Attracting an automaker is only part of the job for economic development agencies. Seeing a plant launched is another matter.
Five years after raising its hand to take over General Motors' closed 3.2 million-square-foot assembly and stamping plant in Shreveport, La., Elio Motors still is putting together the funding to launch a fuel- efficient, low-priced three-wheeled vehicle in it.
The startup, based in Phoenix, took over the plant in 2013 with a promise to bring 1,500 jobs and set vehicle production to start in 2015. But raising the necessary cash has been a slow process for Elio CEO Paul Elio.
An investor presentation on the Elio website says the company raised $106 million through September 2016. The site also says it has raised $102 million. But last year, the venture filed a document with the Securities and Exchange Commission that said, "We must raise an estimated $376 million to fund production. Our anticipated production timetable is dependent upon receiving such funding in a timely manner, and delays in obtaining additional funding will delay our production timetable."
Later, in August, the company filed another document with the SEC, saying it had cash or cash equivalents of $208,748 and a working capital deficit of $42.7 million.
In April, Elio turned to the cryptocurrency bitcoin as a new way to raise capital. In an accompanying SEC filing, Elio said it plans to launch a "security token offering," partly to fund vehicle production. The digital token will be called ElioCoin.
At the same time, Elio announced that the online retailer Overstock.com Inc. has agreed to purchase $2.5 million worth of newly issued shares of Elio stock.
Overstock CEO Patrick Byrne praised Elio's vehicles in a press release and said he sees possibilities to align Elio's vehicles with Overstock's business strategy.
"Given its breakthrough pricing and ultra-low delivery cost, I anticipate that Overstock Cars and even Overstock Retail will play a role in bringing this product to the public," Byrne said in a statement.
Elio has not said when it will begin hiring. Last week, the company told Automotive News it now plans to start production "76 weeks" after it completes its security token offering. But Elio would not say when the offering will take place.
GM closed the plant following the 2008-09 financial crisis. Elio's plan to have it running in 2015 was delayed until 2016 as it planned a public offering. Last year, it said production would begin in 2019. The new target of 76 weeks after completing the token offering could put the start closer to 2020.
For Louisiana economic development officials, the process may be frustrating. But Elio, for now, remains the only potential mass-production automaker interested in Shreveport — although Hyundai's logistics subsidiary Hyundai Glovis began using about 125,000 square feet of the plant last year.
Louisiana Economic Development Secretary Don Pierson previously told Automotive News that the state economic agency considered Elio to be a "speculative project with a high investment barrier to entry" and said the state incentives offered for the project are performance-based.
Pierson noted that it is common for startups to rely on grants or loans to get up and running. The project also is seeking funds from the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program, which helped bring Tesla to life during the Great Recession. But Elio's application has not been approved.
"Elio has struggled for years after hoping for the award of a federal Department of Energy Advanced Technology Vehicles Manufacturing loan," Pierson said in a new statement to Automotive News. "They have tried many other ways to raise capital — including an IPO and buyer deposits — and have yet to aggregate the funds needed to launch this expensive endeavor."
Like other startups that have attempted to launch nontraditional ventures, Elio has assembled a board of seasoned auto industry veterans as directors. Among them: Jim Holden, former CEO of DaimlerChrysler; Dave Schembri, former president of Smart USA at Penske Automotive Group and a former executive with Mercedes-Benz and Volkswagen; and Ken Way, former CEO of Lear Corp.