Re. whether building their own engine is a good idea - designer IAV seems to have excellent credentials. Engine design consultants to many of the biggest names in auto manufacturing. Beyond that, I'd guess its all about the execution.
Remember, we're talking about an approx 1.0 liter automotive engine. Not a bike engine or industrial. I think there are precious few of those in NA. Add to that the fact that any maker of an existing engine would have Elio over a barrel as far as price and availability of spare parts. If an engine maker is a major player (i.e. a quality manufacturer with a reputation worth wanting their engines for), they would be competing with Elio for "car" sales and will want Elio to fail. So they would get no deal from Honda, GM, etc etc.
Getting a buildable design from the likes of IAV is probably Elio's best option.
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Coast long and prosper.
Driving '00 Honda Insight, acquired Feb 2016.
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