July 29, 2014 4:04 pm

Three wheels good for US car start-up Elio

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Elio Car

It might seat only two people and resemble some of history’s most eccentric automotive experiments, but a three-wheel car capable of 86 miles to the gallon will be bought by thousands of Americans, according to a former auto parts executive.

Paul Elio says more than 25,000 people so far have paid a deposit to get one of the vehicles, which resemble the Messerschmitt Kabinenroller three-wheeler of the 1950s and 1960s. The first are due to be delivered to customers next year.

The vehicle – called the Elio and priced at just $6,800 – is intended to appeal in part to drivers who want a second vehicle alongside their large, fuel-inefficient one.

“People need those big vehicles for a reason,” Mr Elio says of the cars with which he hopes the Elio will share garage space. “They know they don’t need them all the time, but there’s no cost-effective solution. We make it make sense to own an Elio in addition to the rest of your fleet.”

However, Mr Elio – a former manager at Johnson Controls, an auto industry supplier – faces scepticism from many in the auto industry.

Michelle Krebs, an analyst at autotrader.com, says any auto industry start-up is likely to struggle to secure enough capital. “This is a business that just gobbles up money,” she says.

Jack Nerad, executive market analyst at KBB.com, a car information site, points out that the market has never taken to three-wheelers. “Americans don’t find them very practical or useful,” he says.

The Elio’s narrow profile ensures it consumes far less energy than traditional cars, which have to push away more air.

“I went down this path because I believe the value proposition will work,” Mr Elio says.

The vehicle will be manufactured at an old General Motors factory in Shreveport, Louisiana, ordered from a network of storefront showrooms, and shipped from a small number of distribution centres.

Its power is supplied by a traditional petrol engine developed by IAV, a German automotive engineering company.

With the concern over the environment, I think people have got very open-minded about what transportation looks like

- Paul Elio, Elio Motors

Elio Motors, which Mr Elio and a group of partners own privately, is raising new financing. Potential investors have been impressed, he says, at the number of people who have put down deposits – many at the $1,000 maximum.

Because the vehicle will be cheap and production costs are fixed, the factory can be tooled to produce 250,000 vehicles a year, initially aimed at the US market. “You have to go big or go home,” Mr Elio says.

The Elio counts for safety purposes as a motorcycle and so is exempt from many US car safety rules. But Mr Elio says he will seek to put it through as many of the standard crash safety tests as possible.

Although he acknowledges that such a radical departure from traditional vehicle shapes will encounter resistance, he insists that high fuel prices have changed minds.

“I think 15 years ago this project would have failed,” Mr Elio says. “With the concern over the environment, I think people have got very open-minded about what transportation looks like.”

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