Since I put down a deposit, I get frequent email updates on how things are progressing with the Elio .
This following bit is pretty interesting, especially from an engineer's so I thought I'd share:
How Can You Make an Elio so Affordable?When Paul Elio visits tour events, one of two things inevitably happens. One, people passionately thank him for working so hard to bring American manufacturing back to the US. Two, they ask about the price — "how can you sell a brand new vehicle that gets 84 MPG for $6,800 in America?"The answer should be "Why not?"…but the answer requires a little more explanation.The truth is, there is not one specific answer because Elio Motors' engineers and suppliers save costs in multiple ways that create a huge savings in the overall project."In reality, with every decision we make, Elio Motors is laser focused on cost savings," Elio said. "Our engineers and suppliers form one of the best teams in the industry. We constantly evaluate every aspect of the vehicle and the company to see where we can profitably mass-produce a low-cost vehicle. It includes engineering decisions, supplier relationships, options packaging, and the retail network and service arrangement. Focus on detail in each of these areas keeps total costs down." Here are a few examples of how we get it done. Note we mentioned "a few examples" as this is far from an all-encompassing list.Lighter Weight = Lower CostSome things are pretty obvious. The vehicle weighs just 1,228 lbs., while most entry-level vehicles weigh approximately 2,400 lbs. "Half as much material costs less," Elio said. "Three wheels cost less than four, two seats cost less than five and one door is less than two or four."Clever Engineering: A Few ExamplesOther cost savings are far less obvious, but no less important. Many cost savings come from clever engineering solutions that are often taken for granted. Take the hood latch, for example.
Hood LatchA traditional hood opens forward, requiring two latches. If the first latch fails, the second latch keeps the hood from popping up and blocking the driver's sight line. But, the second latch requires an interior release handle, a cable and a bracket to install. This simple system alone adds more than $20.00 to the overall vehicle cost and adversely affects gas mileage because of added weight.On an Elio, the hood is engineered to open the other way. If the latch fails, the wind will blow the hood down rather than up, so a redundant latch is not required. The Elio latch costs just $3.00.Windshield Wiper BottleA traditional vehicle has a thick plastic windshield wiper bottle, designed to last for at least 10 years and work well at -40 F to 140 F. In addition, when you buy windshield wiper fluid, you have to pour it in (usually spilling some on your shoes), and then a little bit remains that you don't want to throw away and you don't want to store. The actual cost of the well-designed windshield wiper bottle in today's vehicle costs about $8.00. The Elio system is another simple but highly effective example; there is a depression in the engine compartment to put a 1-gallon jug of wiper fluid securely in place. The cap has the hose from the wiper fluid pump in the middle so all that is needed is to open the jug and screw on the cap. The cost of the bottle is free — it is included when you buy windshield wiper fluid.The Innovative Engine DesignBecause the engine is gas powered, Elio is often asked why they simply don't purchase an off-the-shelf 3-cylinder engine to expedite production. Elio said that "most engines are designed with many different vehicle platforms in mind which results in an engine that is good for all, but best for none." The Elio engine is designed to be highly fuel-efficient, yet meet strict performance expectations for both city and highway driving. Plus, it is designed by one of the world's premier and most respected engine design and engineering firms, IAV (Click for our supplier page)Supplier Summits – Bringing together the Best Engineers in the IndustryElio's own history as an engineer spurred him to create a better system for fostering supplier relationships."As a budding engineer, I was able to show an OEM that they could save 1/2 lb. and $1.00 if they moved a bolt hole in the floor pan one inch." Says Paul Elio. "They said, NO." Reason being, the traditional design process compartmentalizes each component with rigid boundaries. Cost, mass and performance is optimized at the component level rather than the system level. "Elio Motors realizes that our customers don't care how much we pay for a seat or the frame; they care about safety and how much does the vehicle cost." Through our Supplier Summits, Elio Motors optimizes on the system level rather than the component level. Sometimes the right answer is to pay $1.00 more for the seat because $3.00 can be saved on the frame if done this way.Business Model - Elio Motors Business Operations Simplify Retailing, Service and Reduce Overall CostsMuch like the vehicle design itself, Elio Motors has many innovative business operation strategies that help control overall costs. This includes how the company allows customers to pick options, as well as how vehicles are sold and serviced.
- Option Strategy Reduces Over Contenting – Most vehicles for sale today package options in bundles. This helps control inventory but it ultimately means that consumers are forced to pay for options they don't want or need. Elio Motors is going about this differently by offering two basic models: a standard transmission and an automatic transmission. Every vehicle comes with AC/heat, AM/FM stereo radio, power windows and a power door lock. Customers can add other individual options such as a power leather seat, blind spot detecting mirrors, back-up camera and more. This ensures customers pay only for the options they want.
- Proven Service Network – Elio Motors will be supported by a proven service network — Pep Boys (press release). Our simplified system allows Elio Motors to pass along substantial savings to the customer by reducing the costs to operate a service network. In doing so, the focus will remain on building quality, low-cost vehicles and in turn relying on Pep Boys as the Official Service Center to deliver a high quality customer experience.
- Company Owned Retail Outlets – Elio Motors' company-owned retail stores (click here) will be strategically located in markets of high sales potential and will be situated in real estate situations that are high traffic and make efficient use of floor space. The stores will be architecturally simple and focused on efficiency, which allows Elio Motors to pass savings along to its customers.
- American Made – In the long run, costs will be kept down by building it here. American workers have the right experience to ensure a start-up transportation company will build a high-quality product.
"If you're going to build a sophisticated product like a vehicle," Elio said, "America's still the best place to do it. Hands down."As you can imagine, there are an abundance of examples as to how Elio Motors can sell a vehicle for $6,800. Over the next few months we will continue to share more. But for now, we hope these examples demonstrated that one needs to look beyond the obvious as a means to achieving Elio Motors' key "must haves."