A car that costs about $6,800 and is reported to attain more than 80 miles per gallon could be on the market next year, says Elio Motors founder Paul Elio.
The start-up auto company has teamed with California-based Industrial Realty Group, (IRG) to buy a shuttered General Motors Assembly Plant in Shreveport, Louisiana, where plans are underway for the production of Elio’s three-wheeled vehicle.
The two-passenger car attains its fuel efficiency through its linear, tandem seating design, says Elio, a founder of ESG Engineering in Tempe, Ariz. Elio Motors has been showcasing test mules (pre-prototypes) around the country and is the process of raising capital from private investors. The company is also attempting to drum up pre-orders through its website by offering a unique financing model: Buyers can get the car for “free” if they commit to purchasing gas through an Elio credit card, which will charge three times the retail rate for gas. The difference goes toward the car note.
Elio Motors plans to occupy about one-third of the three million sq. ft. foot former GM facility, where the Detroit automaker built light trucks for decades until August 2012. Stuart Lichter, president of IRG, saw the site’s potential for an auto-start-up because it contains millions of dollars’ worth of state-of-the-art manufacturing equipment. IRG is a leader in repurposing vacated corporate and industrial properties throughout the United States.
“What attracted us to the site was the quality of the asset. It was probably the best asset in 500 to 1000 miles,” Lichter said. “It’s got great power and good bones. It’s pretty much set up and ready to go, and was, by far, one of the best GM facilities out there.”
GM Shreveport was one of 89 former GM locations across 14 states that had been acquired by the independent Revitalizing Auto Communities Environmental Response (RACER) Trust, established in U.S. Bankruptcy Court after the Detroit automaker entered Chapter 11. The trust was created to help backfill vacant GM properties and, by doing so, restore local jobs. Because of the facility’s modern features, established infrastructure, and the depth of North Louisiana's manufacturing workforce, Lichter believed the property would work for Elio Motors, which had been looking for a site to build its vehicles.
“There are tremendous marketing advantages for a site like this, and with millions of dollars in equipment and utilities, it meant significant savings for Elio,” said Lichter. “We showed them how they could cut cost and time and get into the business faster with this site.”
That’s an appealing proposition, given the high failure rate of most auto-start-ups.
IRG’s book of properties includes the former Goodyear Tire & Rubber headquarters and factory in Akron, Ohio, a massive site originally built in 1871. In 1988, Goodyear decided it was cheaper to demolish the three million sq. ft. building than to renovate it, but Lichter saw its potential. The refurbished space, called Canal Place, includes office, industrial and self storage facilities. IRG has leased more than 2.5 million sq. ft. of the space to about 100 different businesses—Time Warner Cable, Donna Karan and Bank One among them. IRG is planning to add a hotel and residential apartments this year.
Shreveport’s former GM plant sits on 530-acres in an industrial park southwest of town, and has an air-conditioned 1.8 million sq. ft. main building, originally built in 1981 and expanded in 2002 to feature high bays and top line equipment. Another similarly modern 1.5 million sq. ft. facility is also on the property. The site is close to rail and interstate, and according to RACER, has no unresolved environmental issues.
“We see this site as adaptable to a variety of sectors,” said Scott Martinez, president of the North Louisiana Economic Partnership. “We have an established industrial sector here in northwest Louisiana, and we’re attracting new projects because of the state’s pro-business climate, transportation infrastructure and manufacturing workforce.”
Lichter agrees that North Louisiana and the former GM plant are well-positioned to attract other manufacturers, suppliers and businesses.
Elio says he hopes to ultimately sell the car to international markets, but will focus on domestic sales first. The company will reveal its retail distribution model in the next few months.