The story of the Tucker Corporation is a story of government and big business keeping the small businessman down. I first heard of it through the 1988 movie Tucker: The Man and His Dream. Recently I read Steve Lehto’s new book, Preston Tucker and His Battle to Build the Car of Tomorrow, which tells the same story but with more details and information, as well as his perspective as a lawyer on Tucker’s legal battles. Lehto also wrote an article for Road & Track about the parallels between Tucker of the 1940s and Tesla of today. Both companies are small upstarts that bucked the system to produce futuristic cars using technology that was previously unheard of. While reading the book I thought of these similarities as well, but it wasn’t so much Tesla that came to mind as much as another small upstart company – Elio Motors.
The parallel may not seem obvious at first, but stay with me. First of all, it’s not a perfect parallel. The Tucker 48 was a revolutionary automobile for its time. It was supposed to have advanced technology such as fuel injection, disc brakes, tubeless tires, a safety windshield, padded dashboard, and integrated rollover protection. All of these are considered standard equipment today, but were unheard of in 1948. Elio also uses some advanced manufacturing techniques, but they’re not afraid of simplicity and “adding lightness” as well. I certainly wouldn’t call the Elio low-tech, but like I’ve said before, sitting inside the P5 prototype at NYIAS reminded me of some of the cars of the 80s and 90s I’ve owned in its simplicity. It’s no BMW, but you’re not roughing it, either. Controls are simple and easy to operate, rather than having to roam through an ocean of identical buttons to figure out how to turn the temperature down a little bit. And what better way to significantly reduce drag than by making the body less than half the width of a standard car?
Tucker’s legal troubles were what brought the company down. The Securities and Exchange Commission accused Tucker of fraud. They believed that Tucker never intended to follow through on his bold claims of building a car at all, despite collecting a total of $27 million from stockholders, future dealers, and deposits on cars that had yet to be made. Tucker was eventually cleared of all charges, but not before the company was ruined by the legal battle. It’s no coincidence that the investigation was spurred by politicians from Michigan with close ties to Detroit, and the large automakers of the time.
Elio, on the other hand, has had no trouble with the law. They’re in compliance with SEC regulations. In fact, they’re working with the government to make their cars more legal and accessible to people. According to one of Elio’s blog posts, originally 42 states would’ve required a motorcycle endorsement to operate an Elio, and 36 would require a helmet. That’s because the Elio, having only three wheels, is technically a motorcycle, so motorcycle helmet and licensing laws would’ve applied. No one’s going to want to get a motorcycle license specifically to drive an Elio. I used to think Elio didn’t have a chance to succeed because of this hurdle.
But Elio has worked with state legislatures to create the “autocycle” category for an enclosed vehicle that operates like a car rather than a motorcycle. At the time of this writing, 40 states will now allow you to drive an Elio with a regular driver’s license (see the blog post for a list of the 10 hold-outs), and only West Virginia requires a helmet for drivers older than 21. That’s quite impressive, but I don’t think Elio will be satisfied until they’ve converted all 50 states to their way of thinking. Given their success so far, I’d say Elio has been success not only working within the law, but getting the law changed by working with the government, not against it.
However, to date Elio has collected 54,826 deposits on cars they haven’t built yet. (Full disclosure: One of these deposits is my own.) Like Tucker, they have not yet built a single production vehicle. They’ve built five prototypes, rather than the single “Tin Goose” that Tucker built, shown above. While Tucker initially built 50 cars (plus one that was assembled from available parts after production ended), Elio is gearing up right now to build 100 pre-production models. That’s many more than the 25 reported by Jalopnik last year. That same article also reports that full production was due to begin during the first half of this year. Clearly that’s not going to happen.
History has shown that Tucker not only genuinely intended to put the Tucker 48 into full production, he was 90% ready to do so when the SEC raided and effectively shut down the factory. Similarly, the June 16 edition of Elio’s Momentum blog shows body panels and powertrains being prepared for vehicle assembly, and the June 23 post shows the first production line car under construction.
But naysayers still abound, and there are reasons for that. Full production is currently scheduled to begin sometime in 2017. But that’s after projections of mid-2016, third quarter 2015, and July 2014. Various articles around the interwebs, like this one from Jalopnik and this one from Gas2, paint the company in a rather negative light. Granted, the Gas2 article is from 2013 and primarily cites the Elio’s motorcycle classification as the reason they will fail – a reason that has been successfully addressed in most states. But Tavarish’s points in the Jalopnik article remain true – the date keeps getting pushed out, and many people who have put deposits down on the Elio are unhappy.
You don’t need to search any further than the independent Elio forums, or even comments on Elio’s Facebook page, to see the skepticism of many would-be owners. I can see their point. If I was promised a car in 2014, hadn’t gotten it, and was told it would be at least another year before I did, I might be a bit cranky too. The issue comes down to funding. It takes a lot of money to put a car into production, often more than a company expects. With no ongoing sales to fund future production, a company can get stuck, needing to raise more money before they can continue. It’s happened to Elio, and it happened to Tucker, too.
Tucker also promised designs and features that would not end up being available on the actual car. The front fenders were supposed to turn with the wheels to aim the headlights into the corners. Instead the fenders were fixed, and the center “cyclops” light turned instead. A 589ci flat-6 motor connected to a unique torque converter transmission was supposed to go into the Tucker 48. After the engine fell far short of expectations, an engine originally built for the Bell 47 helicopter was used instead. (Can you imagine any helicopter motor meeting modern emissions standards?) A few automatic transmissions were tested, but most cars got a manual from Cord. Disc brakes, fuel injection, tubeless tires, and magnesium wheels were all dropped.
Aside from missed production dates, Elio has not gone down this path of making promises they can’t keep. (Ironically, their front fenders, though devoid of headlights, do turn with the wheels.) But they’ve certainly been hedging their bets. The Elio is now said to get “up to” 84mpg, with a price “starting at” $6,800 – two numbers that used to be expressed as absolutes. Each Elio newsletter has a disclaimer paragraph at the end discussing “forward-looking statements,” and that information is subject to change for a variety of reasons. It may sound like Elio is afraid of commitment, but they’re really just covering themselves in case circumstances change. And to their credit, fundamental features and designs of the Elio have not changed significantly since they were announced, unlike the Tucker 48. In fact, many additional features are listed as being available in their online configurator, such as spoilers, different fenders and wheels, sound system options, and a nearly endless selection of wraps if the standard colors don’t appeal to you.
Will history repeat itself? Is the SEC preparing to raid Elio’s Arizona headquarters as the first cars come off the production line, just like they did to Tucker? I doubt it. For one thing, despite the understandable frustration of customers who have been literally waiting for years for their promised deliveries, Elio’s been aboveboard with their finances. But there are many ways to take down a car company. Just look at Tesla, who isn’t even allowed to sell their cars in some states because of dealer franchise laws prohibiting direct sales from automakers. There are reasons why there are only three – I mean, two and a half – American car manufacturers left.
Assuming they can stay afloat long enough to actually build the cars that people have purchased, then sell more, I think Elio will survive as Tesla has – but for a different reason. That reason is the car itself. Gas is cheap and hybrid sales are on the decline, so 84mpg isn’t going to be a big selling feature. The Elio is small, and all anyone seems to want these days is a truck, SUV, or a V8 muscle car. Even at $6,800, most people aren’t going to want a car that you can’t throw the whole family and a whole heap of luggage into. Tesla, by building luxury sedans and SUVs, has launched a direct competitor to them, which is also what Tucker did. But the Elio appeals to a niche market, one that is not a threat to the mainstream automakers.
The problem with a niche market is that it is, by definition, small, like the Elio itself. Is it too small to support Elio? I don’t think so, and nearly 55,000 people who have joined me in putting down deposits on an Elio agree. Additionally, I can see some potential markets that Elio might not have considered. This could be a boon for enthusiasts. An Elio can be the everyday commuter car, letting us leave the track car, broken project car, or gas guzzling tow vehicle home most of the time. Parents looking to buy a first car for their kids can get a new Elio for the price of a lifted 1979 Ford F-150 Ranger (not a typo, the Ranger was a trim level of the F-150 back then), a 1987 Mustang GT convertible (that would be a very bad idea), or a 2007 VW Jetta Wolfsburg (don’t get me started). None of those other cars would be new or have a factory warranty. The Elio isn’t powerful enough to get into very much trouble, either with speed or with certain other activities for which the Elio’s back seat is certainly too small. Believe me – I’ve sat in one. Just sat. Nothing else.
Steve Lehto asked me to let him know my thoughts after I read his book. We swapped a few emails discussing some of the parallels and differences I’ve mentioned here. Despite having written the comparison to Tesla for Road & Track, he actually agreed with me that Elio is a better example, despite not being in the news as much. I don’t think staying out of the news is a bad thing. Preston Tucker was a great salesman, but one of his problems was selling promises he couldn’t keep. Paul Elio personally showed me around the P5 prototype at NYIAS. While he’s certainly enthusiastic about the car, he came across to me as more genuine than a salesman, and far more understated than Preston Tucker. Keeping promises and staying out of the spotlight, unlike Tucker, may help ensure Elio’s success.