Elio Motors, the Arizona-based startup that boldly promised to change the way America commutes, has received a $2.5 million rescue package from Overstock.com. The investment should help Elio pay its debts and begin building cars after years of costly delays that sapped its credibility, angered the officials who helped it, and threatened to topple the young firm.
Overstock purchased $2.5 million in Elio’s common stock. Patrick Byrne, the retailer’s founder and CEO, observed he shares Elio’s vision of bringing an affordable, super-efficient commuter car with three wheels (pictured above) to the American public.
“I believe Elio’s vision and business model to build a $7,500 ultra-high mileage, ultra-fuel-efficient car-like vehicle is a win for America,” he said. “I am confident that this will become my car for at least two-thirds of the days I drive,” he added. He recently sat in an early prototype on the streets of Manhattan and concluded it’s a hit in the making.
Byrne hinted Overstock could sell Elio’s first car, a move which would help the startup save a substantial amount of money by bypassing the traditional brick-and-mortar dealership model. The company would presumably sell its cars online, though it would still need stores to perform repairs.
Of course, Elio needs to build a car before it can start thinking about selling one. The company’s decision-makers confidently stress they can start production in a former General Motors factory located in Shreveport, Louisiana, before the end of next year, according to The Verge. Overstock’s investment won’t cover the full cost of launching the three-wheeler, so Elio is turning to cryptocurrency in a bid to raise capital. It will introduce a security token offering (STO) named ElioCoin that it claims is the first digital token associated with production of a motor vehicle.
Only institutional accredited investors will be eligible to purchase the initial tokens. The tokens will be traded on an Overstock-owned platform named tZero, and investors will ultimately have the option of redeeming ElioCoins for a car, The Drive explained. Elio has consequently canceled plans to raise money through a $100 million IPO, according to Nasdaq.
The news comes as a relief to the roughly 65,000 hand-raisers who sent the company a deposit in exchange for one of the first spots in line. Though Louisiana officials previously warned reservation holders had lost their money, Overstock’s involvement represents a glimmer of hope that Elio will make its intriguing three-wheeler — which promises to return a jaw-dropping 84 mpg without any kind of electrification — a reality.