Louisiana Fines Elio $545,000 for Unlicensed Sales

The state government says Elio needs either a manufacturer's license or distributor's license to sell cars in Louisiana, neither of which they have.

Like many new car manufacturers, Elio has had many delays in bringing their unique three-wheeled car to production. KTLA reports that to add insult to injury, the Louisiana Motor Vehicle Commission has fined Elio more than half a million dollars for unlicensed sales. This includes a $272,500 fine for not having a manufacturer’s license for their Shreveport factory and a $272,500 fine for not having an automobile dealer’s license. Elio’s position is that they are not yet selling cars, but a place in line to buy a car once they are available. Indeed. Elio’s web site shows 65,341 reservations at the time of this writing. But the Louisiana Motor Vehicles Commission argues that this is a deposit, not a reservation, and that because this money goes toward the eventual purchase of a vehicle these laws do apply.

Interestingly, no mention has yet been made of Senate Bill 107, signed into law last month by Louisiana Governor John Bel Edwards, that removed wording that allows limited exemptions to a Louisiana’s ban on manufacturer-to-consumer sales. This could adversely affect not only Elio but other companies that eliminate the middleman of a dealer network, such as Tesla. The Louisiana Motor Vehicle Commission is made up primarily of traditional auto dealers and supported this bill.

Paul Elio shows off the P5 prototype to reporters in New York., Justin Hughes

Elio has suffered many setbacks in their quest to bring their efficient three-wheeled commuter car into existence. People who placed reservations early on have been waiting to receive their cars for years, with production originally scheduled to begin in 2014. According to KTLA, Elio was running a $24 million dollar deficit at the end of 2016, with only $120,000 cash-on-hand. Elio has also said they need $376 million to begin production by 2018.

The Louisiana Motor Vehicle Commission has given Elio 60 days to pay the fine, after which there will be an additional fine of $5,000 per day. Elio has stated that they intend to appeal the fines.