SHREVEPORT, LA (KSLA) - Elio Motors feels they are a step closer to collecting millions of pledged dollars raised through an online crowdfunding campaign. As a result of the funding situation becoming more clear, the company has announced another production timeline delay.
CEO Paul Elio says his latest prediction has been pushed from mid-2016 to the end of 2016.
"All along, we have said, funding will determine the production date, now that funding is getting clear we have a much better feel on our production date," said Elio.
"It is another important milestone," said Elio.
If approved, the money will be used to build 25 prototypes for testing. They won't be built in Shreveport, but in Detroit where the suppliers are.
"Emotionally, it would be much cooler to build them in our facility in Shreveport, but practically, there is heavy supplier engagement, most of the suppliers are in Detroit. As their parts go on the vehicle, they can be there and when the vehicles are done, we give the vehicles to the suppliers to test," said Elio. "To move the people down to Shreveport and build them then move the cars back, then fly people down there, as the parts go on, logistically it just doesn't make sense."
ArkLaTex Elio Reservation Holder Mark Muenzmaier is not excited about the latest delay, "It's not just disappointing to myself, as someone who wants the vehicle," he said. "But it's disappointing to the folks that have been waiting on jobs in the ArkLaTex are going to keep being pushed back over and over again."
The only people employed at the plant right now are working on selling surplus equipment to pay off the company's debt. The company's SEC filing reveals the company has outstanding secured loans totaling $30.6 million dollars, of which $1.6 million is classified as short-term.
Elio Motor's surplus manufacturing equipment at the former General Motors plant has been pledged as collateral to secure the repayment of the loans.
"All along we have been making payments on those loans. If we can pay it off, through the sale of surplus equipment and not have a loan payment, that would be nice," Elio said. "If we have to continue to make payments on the loans, that is certainly doable inside our budget."
Elio Motors is being held to a deadline by RACER Trust to create the promised 1,500 jobs.
"I think it's most important that we create the jobs and not the month that we create the jobs," said Elio.
RACER Trust owned the plant after GM's bankruptcy, then sold the plant to Caddo Parish's Industrial Development Board. Elio is held to the deadline by financial penalties. The deadline was extended to mid-2016 earlier this year.
A RACER Trust spokesman says they will likely grant Elio Motors another extension to the 4th quarter of 2016.
"RACER Trust maintains full faith and confidence in Elio Motors and its plan to produce its three-wheel vehicles in the former GM Assembly and Stamping Plant in Caddo Parish," Behan Communications Vice President Bill Callen said in a statement. Behan Communication's is RACER Trust's communications consultant.
"CEO Paul Elio has kept RACER fully informed of his progress in securing capital, building a supply chain and other important business milestones. We recognize the challenges of launching a successful startup, particularly in the automotive sector, but we are satisfied with Mr. Elio's business plan and his progress to date," Callen said.
Elio is also waiting on his pending application for a $185 million Department of Energy loan.
"Their engagement seems to be going very well," he said about the loan application process.
The company has made it through the first of three steps, but all that means is the company has qualified for the loan. The second step involves the government looking at the project inside and out. The third step is essentially for those who make it past the second step, where they cross the t's and dot the i's.
Dawn Selak, a spokesman with the Department of Energy, wouldn't tell us how long any of the steps would take and wouldn't comment on Elio Motors' application.
The company still needs to raise $225 million to be able to start production in Shreveport. However, that amount does not include the $25 million potentially raised through equity crowd-funding.