I discovered Tesla Motors in 2012 through a Money magazine article asking, at the time, if this was the car maker equivalent of Apple. At the time, Apple was the sexy, bold and sleek tech company going where others only imagined (God I miss that Apple) and Tesla was an upstart company led by a brash Elon who promised to deliver an ultra sexy, electric super car and then revolutionize the car industry.
I invested, and over the years, with the ups and downs, Tesla has not only changed the electric vehicle landscape, it has shaken up energy value chains and delivered more than 200% returns to me specifically (and possibly half an order of magnitude more to earlier investors).
Today, I ran into a company that has the makings of another Tesla, if instead of a super car, or even a standard sedan, people opted to drive car-like three wheelers. Elio Motors is the brain child of Paul Elio, an automotive engineer who trained with General Motors and worked for automotive player Johnson Control before founding his own engineering firm and then segueing into Elio Motors. The Elio is a three wheel motor-cycle, car hybrid (they call it an autocycle) which seats just two people, makes up to 84 miles per gallon and costs about $7,000.
The plan is ambitious, and Paul Elio initially funded it himself through his consulting firm. When the economy went belly up and revenues disappeared, he hit a terribly rough patch, his wife left him and he had to take up fixing roofs to make money. Somewhere along the line, he met a real estate guy who invested $20 million, and then last year, the company borrowed about $23 million from a bank and raised $16 million through a JOBS Act IPO. It’s the kind of idea one can easily write off as doomed to fail, but so far, the Elio has garnered 57,000 reservations without even a prototype. The company is only now starting work on prototyping and is applying for a loan from the Federal Government to get it through that and initial tooling before it raises fresh capital to begin production at its plant in Shreveport, Lousiana (a former GM plant).
Am I entirely sold on the company? No. Fisk Motors nailed their EV concept, and still went out of business. Tata Nano, and a host of other little car concepts have come and died. Plus, he’s solving a personal driving problem at a time when autonomous driving, Uber/Apple/Tesla crew are potentially transforming that space, and gas prices are low and falling, giving people little incentive to take up his ‘autocycle’. Paul Elio is clearly a smart engineer but he seems to lack the killer business instincts of an Elon. If he did, his company’s financial path would be a lot more aggressive, and the design of the Elio would be made to appeal more to people who wish they were motorcyclers than to car folks (something less friendly cute beetle-ish, more tronlike). He needs a partner right off the bat. But, he’s gotten this far on little resources, and 57,000 people handed him money, which is nothing to sniff at. At the very least, he’s on to something. I’ll be keeping my eyes on this one because if he’s able to pull it off, he might not revolutionize personal transportation but he’ll definitely do a thing or two to the portfolio of an investor who buys in at the right time.
So back to the question. Is this another Tesla? Hell no.
It’s interesting though. Let’s watch and see.