80 MPG Elio To Bypass Dealers, Sell Direct-To-Consumers By 2015

A U.S-based automaker called Elio is planning to launch an ultra small and ultra inexpensive personal vehicle. The Elio is a three-wheeled, one passenger vehicle that gets a reported 80 MPG. The vehicle runs around town using a three cylinder 55-horsepower engine. The prototype began with a GEO Metro and Suzuki motor, however, the current engine creation is all original via Elio. Perhaps the most interesting part of the vehicle is the reported price of $6,800. However, the vehicle is still a concept car, which is scheduled for release in 2015.

The company founder, Paul Elio, speaking about the pricing model as well as Tesla Motors said, “We’re only about $500 over budget on the car right now. That’s interesting, because often price inflation sets in. I’m not convinced anymore that the forthcoming Model Three Tesla really will sell for $35,000.” Another commonality between Tesla Motors and Elio is their stores. Elio is reportedly going to sell their vehicles from their own factory stores, bypassing dealers along the way. One part of the Elio factory store issue is that the three-wheeled vehicles are technically licensed as a motorcycle, and will require helmets in some states.

The vehicle will need some help from the government to get off the ground. Elio is hoping to secure a $185 million dollar Advanced Technology Vehicle Manufacturing grant in order to help with funding. The company has already raised around $65 million dollars and has a reported 35,000 pre-orders already secured. They are essentially waiting on the government and the opportunity to sell off some of its old GM equipment from their Louisiana factory to raise a few million dollars. Initially, the opening of the Elio factory will create 800 jobs, with a total of around 1500 once the plant has scaled up its operation.

Should a three-wheeled car that cost less than $7,000 worry dealers? This company has said they will bypass the franchise model in favor of a direct-to-consumer design like Tesla Motors. Will this company, which has nowhere near the financial support that Tesla has, survive? Should they be on the radar for dealers or is their product too different to even think much about?