Elio Motors Launches Its Own Cryptocurrency
The company is still trying to fund production of its tiny three-wheeler.
Troubled automotive startup Elio Motors is turning to crytocurrency in order to fund production of its three-wheeled vehicle. The company is launching ElioCoin as an offering to investors with help from financial firm Jones Trading and online retailer Overstock.com, which will also become an Elio investor.
Companies already use cryptocurrencies—digital currencies like the popular Bitcoin—to raise money, and Elio intends ElioCoin to be a safer bet than other offerings. ElioCoin will be offered as a "Securitized Token Offering," meaning it will be subject to stricter regulations and offered only to financial institutions and accredited investors. Elio also hopes that bringing in Jones Trading to lead the offering will add more clout.
Investors will redeem ElioCoins for actual Elio vehicles, although the company isn't ready to discuss exactly how that will work just yet. Overstock.com is currently negotiating to become the lead investor in the ElioCoin sale, and the tokens will be traded on Overstock subsidiary tZero. Overstock also plans to buy $2.5 million of newly-issued Elio common stock. However, Elio won't discuss the amount it hopes to raise through the coin offering at this time.
Elio was launched by Paul Elio in 2009 and has been promoting a small and reasonably-priced three-wheeled vehicle ever since. Elio has said the vehicle will be fuel efficent, achieving an EPA-rated 84 mpg on the highway, and it was originally priced at $6,800, though the price was raised last year to $7,450. Elio secured a former General Motors plant in Shreveport, Louisiana, to build the vehicle, but the only examples built so far have been pre-production prototypes.
This isn't the first time Elio has resorted to unorthodox fundraising methods. In 2015, the company launched a fundraising campaign aimed at so-called non-accredited investors. This allowed the company to collect small amounts of money from a large group of investors, like a Kickstarter campaign on steroids. Elio raised over $20 million that way. But Elio has still struggled.
While it claims to have 65,000 reservations for its three-wheeler, Elio has repeatedly delayed the start of production due to lack of funds (production was originally expected to start in 2014). In August 2017, it announced the sale of $100 million in stock and another production delay. The company now says that it hopes to start production 76 weeks after the ElioCoin fundraising round, meaning vehicles won't start rolling off the assembly line until 2019 at the earliest.