Elio's $6,800 Car Edges Closer to Production
At the time, Elio Motors was kind of theoretical. The prototype I drove in New York looked like an Elio, but instead of the intended custom-made 50-horsepower three-cylinder engine, it had the drivetrain from a 1990 Geo Metro. Much of the interior was borrowed from that car, too. The result was hardly a sophisticated driving experience—rough and unrefined would about cover it. Also up in the air was Elio’s production facility, a former General Motors plant in Shreveport, Louisiana.
But that was then. Elio now says that the plant space has been secured (bought by the Caddo Parish Industrial Development Board) and that Elio will rent 1.5 million square feet of the 4.1-million-square-foot complex. Paul Elio, the CEO and founder, also says he’s raised “over $7 million”—not a huge amount for a car launch—and will hire 1,500 people, with the first cars built late this year. Full production is to begin in the first quarter of 2015.
Reached by phone, Paul Elio was upbeat about the car. He says the prototype is still sporting that Geo Metro engine, but now has most of its production interior and instrument cluster, working HVAC, power windows and steering wheel. The actual engine is close to ready, and is now undergoing dyno testing--Elio says they're seeing 81 mpg. He's going to show the still-uncompleted car off at the Sundance Film Festival, which starts January 16. Another 25 cars will soon be built for validation purposes, he said.
Elio Motors claims to have 6,342 reservations for the car, which seats two in a tandem arrangement. The company has an unusual reservation process, with $1,000 getting you into the elite “I’m All In” category, with various perks and delivery preferences. There are $500 and $250 deals, and for just $100 you’re told the car will arrive “within the first year of production.”
The Elio looks like a car, but because of its three wheels will likely be registered as a motorcycle in many states, some of which would require a special license—and the wearing of a helmet. The restrictions are already being waived for the Elio in some markets, the company said, and it's working on "triage" to allow the car's usage everywhere without a helmet or motorcycle license.
I won’t be surprised if the Elio, should it make it into production, sells briskly—at least at first. Take a look at two other cars entering the U.S. market, the Yugo and the first Hyundai Excel. The Yugo hit the market for $3,990, the cheapest car available in 1985. There was considerable excitement. According to a Yugo history, “As soon as it was announced that the Yugo would go on sale, people stormed the 90 Yugo dealerships, and put down deposits on the cars. They did this before even seeing the cars, much less driving them. By the time 1,500 cars had arrived dealers had orders for five times that amount.” But by 1989, Yugo America was bankrupt—word of mouth wasn’t great, as you’d imagine.
In 1986, with the Yugo ringing the cash registers, Hyundai introduced the Excel here—and promptly sold 100,000 in seven months. In 1987, sales totaled more than 230,000. Again, it was a pretty crummy car, but it sold for $4,999, and Americans love a bargain.
The problem with a strategy based solely on pricing is that the good times only last for a year or two. Hyundai, stung by criticism of those Excels, immediately launched a quality drive that’s still a cornerstone of the company. To his credit, Paul Elio recognizes that his fame could be fleeting. Right now the website is getting more hits than Ferrari.com, but that could change in an instant "Price will get people in the door, but lack of quality would kill us," he said. "We have to make sure the car is rock-solid." By the way, Yugo didn’t do much to fix its cars (except launch a convertible, as I recall) so it’s the punchline of a joke now.
But this is Car Talk, and we deal in jokes. Tom Magliozzi once famously commented that the defroster on the back of the Yugo had a second purpose -- namely, to keep your hands warm during the inevitable pushing that would ensue before long. Here are a couple more: "A friend went to a dealer the other day and said, 'I'd like a gas cap for my Yugo.' The dealer replied, 'Sounds like a fair trade.'" Or how about: "What is found on the last two pages of every Yugo owner's manual? A bus schedule."
In the end, though, wouldn't it be great if the Elio turned out to be a class act? I’m with Automotive News’ Nick Bunkley, who wrote, “I hope Elio becomes a thriving half-a-car maker, creates thousands of good jobs and has millions of happy customers who then write condescending told-you-so letters to cynical journalists.” Here's the video: