Elio Motors is back in the news and, I have to say – in the contest for “bumpiest ride” in today’s harsh business landscape, they’ve surely had a harder go than Tesla – and that’s saying something. I mean, most companies don’t have to worry about the SEC trying to fire their CEO.
Anyway – back to Elio. You may remember this company for its sporadic appearances over the years – starting in 2009 when founder Paul Elio set out to develop a 3-wheel vehicle with extremely high MPG for around $8,000 – basically the antidote to killer gas prices and vehicle costs.
If 84 miles to the gallon for such cheap entry sounded too good to be true, you’re right – because since starting out, the company has been struggling to get past a pile of prototypes and hit a wall last year when basically ran out of cash.
One of the biggest challenges Elio had been facing was reportedly the in-house development of a new engine for its E-Series, which basically meant taking the 1-liter inline-three “G10” and upgrading it with more modern bells and whistles. But the problem is, it doesn’t appear that they were ever really able to make it work, which explains a press release from the company last week announcing that Elio has partnered with a Fortune 500 OEM who will provide a new power train.
The endeavor, according to Elio, will save the company $120 million in R&D costs, though auto blogger Jason Torchinsky of Jalopnik was quick to remind the world that Elio already wasted millions of dollars on its fool’s errand of internal engine redesign “for no good reason.”
Elio says it will be working with Roush, the engineering and design firm that’s made a name for itself in high performance auto parts, but hasn’t specifically disclosed the “Fortune 500 OEM” who will be lending its powertrain to the effort. Whoever that is, I’m certain not the kind of fly-by-night outfit that’s going to take an IOU, which leave me wondering where Elio is going to pull the cash to pay for these new engines after it was revealed the startup had less than $8,000 in its corporate coffers at the end of the 2017 before taking a $2.5 million lifeline from Overstock.com in April – which, let’s be honest, is probably what Tesla spends on air fresheners.
The release of the flagship model was originally intended for 2012, and the latest update from Elio was that production wouldn’t even start until next year. No word on whether this engine change will change that timeline once again.
