Elio Motors announces delay, production expected to start in 2016
SHREVEPORT, LA (KSLA) - Elio Motors CEO Paul Elio says there's been yet another delay in the start of production on the 3-wheeled vehicle. Now, the company says production is expected to begin sometime in the first half of 2016.
Elio says it has all come down to funding and they are about $240 million short. Elio says they won't have an exact timeline until they get all of the funding they need.
The announcement is disappointing for Eddie Chavez, but he says he's still in support of the start up company.
"There's still hope, again like I said I brought someone down here, there's still hope," said Chavez.
During the meeting, Chavez was able to talk face-to-face with Elio Motors CEO Paul Elio about the progress being made and he was reassured that the company will bring many jobs to Shreveport. Chavez is retired from General Motors but excited about the job opportunities that production at Elio Motors will offer.
"There's a bunch of us that want to continue working because we are still young and what not,"said Chavez.
"We've taken a different tact, we were trying to raise the funds ourselves, but about 90 days ago we got professional help. Corporate fuel securities out of New York is now martialing the fundraising activities for us.
They started going out to the market at the first of the year, they are getting a good response. We are optimistic about that" says Elio.
"The other thing that has happened for us is that we've bought all of the assets out of the GM bankruptcy, the day we bought it, quite honestly, I overpaid a little."
Though Elio explained, after prices naturally appreciated, the equipment is now worth a lot more than they paid. After partnering with Comau, who participates in the manufacturing of 1 out of 3 vehicles in the world, the company now has $17 million worth of equipment for sale at their Ebay store, Elio said. What is currently listed represents less than 15% of the surplus assets that the company intends to sell.
"So now it's a race, the faster of the two, sell enough equipment or get an investor in place, that sets up the rest of the timeline," Elio explained they will refine the production date, once they either get an investor or sell enough of their equipment to meet their funding goal.
The company is also in the running to obtain a $185 millon "DOE ATVM" Loan from the government. Elio explained the first hurtle is complete, everything they have heard back has been positive so far. However, they are not the only applicant and are still waiting to see if they will be granted the loan or not.
"They don't tell you much, they just keep asking you questions. But the indications and the things you can read into is going very well, but I don't have anything quotable from them that I can share," said Elio.
As for those with doubts about whether the Elio vehicle will ever start production, Elio assures the skeptical the autocycle isn't just a concept car.
"You don't get 34 of the best global suppliers in the world to participate in a project that is not going somewhere. These big suppliers don't like small companies, so the fact they have skin in the game, and our working with us, that means something, both on the business side and the engineering side, like starting the engine we continue to show real progress," said Elio.
Elio also took time to explain one of the latest developments, saying they have finished building the engine that will run the vehicles.
The company was under a deadline to fill 1,500 jobs by the end of the year or face financial penalties. But the entity they made the agreement with, Racer's Trust, has granted Elio Motors a 6 month extension.
Elio says when they have a concrete production start date, they will start the hiring process about 60 days beforehand.
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