Yes, I wondered about a diesel. Why not use the inherent high-mileage of those? Furthermore, I guess I'm in a quandary about why Elio needs to develop its own engine. That's a tricky task that could have disastrous results - and, it takes forever. If you want to kill a car, build one that has a brand-new engine that dies after 30,000 miles. Remember GM's ill-fated attempt at diesels?
.... I'd get the "tried and true" out the door to establish the Elio as viable and then spend the R&D time and money on a specialized engine. What they do not need is "bad Press."
I'll try to answer some of your questions.
First: EM said, to buy an "existing engine" would have been too costly.
As EM stated, the engine that is closest to what meets their goal, is (was) the Geo Metro, 3-cyl. Since the molds are no longer available, (and the technology is over 20 years old) a
complete redesign was needed anyway. At this point in time it would be ridiculous to STOP work on an engine that is nearing completion.
Altho a diesel engine could have met the 84 mpg goal quite easily, (my opinion) It too, would have required a complete design, been more costly, And with diesel fuel costing 20-30% more than gas, would also have also cost us more to operate.