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Why Not License Out The Production Of The Elio?

Rob Croson

Rob Croson

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Elio Amazed said:
You'd think that if there were absolutely no issues with that engine, this agreement would have made EM a little money by now.
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It's my assumption that without EM needing any engines, that there is no financial incentive for Linamar to actually build them. Starting a new factory to build the engine will take a crapton of money. They will need EM's projected 125k-250k per year to recoup the investment in any decent time frame.
 
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RSchneider

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Talking about engines and since someone mentioned Rotax, why didn't Elio just use this 3 cylinder, 900cc 60hp unit? They fit in snow machines and jet skis, it certainly would fit into an Elio. They even make it in a turbo model with 154hp. From what I can tell, this family of engines have been out since 2012.
Am I missing something here? Rotax already makes an engine almost exactly like what Elio is using except for they made it a 4 valve as opposed to a 2 valve. I'd think that Rotax would have customized it specifically for Elio and there would have been no reason to spend all of that money on R&D building something that's already made and off the shelf.

https://www.rotax.com/en/products/rotax-powertrains/details/rotax-900-ace-marine.html
The 3 cylinder 1330cc 115hp engine and transmission combination that's installed in an existing reverse trike.
https://www.rotax.com/en/products/rotax-powertrains/details/rotax-1330-ace.html
https://www.rotax.com/en/products/rotax-powertrains/details/rotax-1330-ace.html
 
BaldGuy

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I think Linamar was suppose to come to the plant and show Elio workers how to do the engine build. Then after they was up to speed was suppose to take off.

Not sure this has much to do with them licensing the motor or making it to sell.
 
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RSchneider

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BaldGuy said:
I think Linamar was suppose to come to the plant and show Elio workers how to do the engine build. Then after they was up to speed was suppose to take off.

Not sure this has much to do with them licensing the motor or making it to sell.
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That's right. Elio is going to build the engine in Shreveport. I would guess that selling the engine can't happen until Elio Motors outfits the plant to produce them. As for licensing, that's a hard sell since other companies make their own 3 cylinder engine for industrial use. Unless the Elio has some special technology or super high efficiency numbers, I think it would be a challenge to find a taker. A 2 valve 3 cylinder sub 1000cc motor that makes 55hp is nothing to write home about.
 
Billll

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1 litre engines, complete with trannys are available from multiple suppliers in whatever quantities you want. The price will depend on the quantity ordered of course so power plants aren't really a problem. The problem is that PE is married to the idea of 82 mpg which demands a low output engine to deliver. That right there made the car much more difficult to produce as opposed to using say the Ford 1L Eco Boost motor.

As to production, as an entrepreneur, you need to get your product out there in front of the public as quickly as possible since VC people want to see something salable, not just more R&D. PE has built 5 or 6 prototypes and currently has something that Daimler Benz would be proud to produce, right up there with the Smart car. He should have gone to contract manufacturers 2 or 3 prototypes ago and started producing the "Elio Beta 1" model just to get some rubber on the road. It may well be built with Ford or GM motors, and may well not get 82 mpg, but the concept of a fully enclosed 3 wheeler would be radical enough to allow for projecting the high mileage model out a bit. The contract vehicles might also be sold at a loss due to the contract manufacture and possibly the added cost of a production motor but then again, the drive train costs may turn out to be less than ordering the brand new engine, and without the teething problems anything that new will have.

Building an assembly line is a complicated process. Been there, done that. It takes time and money and produces nothing in the year or two it takes to build it. This is where the contract part looks good and the contractors already have the basic tools, space, planning expertise, etc mostly ready to go. If your contract vehicles get a favorable reaction, VC money will show up to help get your own lines up and running producing sub assemblies at first and working into making the whole thing later.

Anyway, if I were PE's manufacturing manager, that's how I'd approach it.
 
Ty

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Billll said:
1 litre engines, complete with trannys are available from multiple suppliers in whatever quantities you want. The price will depend on the quantity ordered of course so power plants aren't really a problem. The problem is that PE is married to the idea of 82 mpg which demands a low output engine to deliver. That right there made the car much more difficult to produce as opposed to using say the Ford 1L Eco Boost motor.

As to production, as an entrepreneur, you need to get your product out there in front of the public as quickly as possible since VC people want to see something salable, not just more R&D. PE has built 5 or 6 prototypes and currently has something that Daimler Benz would be proud to produce, right up there with the Smart car. He should have gone to contract manufacturers 2 or 3 prototypes ago and started producing the "Elio Beta 1" model just to get some rubber on the road. It may well be built with Ford or GM motors, and may well not get 82 mpg, but the concept of a fully enclosed 3 wheeler would be radical enough to allow for projecting the high mileage model out a bit. The contract vehicles might also be sold at a loss due to the contract manufacture and possibly the added cost of a production motor but then again, the drive train costs may turn out to be less than ordering the brand new engine, and without the teething problems anything that new will have.

Building an assembly line is a complicated process. Been there, done that. It takes time and money and produces nothing in the year or two it takes to build it. This is where the contract part looks good and the contractors already have the basic tools, space, planning expertise, etc mostly ready to go. If your contract vehicles get a favorable reaction, VC money will show up to help get your own lines up and running producing sub assemblies at first and working into making the whole thing later.

Anyway, if I were PE's manufacturing manager, that's how I'd approach it.
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I'm pretty sure Paul has been setting up for the long game. Sure, he could have made a couple here and there and sold them. Sure, he could use some other powertrain. But, you'd end up with a couple of niche vehicles that may or may not be representative of what they can produce at the Shreveport Plant. No, the plan has always been to not build intermediate vehicles for sale and hope that they'd eventually sell enough to make payroll and yet even more to move into the factory. At the profit levels Elio is working with, he'd have to sell an awful lot of cars just to get the main plant running. And that's without having any of the sales centers or service centers set up. You'd end up with people upset they can't service their vehicles and the bad press from that would kill them off the rest of the way.

This is definitely the blue period of the Elio story. Hopefully, this part won't drag on too long and Paul will have good news soon.
 
Billll

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Ty said:
I'm pretty sure Paul has been setting up for the long game. Sure, he could have made a couple here and there and sold them. Sure, he could use some other powertrain. But, you'd end up with a couple of niche vehicles that may or may not be representative of what they can produce at the Shreveport Plant. No, the plan has always been to not build intermediate vehicles for sale and hope that they'd eventually sell enough to make payroll and yet even more to move into the factory. At the profit levels Elio is working with, he'd have to sell an awful lot of cars just to get the main plant running. And that's without having any of the sales centers or service centers set up. You'd end up with people upset they can't service their vehicles and the bad press from that would kill them off the rest of the way.

This is definitely the blue period of the Elio story. Hopefully, this part won't drag on too long and Paul will have good news soon.
Click to expand...

Demonstrating once again that the perfect is the enemy of the good enough.
 
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