Willing to risk some cash to help bring a radical new automotive concept to market? Does Paul Elio have a deal for you.
The founder and CEO of start-up Elio Motors has announced that his newly public company is opening up its first stock offering to the general public in a bid to raise $25 million. That would allow it to take the next in a series of steps that could bring to market a 2-seat car capable of getting 84 miles per gallon and costing just $6,800.
Elio Motors revealed the latest prototype, dubbed the P5, at the Los Angeles Auto Show last month and said it hopes to stick with its plan to begin production at an old GM plant in Shreveport, Louisiana by late next year.
“We are building a product that can literally change the world,” CEO Elio said in a news release. “We are on a mission to get to production. The funds raised to date through this offering are a significant step toward getting to production.”
(Nearly 20 mil autonomous vehicles could be on the road by 2025. Click Here for the story.)
Elio has a long way to go before production can begin, however. During the L.A. Auto Show news conference, the founder acknowledged his eponymous company is still several $100 million short of meeting its fund-raising goal, though the stock offering launched on November 20th has helped.
It began only after Elio Motors won approval from the Securities and Exchange Commission under its Regulation A+. The company initially held what it calls a “testing the waters phase,” limiting stock purchases until December 2nd to those potential investors who previously had made non-binding expressions of interest, a total of more than 11,000 people. But those who followed up didn’t completely buy out the $25 million in shares being offered.
Elio has not said how much stock it still has left to sell to complete that first round of financing.
The company had previously raised $75 million, but even with other funds it is hoping to tap, it has a long way to go. It hopes to get some more cash from a special government program created to support the development of clean, high-mileage vehicles. That federal project was closed for several years after a couple of embarrassing flops, including the bankruptcy of Fisker Automotive. But it is now taking applications again.
The venture is risky, analysts have cautioned. And while Elio himself told TheDetroitBureau.com in Los Angeles that “I think we have legitimate options” to raise all the necessary financing, he acknowledged, “the (production) timeline is always in jeopardy” of being delayed. But he is still hoping to roll the first of the 2-seaters down the assembly line within a year.
(Click Here for more on Elio’s LA Auto Show news conference.)
The current fundraising round would allow the start-up to “move forward with the development of 25 engineering and test vehicles,” it said in a news release today. “The test vehicles will be used to conduct a variety of final engineering and validation tests that will allow the company to make final adjustments prior to production.”
From a legal standpoint, it is actually a motorcycle, albeit one on three wheels and with a wheelbase about as long as a Honda Accord. It features an enclosed cabin in which two passengers will set tandem style.
Elio stressed that even though the car would be subject to less stringent rules, the company plans to meet the tougher safety standards – with such technologies as airbags and electronic stability control – a more conventional passenger car would require.
It won’t be fast, needing nearly 10 seconds to hit 60, and with a top speed of only a bit over 100 mph. It is likely to be on the noisy side. But it is expected to deliver about 50% better mileage – at a targeted 84 mpg – than the latest-generation Toyota Prius, and with only a gasoline engine under its long, narrow hood.
(Click Here for a review of the fourth-generation, 2016 Toyota Prius.)