When Paul Elio announced his plans to pursue crowd funding techniques to kick-start mass productions back in April 2015, most journalists imagined the use of websites such as GoFundMe and Kickstarter. However, this investment opportunity is more formal than initially expected.
Elio currently has the plans to manufacture their self-proclaimed “84 MPG” vehicle in a 4 million sq-ft facility at Shreveport, Louisiana previously owned by General Motors and all they need is approximately $230 million to start productions. Paul Elio has recently started offering early-stage investment opportunities to non-accredited investors, in a bid to collect funds!
The process is being governed by Start Engine, a rapid accelerator solely focused on helping Los Angeles-based startup companies build a stable foundation within the period of three months. This is a new form of investment policy introduced by the JOBS Act of 2012. The legislation allows individuals from the low-to mid income group to invest a maximum amount of $15,000 in startup companies. The companies, on the other hand, are allowed to accept funds up to $50 million from the non-accredited investors!
After the successful supplier summit that took place in Michigan recently, Digital Trends reported that Elio Motors has announced their plans to build the fifth-generation prototype of the car, dubbed the P5 while the company “wants to start productions by mid 2016.”
Elio Motors’ founder, Paul Elio, declared in January that the company has raised the 70 million dollars of its $240 million initial capital, possibly from the wealthier individuals from the ‘accredited category’. Ever since then, the company has been opened to partnerships along with investors with the hope of finally turning their dream car into reality.
Elio Motors has applied for a low-interest loan from the Advanced Technology Vehicle Manufacturing program, an initiative taken by the Department of Energy, which had previously funded cash-strapped entities such as Fisker, Tesla, Ford and Nissan. While Fisker went bankrupt and was unable to repay the $100 million loan amount, Tesla cleared the debts long before time. Nissan and Ford are currently repaying the loan amounts on time!
Post the Fisker trauma, the ATVM has been instructed to tighten their purse strings. Hence, unless Elio can come up with an ingenious strategy that guarantees return, they are unlikely to be cleared for a loan. The ATVM is more inclined towards sanctioning loans to automotive component manufacturing companies than the auto manufacturers.
When Paul Elio was asked by the journalists in New York if the company was in a position to proceed with mass production in case the ATVM loan was rejected, Elio stated clearly that the “company could not move forward without the loan.”