The fate of this 3-wheeled, futuristic, ’84-MPG’ car depends on government loans

Elio Motors says it’s closer than ever to putting its “84-MPG” two-seat three-wheeler into production, but that still may not be close enough.

The company recently secured additional funding, it says, but is still short of what it needs to start production at its former General Motors plant near Shreveport, Louisiana.

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It’s counting on government loans to make up the balance, but those may not be a safe bet.

A “crowdfunded” stock offering that will end February 1 has already put the company “over the hump,” Elio vice president of sales Jerome Vassallo told The Detroit News at the ongoing auto show in the Motor City.

The “crowdfunding” program took advantage of a new law that allows less-wealthy investors to put up to $15,000 into startup companies, which are limited to a total of $50 million raised from these so-called “non-accredited investors.”

Elio said last year that it needed $230 million to start car production in Louisiana, and Vassallo said the stock offering has already provided a significant amount of funding.

That includes enough money to build 25 copies of the fifth-generation prototype it brought to Detroit. These are needed for further development work and crash testing.

Elio also claims to have more than $300 million in pre-orders for its three-wheeled car.

But the company is reportedly pinning its hopes on a loan from the Department of Energy’s (DOE) Advanced Technology Vehicles Manufacturing (AVTM) loan program.

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ALSO SEE: Elio Motors Raises $22 Million From Small Investors, Still Needs $130 Million More (Jul 2015)

It was set up to provide low-interest loans to carmakers and suppliers to upgrade facilities and build more efficient cars, whose fuel efficiency would be at least 25 percent higher than the vehicles they replaced.

Since the first loan was closed in 2009, the DoE has distributed $8 billion through the program.

That money helped fund Tesla’s conversion of a former GM-Toyota plant in California to electric-car production, as well as Nissan Leaf production in Tennessee, and upgrades to Ford plants in six states.

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But no major automakers have received loans in years.

Aptera Motors tried repeatedly to secure an AVTM loan for its own three-wheeler; when the company went under, officials blamed the long application process for allowing Aptera to wither.

The DOE has hinted at reviving the AVTM loan program, but it may limit new loans to suppliers.

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MORE: NHTSA To Alter Vehicle Code To Prevent 3-Wheelers Like Elio

And getting a loan is never a guarantee of success.

Fisker Automotive secured $529 million for its Karma extended-range electric luxury sedan, while VPG received $50 million for its natural-gas wheelchair van. That didn’t stop both companies from going under.

The odds of starting a successful new car company are quite small, and Elio’s unusual vehicle complicates matter further.

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Even if it can attain the funds it needs, Elio may now face an additional legal challenge as well.

The National Highway Traffic Safety Administration (NHTSA) recently proposed changes to regulations that would essentially ban three-wheeled cars.

Elio hopes to get around regulations by classifying its car as a motorcycle, but the proposed new rules would close that loophole.

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This story originally appeared on Green Car Reports. Copyright 2016