International Newsmaker Q&A Paul Elio

May 19, 2016
In April Elio Motors established a Pilot Operations Center for evaluating the E-Series version of its three-wheeled vehicle with the goal of rolling out pre-production Elios by the end of this year.

In April Elio Motors established a Pilot Operations Center for evaluating the E-Series version of its three-wheeled vehicle with the goal of rolling out pre-production Elios by the end of this year.

“The E-Series vehicles are an important bridge from the prototype phase to the commercial production phase,” says Gino Raffin, vice president of manufacturing and product launch.

An initial build-out will be used to calibrate and test the anti-lock braking system supplied by Continental Automotive. As additional vehicles are completed they will be used for a variety of aerodynamic, safety and durability testing.

“Beginning the E-Series assembly is another important milestone in our journey toward production, as these test vehicles will allow our engineering and supplier teams to evaluate and validate our design,” says founder and CEO Paul Elio, who recently answered a series of questions posed by Aftermarket Business World:

Q: What are some of the elements of your global research process that netted the technological developments for this vehicle?

A: Because I owned my own engineering services firm, I had the opportunity to work with several automotive manufacturers and automotive suppliers and was able to observe and learn how the industry operates for years. Much of the best practices that I observed we have incorporated or improved upon for the Elio design and for our company’s operations.

Additionally, we have drawn upon the backgrounds and experiences of our key executives in creating a high-level knowledge base, including Hari Iyer, our chief operating officer, Steve Semansky, vice president of supply chain management, Jeff Johnston, vice president of engineering, Gino Raffin, vice president of manufacturing and product launch, and Jerome Vassallo, vice president of sales. They have brought some insightful ways that will allow us to do this better.

We’ve also been able to assemble a blue-chip roster of automotive suppliers. For example, we have two of the largest global suppliers – Bosch and Continental onboard. Their global expertise has been instrumental in our overall development.

Q: You’ve been focusing on suppliers in North America; how important is this aspect related to your company philosophy/mission compared to the global outreach for technological advances?

A: Manufacturing is too important to our country’s long-term global competitiveness to give it away. As a nation, we need to have a strong manufacturing core, where we are constantly inventing, improving and innovating. It’s why I went into engineering in the first place…to make things, and, to make things better. Elio Motors is dedicated to creating American jobs and working to make our manufacturing sector and our economy stronger.

However, manufacturing jobs in the United States have been disappearing for two decades. According to the U.S. Department of Labor, approximately 16.8 million people were employed in manufacturing in 1994. By 2014, that number had dipped below 12 million. Much of this decline has come in the auto industry. According to Center for Automotive Research (CAR), U.S. domestic auto manufacturing market share was 73.7 percent in 1993. But, according to the Wall Street Journal, that share dropped to 42.4 percent in 2013.

We are committed to purchasing our content in North America to help strengthen American manufacturing and create as many jobs here as possible. That’s why it is so important to build the Elio targeting utilization of 90-percent North American content. And, that’s why it’s so important to build the vehicle in Shreveport, La. Elio Motors will create an anticipated 1,500 direct jobs in Shreveport and another estimated 1,500 at its supplier partner companies. In addition, these manufacturing jobs could create another 18,000 jobs across the country.

A great example of our philosophy in action is our audio system. We are working with MTX Audio, which has agreed to assemble our audio system at a facility in one of their facilities in the U.S. It’s virtually unheard of in the auto industry to provide a North American-assembled audio system. But, our commitment to North American content is strong enough to persuade our suppliers to do more production here.

Q: Your initial rollout is set for the U.S.; what are your plans/goals for future international distribution? Do you know yet which countries you will target first?

A: Eventually, we will sell vehicles overseas, however, right now, we need to focus on the United States first, then move to international distribution.

Q: The Elio is not really a car, nor is it a “motorcycle.” Do different states have different classifications? Or is the classification done at the federal level? What is the current status of this situation?

A: Vehicle classifications are determined at the federal level, and currently any vehicle with three wheels is considered a motorcycle. Each state has the leeway to create different helmet and licensing standards.

An Elio, though classified as a motorcycle, does not require a special license to operate in most states and it’s actually safer to not wear a helmet given the seat-belt restraints and airbags. There are only a few states left that require helmets that we are actively working with to modify those requirements. We continue working with individual state legislatures to finalize exemptions for helmets, licenses and appropriate safety standards, where necessary.

We also are supporting legislation at the federal level that would create “autocycle” as an official designation for an enclosed three-wheel vehicle. Then, the federal government would have the authority to create regulations that would be in the best interests of consumers who own a three-wheeled vehicle.

Q: How many dealerships do you have planned thus far?

A: Current anticipated plans are based on 120 retail centers in the top 60 markets in the country. Heavily populated markets such as New York or Los Angeles may have more retail centers and the smaller markets may have one retail center.

Q: How will the purchase process be different from that of traditional automakers?

A: Our business model is to sell the Elio through company-owned stores, much like Tesla does. We plan to offer a no-haggle, simplified buying experience that could include online purchasing, where the law would allow, with financing options that are non-traditional, which might include buying with a credit card.

One of the biggest differences will be our ePlus system which offers optional equipment a la carte, not in option packages – the traditional manufacturer content strategy – which forces you to buy features that you neither need nor want. Every Elio will come with air conditioning, power windows, power door lock and a stereo, because everybody wants these features.

In addition to color choice, we have two variants from the factory – automatic and standard. Additional options can be added post-manufacturing in one of seven strategically located customization studios or after the vehicle is delivered.

If you want a power leather seat, Lear is our seating supplier, we can get you that. If you want blindspot-detecting mirrors, Continental is our major electronics supplier, we can get you that.

Q: How does this order and delivery process work behind the scenes?

A: If you come into our showroom and order an Elio with automatic transmission with the leather seat and the blindspot-detecting mirrors in our Red Hot body color, the order will be sent to one of our seven customization studios. Our plan is to close our stores at 9 p.m., but build out vehicles until midnight, which would give us three hours to clear the system. At midnight, those vehicles will go on trucks, and with seven customization studios, we’ll be within nine hours of all of our stores. Theoretically, by 10 a.m. the next day, the customer will get their vehicle exactly the way they wanted it the day before, no matter what time they came into the showroom.

Q: How can a manufacturer become a part of the Elio’s production? What are the opportunities and requirements?

A: We’ve got buy-in from major suppliers – both Bosch and Continental are going to have content available on the ePlus system – and they’re two of the largest suppliers in the world. Obviously, there will be some smaller suppliers – whom we love.

At first, we were concerned about Bosch and Continental competing and not doing this exclusively, since they’re very large Tier One suppliers. We expected them to say, “If you want our technology, we want it on the Elio exclusively,” but it was the exact opposite. They are ecstatic to finally be able to compete in front of the customer. They’re confident in their products, they’re confident in their abilities, and they’re excited to go have that competition.

Regarding becoming a supplier to Elio Motors, although we’ve already formed partnerships with a number of industry suppliers for major vehicle systems there are opportunities to be involved. To supply on the original equipment side, we recommend that you contact us by e-mail at [email protected] or through our contact page on the Elio Motors website to begin a dialogue.

Q: How can an aftermarket business become a supplier of components? What are the opportunities and requirements?

A: For companies interested in becoming part of our ePlus system for options and accessories, it’s important for them to understand how our process will work.

We are a retailer, so we’re going to carry competing brands in accessories. The benefits to the supplier are several. The basic requirements are that the supplier should be a U.S. company with manufacturing in the U.S. So that we can discuss Elio Motors’ quality and other requirements in more detail, we recommend that you contact us by email at [email protected] or through our contact page on the Elio Motors website to begin a dialogue.

Q: How will the maintenance and repair of the vehicles be handled? Will this work be done exclusively at your dealerships, or also at independent repair shops?

A: We have an anticipated agreement with Pep Boys to be the service provider for the vehicles. With more than 800 locations around the country, Pep Boys would provide Elio Motors with more service locations than many major automotive brands today.

Q: What are the opportunities and requirements for a shop interested in being certified for servicing the vehicles?

A: Pep Boys is anticipated to be our designated service partner. In areas where Pep Boys does not have a location near our dealership, we’re currently evaluating several solutions to fill this need.

Q: Where is training available for repairers interested working on these vehicles?

A: Elio Motors is developing our service training plans now and will have further details in the future.

Q: How can an aftermarket distributor/retailer become a supplier of repair and maintenance parts? And add-on accessories?

A: Aftermarket distributors for repair and maintenance products are not part of our business model, since we will use Pep Boys and their distribution network. To become a supplier of options or add-on accessories, the supplier would need to reach out to our Accessories Group by email at [email protected].

Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.

Sponsored Recommendations

ZEUS+: The Cutting-Edge Diagnostic Solution for Smart, Fast, and Efficient Auto Repairs

The new ZEUS+ simplifies your diagnostic process and guides you through the right repair, avoiding unnecessary steps along the way. It gives you the software coverage, processing...

Diagnostic Pre- and Post-scan Reports are Solid Gold for Profitability

The following article highlights the significance of pre-scans and post-scans, particularly with Snap-on scan tools, showcasing their efficiency in diagnosing issues and preventing...

Unlock Precision and Certainty: TRITON-D10 Webinar Training for Advanced Vehicle Diagnostics

The TRITON-D10 lets you dig deep into the systems of a vehicle and evaluate performance with comparative data, systematically eliminating the unnecessary to provide you with only...

APOLLO-D9: Trustworthy Diagnostics for Precision Repairs

The APOLLO-D9 provides the diagnostic information and resources you need to get the job done. No more hunting through forums or endlessly searching to find the right answers. ...

Voice Your Opinion!

To join the conversation, and become an exclusive member of Vehicle Service Pros, create an account today!