Elio is working to get its 3-wheel commuter classified as an auto-cycle by the feds. This would allow it to retain the advantages of being a motorcycle such as lower insurance rates, lighter weight, use of HOV lanes, etc, while dropping the requirements for the operators to wear eye protection and a helmet while driving it.
AFAIK the Elio is legally a motorcycle in all states. The problem is trying to market a car-like vehicle in which the operator would be required to wear eye protection in all states, and a helmet in most of them. Looking for an out by calling it a cycle-car or autocycle would make for better sales at the risk of having the rule-making nannies in Washington decide that the vehicle must meet ALL the requirements, including emissions and safety that a car must. This will add about 1200 lb to the weight of the vehicle and make the engine notably more expensive.
The attempt is a risky move on Elio's part. An adverse ruling would effectively kill the company and the government is not really concerned about either safety or fuel economy but rather self preservation.