Car manufacturer Elio Motors just announced a token sale for its own ElioCoin. The token sale, scheduled for 2019, will help the startup fund production of its vehicle.

Elio Motors is best-known for its quirky, highly fuel-efficient and cheap, three-wheeled vehicle that originally debuted at CES 2015. The car debuted with great acclaim, although the startup has struggled since then.

This past week, Elio Motors announced a partnership with Overstock.com to relieve some of its debt. Overstock.com announced it was buying $2.5 million of newly issued Elio shares (Elio’s common stock is traded on OTC markets). That money is expected to pay off outstanding debt and accounts payable from the company.

At the same time, Elio Motors announced the future launch of an initial coin offering – although they’re officially calling it a “security token offering”.

Funds raised from the ElioCoin token sale will be used to fund production of the company’s vehicles. Despite the company’s struggles, production is still scheduled to get underway in 2019.

Elio Motors has partnered with JonesTrading to launch its token sale. The tokens will initially only be sold to accredited investors.

What Happened with Elio Motors? Why Does the Company Need Funding?

After debuting at CES 2015, Elio Motors seemed poised to break into the car manufacturing industry in a big way. The company attracted reservations from 65,000 customers for its three-wheeled vehicle. Reservations were worth between $100 and $1,000.

Elio Motors, which calls its flagship three-wheeled vehicle “Elio”, emphasizes strong fuel economy and an affordable price. Drivers trade the luxury and convenience of a normal-sized vehicle, but they get a vehicle in return that offers 84 miles per gallon priced at less than $8,000.

Another advantage of the Elio vehicle was that drivers could still fill up at an ordinary gas station. There was no need to seek out charging stations, for example, or install special hardware in your own home.

Of course, that vehicle has not yet been mass produced. To produce the vehicle, Elio Motors purchased a lease on an old GM manufacturing facility in Shreveport, Louisiana. However, a lack of funding reportedly led to tensions with the local community.

What happened to Elio Motors after a strong start? Why did Elio run into money trouble?

The company had trouble raising the hundreds of millions of dollars it believed it needed to produce its vehicles. There were delays up until summer 2017, when the company announced it had just a few thousand dollars to its name and debts of tens of millions of Euros. They furloughed hundreds of employees and began seeking funding.

Despite these issues, Overstock.com clearly saw the company as a strong investment opportunity. Overstock.com founder and CEO Patrick Byrne claims he “was in awe” after driving in the car for five minutes, saying he was “confident that this will become my car for at least two-thirds of the days I drive.”

Overstock.com is buying newly-issued shares of Elio common stock at a price of $2.75 per share.

How Will ElioCoin Work?

Soon after announcing the Overstock.com investment news, Elio Motors announced its security token sale for Elio Coin.

Elio Motors has partnered with JonesTrading for the security token offering, making this the first digital token sale led by a major investment bank.

As a regulated security token sale, ElioCoin’s ICO will only be available to accredited institutional investors – so unless you work for a major financial institution or fund, you won’t be able to purchase ElioCoin for your crypto portfolio anytime soon.

It’s not totally clear how ElioCoin will work. The Verge is reporting that investors will be able to redeem ElioCoin tokens for a real Elio vehicle. Others suggest that ElioCoin will represent a share of Elio common stock.

Elio Motors has not yet announced how their ElioCoin will work. However, if the company is successful, they could launch their $7,500, three-wheeled, highly-fuel-efficient vehicle before the end of 2019. Stay tuned for more information as the ElioCoin token sale continues to roll out.

[FREE] Get Our Best Crypto Trading, Mining & Investing Hacks:

*Action Required* Enter Your Email To Get Insight For Trending Coin News & Reviews

I will never give away, trade or sell your email address. You can unsubscribe at any time.


Please enter your comment!
Please enter your name here

eighteen + nineteen =