BATON ROUGE, LA (KSLA) - The car company with hopes of building 3-wheeled cars in Shreveport may be in trouble with the Louisiana Motor Vehicle Commission.
The commission summoned Elio Motors leaders to Metairie Monday for a "pre-hearing" conference behind closed doors to answer to possible state law violations, but nobody from the company showed up.
More than 10 companies were scheduled for pre-hearings at the Louisiana Motor Vehicle Commission (LMVC) to discuss possible state law violations.
Elio Motors was first on the list with a pre-hearing scheduled for 1 p.m. But when the company's name was called, nobody answered.
They were given notice to appear to discuss concerns the LMVC has with the company in what they call a "pre-hearing" which is a private information gathering conference, where commissioners can make recommendations.
At issue are the "reservations" customers have been allowed to pay money to hold their place in line for the first vehicles to roll off the line when production begins. Those reservations, which Elio has been accepting for years, are "non-binding." That means the reservations didn't necessarily mean a car was promised.
But in August of 2016, Paul Elio sent out a press release in an email letting reservationists know that the option for a "binding" reservation was now possible in an attempt to meet the qualifications for the Advanced Technology Vehicles Manufacturing (ATVM) loan program from the U.S. Department of Energy (DOE).
Elio stated in the email, "As part of the final steps of the evaluation of our application for the ATVM loan, the U.S. DOE requires that Elio Motors demonstrate market acceptance for our project in order to provide a level of certainty about our long-term viability."
As part of that, he went on to explain in the August 2016 email, non-binding reservations were not sufficient enough to demonstrate market acceptance, according to ATVM's new guidelines published June 2016. Elio said in order to strengthen the qualifications for the ATVM loan, "We must ask for binding commitments to purchase from our "non-refundable" reservation holders to further validate our market acceptance," as part of obtaining the binding commitments, the company decided to lock in the price of the Elio car at $7,300 until they reached 65,000 total reservations.
However, the Louisiana Motor Vehicle Commission is concerned that a "binding" reservation is the same thing as a "pre-sale," and Elio Motors is not licensed to sell vehicles in the state.
On top of that, according to the state's franchise law, manufacturers aren't able to sell directly to customers. Instead, they are required to sell through dealers.
If the company is found in violation of state law, it could face fines up to thousands of dollars.
Commission staff members said Monday that they gave plenty of notice to the company, but never heard back at all.
An Elio Motors spokesman told KSLA News 12 that no one from Elio was made aware of the meeting. "We spoke with every person at Elio Motors that should have / could have been contacted including Governmental Affairs, Senior Leadership and our Customer Experience and Sales teams and no one heard from the LMVC," said Elio Motors publicist, Mike DeVilling. "If we'd have been contacted, we'd have at least responded."
The commission staff says typically when a company is absent for their pre-hearing, the company forfeits the conference and instead have to show up to a fully public commission hearing. The LMVC will meet again in early March.
Elio's failure to appear comes less than a week after the company quietly confirmed yet another production delay of their 3-wheeled vehicle on their Facebook page, telling fans the time frame is now 2018.