Elio’s Woes: 4 Other Automakers That Never Made It Past Opening Ante

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Elio Motors was supposed to completely revolutionize how the world commuted. This tiny, three-wheeled wonder promised 84 MPG at the low, low price of just $7,495. Trouble is, nobody ever saw the car, and based on its latest SEC filing, nobody is likely to.

Last week, Elio Motors filed Form 1-U with the Securities and Exchange Commission, because it issued common stock in the company. The filing gives investors and the SEC an idea of the financial health of a company that issues stock.

The most discouraging line in the entire document reads: “As of September 30, 2016, we had cash of $101,317 and a working capital deficit of $25,769,911, as compared to cash of $6,870,044 and a working capital deficit of $2,325,036 at December 31, 2015.”

Yikes. According to the document, Elio spent more than it’s entire cash on hand on credit card processing fees in 2016.

It’s disappointing for a lot of people who were anxiously anticipating the day when Elio revolutionized personal transportation. More than 65,000 real consumers have made some kind of financial commitment to Elio that they are in fact interested in buying one.

Elio has been taking reservations for its cars for years now. Of those 65,000 consumers, about 42,200 — according to Elio’s website — have put anywhere from $100 to $1,000 down in refundable deposits for the car. Another 22,800 put down non-refundable deposits anywhere from $100 to $1,000 that promised that they’d be at the front of the line when the cars are actually produced.

It’s hard to fault consumers for being interested, given the media attention showered on the company despite the fact that — to date — the money from reservations and investments was used “to design and build three engineering prototypes that will be used for testing.”

Three cars.

The “mainstream media,” whatever that is, simply cannot resist a story about a car that delivers that kind of mileage for that little money. They fall for it hook, line and sinker, every single time. Elio’s homepage has the logos of all the major media outlets that ran glowing stories on the car:

How did it get all that media attention? According to its SEC filing, it added an ” a $1.814 million increase in social media, television and print advertisements; (2) a $234 thousand increase in press release fees; (3) a $117 thousand increase in credit card processing fees; and (4) a $120 thousand increase in promotion related expenses.”

Elio isn’t the first transportation company to base its entire reputation on slideware, a few prototypes and a gullible media that knows nothing about cars or how they’re produced. Here’s a look at a few other companies that went bust before, or shortly after, the first customers got their hands on a car:


Tucker is the most mythic of the “what-if” automotive brands. In the immediate post-war era, Ford, GM and Chrysler were still churning out cars designed in 1941, as it tooled up for 1949’s release of all new designs. It presented an opportunity for small manufacturers to quickly put innovative designs together and beat the Big 3 at its own game. Studebaker had a fresh design ready, and rode post-war popularity for years because of it.

Preston Tucker had a different idea, designing a car that promised unheard-of safety technology and truly modern styling.Specifications promised a water-cooled, horizontally opposed six-cylinder, aluminum engine, disc brakes, four-wheel independent suspension, mechanical fuel injection, seat belts and a padded interior.

Popular legend suggests that the Big 3 auto manufacturers were so petrified of the Tucker 48’s innovations that they colluded with each other and the SEC to kill the company. You can see that whole story play out in the Francis Ford Coppola film Tucker.

The real story points toward not-so-astute business practices and some downright flim-flammery. For example, after raising raised $17,000,000 in a stock issue, Tucker still needed more money, so he sold dealerships and distributorships around the United States. Like Elio, Tucker had potential customers putting up cash before they ever saw a car. The Tucker Accessories Program put potential customers on a waiting list if they purchased accessories, like seat covers, radios, and custom-fit luggage, before a car was ever built.

In the end, Tucker only produced 50 complete cars and one more incomplete. Most of those cars are still extant and their owners are mostly known. The latest one to cross the auction block was #1044, and sold for $1,347,500 at the RM Auction in Scottsdale, Arizona in January of 2017.


Mahindra is a wildly successful Indian manufacturer, worth $17.8 billion. Worldwide, it sells more farm equipment than any other brand. It also has a successful medium duty truck business. In the 1990s, it manufactured a compact, inexpensive pickup truck that seemed perfectly suited for an American consumer who was turned off by the expense of compact trucks from Toyota and Nissan.

It sure seemed like a slam-dunk. The Mahindra Pik Up was a rugged, double-cab pickup with a minimum of frills, the availability of a manual transmission and a diesel engine that could deliver up to 30 MPG, something that a segment of the truck-buying public wanted as the Tacoma and Frontier got more and more luxurious and expensive.

The trouble was the reason why Tesla has spent almost as much money lobbying state legislatures as it has designing cars: Establishing a dealer network for an all-new brand is a massive undertaking. To get it done, it established a relationship with Global Vehicles (GV) USA, an Alpharetta, Georgia-based automotive distributor.

In 2010,  GV ordered $35 million worth of vehicles from Mahindra. GV and 350 dealers in 49 states had all invested almost $100 million to sell the Mahindra trucks here. But the $35 million order came when GV was in serious dispute with Mahindra. It asked an Atlanta federal court to intercede and block Mahindra from doing business with any other car dealer in the US, “claiming that the Mumbai-based automaker ‘in bad faith’ and engaged in protracted contract negotiations for services relating to regulatory emission tests.”

The two companies had entered the agreement in 2006, but by 2010, EPA certification was still dragging on. Mahindra wouldn’t receive its emissions compliance paperwork until 2011, and when it did, the diesel version of the truck was rated at 19/21 MPG. That’s miles away from the 30 MPG it claimed.

By 2012, five dealers in the United States sued Mahindra because it never delivered a truck.

To top it all off, all this was happening while the world was in the midst of a catastrophic recession. Not exactly the best time to go launching a new brand.


The May 1957 issue of Mechanix Illustrated — now defunct, but in that era, a powerhouse — featured the wildly futuristic Aurora on its cover, with the headline “Revolutionary New Safety Car”.

The Aurora’s designer and builder was Father Alfred A. Juliano, a Catholic priest from Branford, Connecticut, where the Aurora Motor Company was headquartered.

Like Preston Tucker, Father Juliano was motivated to save American drivers from death on the highways. Beyond the incredible 18-foot long, fiberglass body topped by a clear, plexiglass dome, the Aurora’s most remarkable features were located inside, and were included specifically to protect passengers.

Similar to the Tucker 48, it included now commonplace features like seatbelts for every position, an integrated roll cage and padded surfaces. It also had seats that would swivel if the vehicle sensed that a crash was imminent, assuming that rear-facing passengers were less likely to be injured than those facing forward, an idea that revolutionized infant safety seats.

The parallels to Tucker continue: Like the Tucker 48 prototype, the Aurora had significant mechanical issues during its press launch. There were also a lot of questions about finances, which Father Juliano suggested were planted by General Motors. The IRS investigated and learned that Juliano had misappropriated funds from parishioners, and was eventually forced to leave the Order of the Holy Ghost. Juliano eventually declared bankruptcy and forfeited the single $30,000 prototype.

Visionary Vehicles

Chery was founded by the Chinese Government and is the 10th largest auto manufacturer in China. It originally licensed a chassis based on the SEAT Toledo to build the Fengyun in 1997, and from there manages to sell almost 600,000 cars a year.

Like a lot of companies, Chery had its eye on the 16-million-per-year car market in the USA, and it well all out to establish itself here. In 2005, it formed a partnership with Malcolm Bricklin, who had originally established Subaru of America in 1968, and later Yugo cars from Yugoslavia. The joint venture was called Visionary Vehicles, and the plan was to import five different vehicles to the United States.

Bricklin established an office in Detroit, hired an entire staff, and through an agreement with Atlantic Pacific Capital, secured $200,000,000 from George Soros in an escrow account to help bring the cars to the United States.

Bricklin spent $26 million to establish the brand here, and build a dealer network. He then found out that Chery was using the Visionary Vehicles engineering staff to secretly work on a project with Chrysler. Simultaneously, it entered an agreement with Quantum LLC to essentially work around Bricklin and Visionary Vehicles.


Craig Fitzgerald

Craig Fitzgerald

Writer, editor, lousy guitar player, dad. Content Marketing and Publication Manager at BestRide.com.