Peter Palmer: All Roads Lead to 2016 for Elio Motors

Elio Motors is a unique auto manufacturer, offering an unusual product with a remarkable value proposition.
The Elio (the company and their car share the same name) carries a target price of $6,800 with an estimated fuel economy of 84 mpg highway.

To achieve these extraordinary numbers, the company is developing a modern, yet uncomplicated car. Elio wants to offer a fundamentally different alternative to today’s mobility options. Their car is an advanced exercise in integrating components and systems already available through the domestic OEM supplier network. This reduces development cost and time, as well as, de-risks the technology.

Elio’s car is not about making radical technological advances, rather re-imaging how inexpensive, fuel efficient, safe, fun, and practical personal mobility can be.

The Elio is an enclosed three-wheeler with a purpose built 900cc three-cylinder. The front-mounted gasoline engine delivers 55 horsepower to the front wheels. Its slippery appearance is the result of ambitious, anti-drag measures required to achieve its motorcycle-topping fuel efficiency. The diminutive 1,200 pound car will reach 60 mph in 9.6 seconds.

It’s not a track day car or all-weather alternative to the Polaris Slingshot. Think of the Elio as a modern day BMW Isetta.

The car features tandem seating – driver in front, passenger in rear and my 6’1” frame fits comfortably in the front. The ergonomics are intuitive and even familiar, having been cribbed from various vehicles already on the road. The GM instrumentation may change, but the center-of-vehicle driving position will remain and may require some acclimation. The rear seat is snug but head and shoulder room will be sufficient for passengers of my size on short trips.

Owners will not, however, be taking two people Christmas shopping, unless they limit their purchases to jewelry stores. Space is efficiently employed, but it’s difficult to overcome the car’s half-size width, so storage is limited to a modest compartment over the rear wheel.

Elio needs to deliver on more than price and fuel economy. Toward that end, every Elio is built with a reinforced roll-cage frame, anti-lock brakes, and over-sized crumple zones at the front and rear. Crash testing will be carried out later this year. The car needs to be a competent driver as well. Thus far, only engineering test mules with place-holder engines have been available to the motoring press. And although the response has been promising and expectations are high, ride and handling quality remain to be evaluated.

Elio prefers to consider its mobility solution peerless, but let’s take a quick look at two potential alternatives. The Ford Fiesta 1.0L EcoBoost achieves 45 mpg highway and starts at $14,925. The Fiesta enjoys an interior space advantage, as well as a more familiar sedan or hatchback layout. The Smart Fortwo is a two-seater starting at $15,400 and offering 39 mpg highway. The price and fuel economy deltas between these potential competitors and the Elio begin to make clear why the company does not see a direct competitor.

At least not yet.

The Elio is scheduled to begin production in late 2016, but consumers have been placing refundable and non-refundable reservations for a couple years. The only difference between these reservations, aside from the obvious, is that non-refundable reservations will be filled first. And the line is getting long: 47,000 reservations have been accepted at an average of $420 each. Perhaps more astounding than the reservation total is that over 90 percent of reservation holders have opted for the non-refundable option. Moreover, the company reports a steady stream of refundable reservation holders converting to nonrefundable, further climbing the reservation queue and increasing their dollar commitments.

As the charismatic Vice President of Sales, Jerome Vassallo, recently told me: “When we began this journey several years ago, we thought we knew our target audience. But we discovered along the way that our product has an appeal far broader than anticipated. We thus pivoted to a grass roots, open-ended marketing approach and have experienced incredible and sustained public support.”

One might expect the car’s staggering fuel economy, bargain price, and unique three-wheel layout to appeal to consumers with a personal ethos of environmental mindedness and budget consciousness. One may further estimate these people would skew young and toward those who welcome the car’s innate challenge to the status quo.

However, this describes just a fraction of Elio’s reservation holders.

The vast majority are not Millennials or even Gen X. They are 55-65 year old Baby Boomers who value the car’s 90 percent domestic content and want one as an efficient second vehicle.

Anne and Charlie Simpson are reservation holders from Seattle. They are Baby Boomers who can afford to put any vehicle in their garage. They recently traveled to the Los Angeles Auto Show just to get a look at Elio’s final engineering development unit (the red P5 pictured above).

Anne told me: “We love what Elio is doing by maximizing domestic content, keeping the product simple, and building the car here in the United States. Not only have we placed a reservation and invested in the company, but we have shared the Elio story with others who have placed reservations.”

This is this kind of grass roots support Elio says it is gaining nationwide and is in fact relying on – don’t expect to see Elio commercials during the Super Bowl but don’t be alarmed if you see one in your neighbor’s driveway.

Elio wants to sell hundreds of thousands of cars, if not millions. From there, their similarities with conventional automakers diverge. The company employs a small staff, works with integrated vendor teams, and is largely a crowdfunded endeavor. The $6,800 target price and 84 mpg highway target are eye catching and perhaps unbelievable. But the company stridently rejects that these targets are fantasy.

We will find out next year.

*Seth Parks is an auto industry veteran, entrepreneur, and Seattle Seahawks fan.
Follow him on Twitter: @mseth_parks