Elio Motors: A New Car with 84 MPG at $7,450?

2023 Update to the below content: I first published this article in 2014, and as of 2023 Elio Motors still hasn’t begun delivering vehicles to potential customers who made reservations (and has stopped taking new reservations). In 2021, it put out a press release claiming that it is focusing on going electric before producing a gas-powered Elio. At this point, it looks like funding for Elio has all but stopped. I would not be surprised if we never see an Elio released to the public.

I’m a bit of a car geek when it comes to automotive fuel efficiency gains. But, I’ve grown a bit cynical over the years. You see, every now and then a tiny car will come along that promises to revolutionize the way we get around and dramatically slice transportation costs and environmental impact. Then it fizzles out.

I remember when the Smart Car was released in the U.S. It had a clever name, distinct look, good fuel efficiency, and a low cost. It offered a lot of promise. But after the initial buzz faded, Smart turned out to be a dud. If you want to market and actually sell a car that requires consumers to sacrifice utility, you better offer both of the following:

  1. An extremely low price
  2. Outstanding fuel efficiency. Up until this year, fuel efficiency was the #1 automotive purchase consideration across all segments. For small cars, there isn’t a close second.

Unfortunately, Smart was not really successful with either. Its 34 city and 38 highway fuel efficiency is good, but not for its size. It is only 2-3 mpg’s higher than some much larger gas-only models. And its $14,020 price tag is now higher than the Nissan Versa (a much larger 5-seat car with an optional hatchback). Quite literally, you’re paying the same price for less than half the car when you buy a Smart. The result? Smart only sold about 10,000 cars in the United States, before completely cutting the gas-powered Smart ForTwo in 2017.

Herein lies the problem. Americans are viewed as wanting big and fast vehicles and fails like the Smart are used to reconfirm those beliefs. I know this isn’t a true blanket stereotype for everyone, but multi-billion dollar multinational automakers tend to see things in black and white and don’t like taking risks to explore new niches. So innovation is severely lacking.

Elio Motors

It took an ambitious and daring rebel billionaire (Elon Musk) to force some true efficiency innovation in the marketplace with electric vehicles via Tesla. And now, a much less wealthy rebel, Paul Elio, hopes to do the same in a gasoline-powered vehicle through Elio Motors.

When the 3-wheeled, tandem-seated Elio first started making the rounds in the media a while back, I didn’t really pay much attention because I’ve been heartbroken before. But the media attention has been hard to ignore lately. So I started looking in to it a bit more. And now, I think Elio has a legit shot at making it. Why?

  1. It will only cost $7,450 (up from $6,800 as originally projected), with some nice standard features (AC, AM/FM/Aux/Bluetooth, power locks/windows). This is less than half the cost of any other new vehicle on the market.
  2. Despite no high-priced batteries in its drivetrain, it is anticipated to be rated at 84 mpg highway and 49 mpg city. This is more than 2X the efficiency of any other gas-only vehicle on the market. It does this by being extremely lightweight through using half the materials of a normal car and “smartly” using tandem style 2-person seating to streamline aerodynamics (vs. the standard side-to-side). It also has a fuel-sipping 0.9 liter, 3-cylinder engine.

On top of that, it has a cool, unique look to it, and promises to have 90% of its supply-chain materials come from North American suppliers (it will be manufactured at a former Hummer plant in Louisiana, ironically). The Elio also claims to have addressed the safety concerns typically associated with small vehicles with an anticipated 5-star crash rating on all four sides and three airbags.

My enthusiasm is genuine and I am definitely not alone – the Elio already has 65,000 paid reservations.

Now, lets be clear – this car still has long odds to make it to market and even if it does, I don’t expect it to become a mainstream best-seller or sell the 250,000 units per year the company is hoping for. However, if it does make it to market, this car could easily fill the automotive needs for the following niches:

  1. Urban and even suburban commuter (76% of all American workers drive to work alone)
  2. Second family car
  3. Minimalist hipster
  4. Low and low-middle class old, inefficient high-mileage beater alternative

For these groups – what other vehicles on the market come close to providing the same value?

You could never take the family on a vacation with an Elio or even make a Costco run with the spouse, but if it can adequately fill those four niches better than other alternatives, I can see it succeeding.

The biggest challenge it will face is funding. As previously noted, there is no rebel billionaire here – Elio has had to bootstrap its funding the hard way. Elio has raised $60 million thus far, but is still quite a ways off from the $200 million it needs to roll out full production. Starting an automotive company is not cheap. And there will be plenty of regulatory hurdles to overcome. It’s a long shot, but hopefully a well-funded competitor catches on to the concept, if Elio does not take off.

Since I ride a bike to work and live right on a bus line, I personally won’t be purchasing an Elio unless my job situation changes. But I sure as hell would like to test drive one anyways.

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