Businesses aren't the only groups of people who try to influence what we publish here. TTAC has been getting emails from a number of people who put deposits down on the yet-to-be-produced Elio trike, only to become disillusioned after production has been pushed back a number of times.
There are at least a couple of Facebook pages devoted to disaffected Elio enthusiasts that accuse Elio Motors and Paul Elio of misleading people. In addition to the delays, most of the complaints seem to center around the fact that the company is promoting and taking deposits for a $6,800 vehicle when Elio hasn't yet raised enough money to start production of a car that Paul Elio admits doesn't yet meet their advertised price point.
The company has been using social media to promote the enterprise and its critics have seized on Elio Motors' Facebook page as a venue to express their displeasure. Words like "liars" and "scam " have been tossed around. Consequently, a number of those critics say they have been banned from that page by Elio Motors.
TTAC managing editor Mark Stevenson and I looked into the complaints and we spent some time going through the critics' own Facebook pages. We came to the same general conclusion: most of the furor was being generated by the same half dozen or so unhappy prospective customers, making the same complaints about missed deadlines, a lack of financing to get to production, and skepticism that the trike will be delivered at the promised $6,800 MSRP. What concerned me more than these pretty well known issues was the charge that Elio (the company, not the man) was censoring its critics by banning them on Facebook.
Whether spurred by their complaints or by my own inquiry about the bannings, Paul Elio told TTAC a couple of weeks ago that at least some of the the bannings were "a mistake" even though he claimed they were mostly due to people using abusive language. At the time he told me he was considering a blanket unbanning.
While banning people from a company's Facebook page can be spun as censorship, just about anyone who has ever created online content knows how abusive internet commenters can get, so I have some empathy for Paul Elio. It's not his job to provide a forum for people to say bad things about him.
This was all transpiring against the background of Elio getting ready to announce that, due to substantial interest, they were going to be opening up their enterprise to smaller individual investors. In February, the company announced that it was going to be using the statutes in the 2012 JOBS act to offer equity stakes to accredited investors (those with 7 figure assets and incomes of greater than $200k/yr). Funds raised from those investors are currently being used to fabricate the final pre-production P5 prototype that will be using Elio's own engine and a production spec transmission from Aisin. Elio Motors says that subsequent to announcing opportunities for accredited investors, they were inundated with inquiries about investment opportunities for smaller investors.
Now, investors with fewer assets and smaller incomes will also be able to take an equity stake in the company, investing as little as $250.
At the time I spoke with him about the Facebook issue, Paul Elio asked me to hold off writing about the Facebook unbannings until the investment opportunity was announced. While I'm happy to have the good rapport that I have with Paul and his team, I'm not on that team and we publish things at TTAC based on our judgment of their newsworthiness, not based on what's most helpful to a story's subject. As it remained to be seen what would happen on Facebook, we've delayed this post until now.
So far it looks like Elio has been true to their word and unbanned all of their critics, though it appears that they're reserving their right to re-institute bans based on what Paul Elio describes as bad behavior. As I expected, being unbanned hasn't really mollified the critics. Just about the only thing more passionate than a convert is a convert who has renounced their faith.
In the meantime, Elio Motors has gone ahead with their crowdfunding effort directed at small investors, and they've announced that there has been significant interest. In less than three weeks, more than 5,000 small investors have "expressed non-binding interest" in putting up over $17 million, via the startengine.com website. What that means is that per the Security and Exchange Commission's rules, while no money has yet changed hands, those investors have indeed pledged that amount of money — though they can opt out, hence the "non-binding" part. When the enrollment period ends at on July 31, Elio will then present documentation of the investors' interest to the SEC and, if granted approval, Elio will then make those investors a formal offer.
The company is hoping to raise a total of $25 million through this route. Elio says those funds will be used to build 25 pre-production validation vehicles. All along, I've felt that the most legitimate criticism of the Elio enterprise is whether or not the company will be able to raise the $200 million that it says it will need to start production. While it's only a fraction of the amount needed, $25 million is a good start.
At the same time, the automotive history buff in me knows that Preston Tucker was prosecuted by the Securities and Exchange Commission over how he raised money from investors. The infamous Dale's Liz Carmichael was also prosecuted for fraud relating to investments in the company. While Elio Motors needs to find investors, I think that taking on grassroots investors creates another potential issue for the company's critics.
Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can get a parallax view at Cars In Depth. If the 3D thing freaks you out, don't worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS
The post Elio Unbans Facebook Critics, Has $17 Million Pledged From Small Investors appeared first on The Truth About Cars.
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