perspective. We’ve reached out to the company for comment, but received no response to our query yet. Nevertheless, some of the more obvious less costly elements occur in a simple technical ‘look-around.’ For example:

  • The Elio is driven by a IAV three-cylinder engine. The engine itself is therefore much less expensive to design and manufacturer.
  • The elimination of ‘one whole corner’ of the car’s suspension also reduces the car’s overall manufacturing cost.
  • The overall size of the package itself both inside and outside, reduces overall cost by minimizing raw and/or finished materials for the production of interior/exterior fascias, body panels, seats, the single side-door assemblies, reduced lighting, seats etc.

 

Granted, this is only what we’re able to discern by looking at drawings, static images and videos, but regardless the car still makes more sense than an entire shelf of Polly’s pies; and to be direct, that’s a whole lot of pies indeed.

So, even though many skeptics continue to assert that the Elio won’t sell as advertised once it finally starts its production run, I wouldn’t bet against the company. Because when it comes to this design, and this price, someone at the company clearly has his/her/their heads screwed on right; and more’s the better for the rest of us.

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9 COMMENTS

  1. Since your article is about 3 years late, you could just scour the internet and read the other 100s of articles on the same subject since you haven’t heard from Elio. Or you could have just asked them whatever you wanted on their FB page.

  2. If there are still any skeptics out there, they can, at this point, be characterized as clueless dolts. The reason no automakers ever came up with Paul Elio’s simple, yet
    obvious method of boosting mileage (and simulataneously lowering build costs) is that automakers are mesmerized by the concept of four wheels. They have built two seat coupes before (Fiero as one example) but never obtained significant mileage increases. And the more or less three wheeled Isettas had their passengers seated side by side. The Elio is full of smart thinking – using the window wash’s own plastic jug as its storage vessel in the vehicle was a superb concept. And hinging the hood from the front to avoid the expense of a hold-down latch was another. The car was designed practically opposite of the over-the-top Tesla Model S. This car will make a gigantic difference in every way – affordability for the lower economic classes, reduction of emissions far in excess of what the dozen times more expensive Model S can achieve. Do the math and you’ll find that the Elio, at highway speeds, reduces emissions 3 1/2 times greater than the Model S and over 40 times greater on a dollar spent basis. If your goal is to reduce emissions and oil consumption, the Model S makes zero sense compared to the Elio. Paul Elio is an engineer for the masses, the country’s economy and the environment. The Model S is a heavily subsidized trophy car for the rich. The idea of McDonalds’ workers taxes providing $7500 subsidies (and more)for the rich so they can buy a second car (without having to drop down to domestic wines) is nothing less than obscene, and criminal.

  3. I think you are missing the biggest cost factor, that it’s not a “car”. Being only three wheeled, its considered a motorcycle, Which helps because it doesn’t have to conform to all of the safety standards of a car. (although i have heard it will have some features such as airbags) But the fact remains that they didn’t have to spend nearly as much money upfront in testing and certifications a car would need to.

  4. This is vapoware. Elio has raised (burned though) 55 million so far and is now saying he needs something closer to 200 million before they produce the first car because they now have to custom design an engine for the exact weight and load of the car to achieve the needed mileage. I’m sorry but a $6,800 car doesn’t come with an R&D budget.

    They have also said they are committed to a 5 start crash safety rating, traction control, stability control, ABS, 3 airbags, stereo etc. all for less than half the cost of a decent motorcycle? Yeah right!

    Most motorcycles also only get about 40-50 MPG. Elio motors was started in 2008 and they have yet to hire a factory worker at the production plant. Who has gotten the 55 million or so they have spent so far? How close are they to designing a more efficient engine than the automotive and motorcycle industry has been able to do with hundreds of millions of dollars in R&D? Without a working testable prototype for their engine who is to say it won’t be worse?

    I’m sure even tooling costs to produce their own custom engines are pretty high. They throw around the 84 MPG number but what is the actual gas mileage of their prototype with the Geo (GM) motor they decided not to use for the project?

    Does the fact that they have 4 tiers of “refundable” and 4 tiers of non-refundable pre-orders seem strange to anyone but me? Assuming they /do/ produce cars next year and you reserved one for $1000 and got a $1500 credit, that means they borrowed money from you at a 50% interest rate! What company that isn’t either on the ropes or planning to file bankruptcy eventually would ever purposefully borrow money at 50% interest?

    Based on all their aggressive goals and their now expensive R&D needs there is no way they could possibly spot someone a $500 discount and still generate a profit. If their manufacturing was that efficient they could sell $2,000 motorcycles. How can they be so sure of their manufacturing efficiency when they have yet to hire factory workers or have dust off GM’s old factory yet?

    They plan to build something with most of the complexity of an automobile for half the cost of a motorcycle and still get 84MPG? The light weight materials and detail that would allow them to even get close to 84 MPG are expensive.

    I am pretty sure they will crash and burn. I only wish I knew a way to gain financially from it.

    • Thank you for your analysis. This has seemed to be too good to be true since I first read the hype. I truly hope that the vehicle is produced and is wildly successful, I would like to buy one. But I have this nagging feeling that everything that is promised cannot be delivered. Maybe its the delays and the silence from the company that makes me too nervous to get my hopes up.

    • Like any Kickstarter-type company, you risk either losing your entire investment or owning an amazing product. The financing raised by the pre-ordering is secondary. Over 34,000 people have bought in on one of the 8 pre-order tiers. That’s a powerful number to put in front of the VC investors…but that’s the backup plan.

      Elio has applied for a $250MM loan under the government’s high mileage/green energy program. If they receive it, they can have the funding without giving up equity to the VC folks. That’s a very smart business decision.

      I did my due diligence in a lot more detail than I can include here. For me, the reward outweighed the risk and I went all in with the $1K non-refundable option.

      If all goes as plan, the 7721st Elio off the line is mine. If it doesn’t….I have a 1K write-off. Either way, I’m having a lot of fun following the Elio venture, especially with skin in the game and a confirmed reservation #. BTW, only those commit $1K non-refundable get a number…and a lot of people came after me which shows the hard-core interest investors and government programs love.

      The only way I can think of profiting from Elio aside from the product value would be to sell it immediately. One thing even you can’t argue with is that Elio Motors is extremely effective at marketing and promotion.

      If this all comes together and Elio’s go into production, the hype will have $6800 base models selling on the secondary market for at least $2K higher, probably a lot more considering the cool factor. You have idiots buying iPhone 6 Pluses for $1500 on eBay just because they don’t want to wait an extra month for the backorders to clear..

      Factor in the $500 credit, and my $1K would bring a significant return.

      Not that I would sell it…I pre-ordered because I want one and it won’t be a base model once I get done with the options I want.

      More than a few people have pre-ordered multiple Elio’s at the lower tiers with that strategy in mind.

      If you’re “pretty sure they will crash and burn”, then don’t invest. Unless you have a competing vehicle ready to roll out, I don’t see how you could profit if they don’t succeed.

      I would be a little more restrained going forward, especially since your criticisms are based heavily on opinion and suppositions as opposed to facts and details. Your face could be pretty red this time next year…. and either way, you gain nothing anyway.

      By Q2 2015 we’ll have a much better indication of which of us made the right decision. By Q4, I’ll be taking delivery of my Elio.

      • Considering up till June they were saying production was to begin in September and they moved it to Match 2015 only because of funding delays I’m pretty sure we will have a better idea before Q2 2015.

        The company started 6 years ago and it’s just about time to lift the curtain. I still feel pretty good about my odds.

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