Derwin
03-18-2010, 12:58 PM
REPORTED MARCH 17, 2010...
Startup auto firm eyeing Pontiac plant
By JOSEPH SZCZESNY
Of The Oakland Press
http://images.townnews.com/theoaklandpress.com/content/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.jpg (http://theoaklandpress.com/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.txt#photo1)
Click to enlarge (http://theoaklandpress.com/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.txt#photo1)
http://images.townnews.com/theoaklandpress.com/content/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.jpg
Paul Elio is the CEO of Elio Motors. He is eyeing General Motors’ old Pontiac truck plant as a location to build a fuel-efficient, three-wheeled vehicle called the Trikke. (The Oakland Press/JOSEPH SZCZESNY)
A startup automaker is eyeing General Motors’ old Pontiac truck plant for its base of manufacturing operations for a small three-wheeled car capable of getting 83 miles per gallon and costing less than $6,000.
If the project is successful over the next couple of years, it could bring has many as 2,100 new jobs to the plant GM closed in September and turned over to liquidators to find a buyer, said Paul Elio, founder of the fledgling Elio Motors.
The new venture will require government money, but Elio said he also is confident he can raise private capital as required by the Department of Energy’s program for promoting and launching new fuel-efficient vehicles. The goal is to start production 15 months after receiving funding, he said.
Elio also said this week his project would not only be good for Pontiac and the state of Michigan but also for American-based supplier companies and the U.S. economy by reducing the dependence on imported foreign oil.
“I started this project in August 2008 when oil was going through the roof at $125 per barrel and wealth was just pouring out of this country. I was just watching the television news every night and going crazy,” said Elio, while he showed off his answer to the nation’s fuel crisis at a studio in Rochester Hills.
Elio’s solution is a two-seat commuter car, dubbed the Trikke, that weighs only 800 pounds but is as long as a Porsche 911 or a BMW 330 and meets federal safety standards. Indeed, Takata Inc., one of the car industry’s top suppliers of safety equipment, has told Elio it could provide safety equipment for the car.
The three-wheeled layout, with two wheels out front and the third at rear of the vehicle, is inherently stable, so the Trikke will ride and handle as well as the competitors in the B-class or subcompact segment such as the Honda Fit or Toyota Yaris.
McLaren, a company noted for racing engines, has said it could supply a three-cylinder gasoline engine, and Elio also has a list of more than two dozen reputable suppliers who are interested in the project. McLaren calculates the Elio’s Trikke will get 83.8 mpg on the highway and 48.7 mpg in stop-and-go traffic.
The key to the Trikke’s fuel efficiency is its narrow width. The driver sits in a one-seat cockpit, while a passenger can sit behind the driver. The rear seat also can fold down to accommodate packages.
“You waste a lot of fuel pushing a car through the air. So we just cut in half lengthwise to reduce the friction and the energy consumption,” Elio said.
The three-wheel design, however, also means that Trikke, which looks a bit like the cockpit of a jet fighter on wheels, is technically classified by the federal government as a motorcycle even though it’s really not one. Nevertheless, it can travel in the High Occupancy Vehicle lanes even with a solitary occupant.
The HOV lanes found around cities such as Los Angeles, Washington, D.C., Phoenix and Seattle ordinarily are off limits to vehicles with fewer than two passengers when traffic is at its peak.
The engineering for the vehicle was originally done by ESG Engineering in Tempe, Ariz., but an unidentified contractor built a prototype and is developing another. “People want to have something to touch,” he said.
With the prototype in place and a new bill signed into law last October by President Barack Obama, interest in the project is starting to grow.
The change in the law allowed three-wheeled vehicles to qualify for the low-interest loans administered by the Department of Energy. The loans are designed specifically to promote high-efficiency vehicles and the Trikke qualifies because of its high mileage.
Elio Motors has filed a $260 million grant application with the DOE, which has given the project a favorable review.
Last fall, the DOE loaned more than $500 million to Tesla and another $528 million to Fisker under the same program. The Tesla and Fisker programs, however, encompassed more technical risks than the Trikke project because they involved electric and hybrid powertrains that continue to evolve, Elio said.
So far, Elio, a graduate of GMI in Flint, has financed the venture himself, but is now looking for other private investors. “That why we’ve decided to break cover,” he said.
The economic data that Elio has marshaled to support the business case behind the Trikke is most impressive.
The target price for the vehicle is $5,900, and the project is on target with 88 percent of the product cost now supported by quotes from interested suppliers, he said.
Elio added the relatively low price opens up new markets for Trikke, including people who now buy used vehicles because they can’t afford a new one. The market for used cars is enormous and at least some of the buyers would certainly opt for a new fuel-efficient vehicle.
He said the Trikke also is an option for a family with a van or sport utility vehicle that is looking for a fuel-efficient commuter car. The average Prius leaves the showroom with a $30,000-plus sticker and is usually delivered to someone with a household income of more than $100,000.
“There are a lot of people who don’t make more than $100,000 who still want to be green,” he said.
Given the demographics and rising fuel prices, he believes that he can sell 250,000 units annually after hitting full production. In addition, he wants the Pontiac plant to be used to build vehicles for export to European and Asia.
“People have asked me why I didn’t build this in China. I don’t want to build it in China. I think we have to build stuff in this country and use suppliers in this country if we ever want to reduce the trade deficit,” added Elio, who has devoted his attention full time to the project since his engineering firm was sidelined by the recession.
Startup auto firm eyeing Pontiac plant
By JOSEPH SZCZESNY
Of The Oakland Press
http://images.townnews.com/theoaklandpress.com/content/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.jpg (http://theoaklandpress.com/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.txt#photo1)
Click to enlarge (http://theoaklandpress.com/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.txt#photo1)
http://images.townnews.com/theoaklandpress.com/content/articles/2010/03/17/news/local_news/doc4ba18a76ee4c7932610030.jpg
Paul Elio is the CEO of Elio Motors. He is eyeing General Motors’ old Pontiac truck plant as a location to build a fuel-efficient, three-wheeled vehicle called the Trikke. (The Oakland Press/JOSEPH SZCZESNY)
A startup automaker is eyeing General Motors’ old Pontiac truck plant for its base of manufacturing operations for a small three-wheeled car capable of getting 83 miles per gallon and costing less than $6,000.
If the project is successful over the next couple of years, it could bring has many as 2,100 new jobs to the plant GM closed in September and turned over to liquidators to find a buyer, said Paul Elio, founder of the fledgling Elio Motors.
The new venture will require government money, but Elio said he also is confident he can raise private capital as required by the Department of Energy’s program for promoting and launching new fuel-efficient vehicles. The goal is to start production 15 months after receiving funding, he said.
Elio also said this week his project would not only be good for Pontiac and the state of Michigan but also for American-based supplier companies and the U.S. economy by reducing the dependence on imported foreign oil.
“I started this project in August 2008 when oil was going through the roof at $125 per barrel and wealth was just pouring out of this country. I was just watching the television news every night and going crazy,” said Elio, while he showed off his answer to the nation’s fuel crisis at a studio in Rochester Hills.
Elio’s solution is a two-seat commuter car, dubbed the Trikke, that weighs only 800 pounds but is as long as a Porsche 911 or a BMW 330 and meets federal safety standards. Indeed, Takata Inc., one of the car industry’s top suppliers of safety equipment, has told Elio it could provide safety equipment for the car.
The three-wheeled layout, with two wheels out front and the third at rear of the vehicle, is inherently stable, so the Trikke will ride and handle as well as the competitors in the B-class or subcompact segment such as the Honda Fit or Toyota Yaris.
McLaren, a company noted for racing engines, has said it could supply a three-cylinder gasoline engine, and Elio also has a list of more than two dozen reputable suppliers who are interested in the project. McLaren calculates the Elio’s Trikke will get 83.8 mpg on the highway and 48.7 mpg in stop-and-go traffic.
The key to the Trikke’s fuel efficiency is its narrow width. The driver sits in a one-seat cockpit, while a passenger can sit behind the driver. The rear seat also can fold down to accommodate packages.
“You waste a lot of fuel pushing a car through the air. So we just cut in half lengthwise to reduce the friction and the energy consumption,” Elio said.
The three-wheel design, however, also means that Trikke, which looks a bit like the cockpit of a jet fighter on wheels, is technically classified by the federal government as a motorcycle even though it’s really not one. Nevertheless, it can travel in the High Occupancy Vehicle lanes even with a solitary occupant.
The HOV lanes found around cities such as Los Angeles, Washington, D.C., Phoenix and Seattle ordinarily are off limits to vehicles with fewer than two passengers when traffic is at its peak.
The engineering for the vehicle was originally done by ESG Engineering in Tempe, Ariz., but an unidentified contractor built a prototype and is developing another. “People want to have something to touch,” he said.
With the prototype in place and a new bill signed into law last October by President Barack Obama, interest in the project is starting to grow.
The change in the law allowed three-wheeled vehicles to qualify for the low-interest loans administered by the Department of Energy. The loans are designed specifically to promote high-efficiency vehicles and the Trikke qualifies because of its high mileage.
Elio Motors has filed a $260 million grant application with the DOE, which has given the project a favorable review.
Last fall, the DOE loaned more than $500 million to Tesla and another $528 million to Fisker under the same program. The Tesla and Fisker programs, however, encompassed more technical risks than the Trikke project because they involved electric and hybrid powertrains that continue to evolve, Elio said.
So far, Elio, a graduate of GMI in Flint, has financed the venture himself, but is now looking for other private investors. “That why we’ve decided to break cover,” he said.
The economic data that Elio has marshaled to support the business case behind the Trikke is most impressive.
The target price for the vehicle is $5,900, and the project is on target with 88 percent of the product cost now supported by quotes from interested suppliers, he said.
Elio added the relatively low price opens up new markets for Trikke, including people who now buy used vehicles because they can’t afford a new one. The market for used cars is enormous and at least some of the buyers would certainly opt for a new fuel-efficient vehicle.
He said the Trikke also is an option for a family with a van or sport utility vehicle that is looking for a fuel-efficient commuter car. The average Prius leaves the showroom with a $30,000-plus sticker and is usually delivered to someone with a household income of more than $100,000.
“There are a lot of people who don’t make more than $100,000 who still want to be green,” he said.
Given the demographics and rising fuel prices, he believes that he can sell 250,000 units annually after hitting full production. In addition, he wants the Pontiac plant to be used to build vehicles for export to European and Asia.
“People have asked me why I didn’t build this in China. I don’t want to build it in China. I think we have to build stuff in this country and use suppliers in this country if we ever want to reduce the trade deficit,” added Elio, who has devoted his attention full time to the project since his engineering firm was sidelined by the recession.