Coda Automotive Faces Self-Reckoning in 2013

By · December 19, 2012

Coda inspection

A quality inspector examines the Coda sedan at its assembly plant in Benecia, Calif. (Photo by Brad Berman)

For the past couple of years, the electric car market has been characterized by a degree of irrational exuberance. Much of that was killed in 2012. This past year dealt a tough lesson about overstated sales goals for Nissan—and bankruptcies for A123 Systems, Azure Dynamics, Ener1 and Think. Better Place’s Shai Agassi stepped down from the top position at his company, where elaborate battery-swapping schemes have not gained traction. The takeaway for EV companies and fans in 2013 should be to reset expectations—and to be brutally honest about real shortcomings. That’s where Coda Automotive comes in.

Last week, a former employee who asked to remain anonymous informed me that Coda, the maker of a bland China-sourced EV, recently laid off approximately 50 of its employees. Only after PluginCars.com posted the news did Coda officially acknowledge the lay off. After the post (which was picked up by major news outlets), two former employees provided more disturbing news about the state of affairs at Coda. They accused executives of refusing to accept or acknowledge the realities of its business.

“The core problem within the company is they didn’t want to listen to people that had a different opinion,” one source told me. “You couldn’t disagree with the senior organization and be held in good standing.” The source also said the company had a “spend mentality,” explaining that executives were lured to the company with salaries above industry norms, made frequent flights to China in business-class, and despite low sales (only about 100 vehicles so far, and only available in California) had at least a few more vice-presidents in the sales department than Coda required.

I made multiple requests to speak with Coda’s communication team, to Mac Heller, its chairman, and to Shaun Del Grande, the president of the Silicon Valley dealership group that sells Coda’s sedan. All requests were declined. “We decline to respond to rumors and speculation from anonymous sources,” said Matt Sloustcher, a company spokesperson.

The layoff of approximately 50 people—predominantly in sales and marketing—apparently corrected some of the bloated sense of optimism about the prospects for a $40,000 electric car built to China’s relatively low standards of quality and safety. In a company statement, Coda said the lay off was “to streamline our operations and right-size the company.”

Coda’s board is made up of razor-sharp business leaders, such as Heller, formerly the top mergers and acquisition guy at Goldman Sachs; Henry Paulson, another Goldman Sachs exec and former U.S. Secretary of the Treasury; John Bryson, former U.S. Secretary of Commerce; and Thomas McLarty, former Chief of Staff for President Bill Clinton.

What these investors apparently couldn’t see—they are, after all, Wall Street guys, not car guys—has been made abundantly clear by the market. The company said it would sell between 10,000 and 14,000 cars by the end of 2012—but it has sold fewer than 100 units. That’s a clear message. Did Coda leadership not expect its electric sedan to be cross-shopped against cars like the Nissan LEAF and Chevy Volt? “The belief was that if it’s an EV, people will buy it,” one of the insider sources told me. “It almost became more of a religion than a business plan.”

Turning a Corner

I would be shocked if the company’s top-notch leadership—which has raised a whopping $320 million in private capital—is not preparing a major shift away from cars, and towards Coda Energy, its spin-off focusing on stationary grid storage systems. According to the sources, Coda will find it difficult to produce substantially more cars for a number of critical reasons, including strained relations with is Chinese partners.

The EV industry experienced a lot of growing pains in 2012—a year in which the best intentions of entrepreneurs wanting to move transportation off oil, and on to electricity, crashed head-on against a challenging marketplace. I don’t believe we’re entirely finished with frothy expectations, especially if EV startups fail to exhibit new levels of honest self-assessment.

Despite the difficulties facing newcomers like Coda, the overall plug-in car market continues to grow—with 2012 sales nearly three times the level from last year. This trend will continue, even with changes in the roster of automakers offering electric vehicles.

Comments

· · 2 years ago

I keep hoping the chinese poster here and on "Inside Ev's" will Save the Day with his 250 wh/ kg compact batteries. Hopefully they'll be cheaper also. That way Tesla model S's can have a reasonable 170 kwh, 800 mile contests, (500 miles for us mere mortals), and get rid of that puny 85kwh thingy.

· Spec (not verified) · 2 years ago

You can add Aptera and GreenVehicles to your bankrupt list. Fisker may join them eventually.

· Modern Marvel Fan (not verified) · 2 years ago

CODA failed to understand that auto market (regardless of whether it is EV or ICE) is extremely competitive. Today's EV NOT only have to compete against other EVs, it would also have to compete against other hybrid and ICE based cars. Those are "extremely" good and cheap these days, made possible by the large scale manufacturing and global competition.

To carve out an EV market for yourself, you either have to have "cutting edge" technology such as motors/battery or car manufacturing technology. CODA has neither.

Tesla is barely surviving NOT b/c its manufacturing capability (such as Toyota, Ford and VW), but b/c its design and innovation. It didn't just build another "EV". It simply build one of the BEST CAR on the road today (whether Tesla can survive on that sales alone is another matter).

I don't think CODA's executive understand what it takes to win in a competitive car market.

· Lad (not verified) · 2 years ago

Oh, for the want of a better battery,
But, these executives worked on flattery,
The car is a bust, turning to rust,
Because the need is strong lithium dust.

Yes, you can lighten the car, make it aerodynamic and reduce rolling friction; but, the current EV batteries are too heavy, too expensive and won't move the car far enough on a charge.

To paraphrase the prior Clinton Campaign's "It's The Economy, Stupid."..."It's The Battery, Stupid!"

· · 2 years ago

"It's not easy for a start-up company to compete with the established auto manufacturers" could win "understatement of the century" if such a contest existed.

· Iletric (not verified) · 2 years ago

We knew all along it was a piece of crap with a 100+mile battery. Why didn't the investors see it is beyond me.

· Spec (not verified) · 2 years ago

Something is bad with the Coda design . . . their efficiency is awful. Those are terrible watts/mile numbers. Either that or they are lying about the size of their battery.

· · 2 years ago

It's the aerodynamic drag that is the main problem. The Coda has vanilla styling and run-of-the-mill aero drag. The overall shape is too steep in the back, and the open wheels, flared fenders are problematic.

The Tesla Model S not only looks great, it has the lowest Cd of any car currently sold. When you are working with a fraction of the energy stored onboard (gasoline made car designers wicked lazy!) - and even with the high efficiency of the electric drivetrain; the chassis itself must be optimized for maximum efficiency. And that means primarily, low aerodynamic drag.

Neil

· · 2 years ago

Coda isn’t that bad though. It has a decent sedan car size, not a tiny winy thing. It has a good motor but the battery is short in range. The only way out for Coda is to equip the car with an AVL wankel range extender to make it a perfect plug-in EV with extra long EV range.
Perhaps Coda leaders wanted it a pure electric but the reality is that the car would be better, actually even very good, as a serial range extender plug-in electric.
Of course, the company also need to get rid of the abusive salaries and the likes and try to aim at a 30000 $ market price for a true success.

· Anonymous (not verified) · 2 years ago

The "razor sharp" board shouldn't have decided to let go of the lower ranks right before the Holidays in efforts to "streamline", eliminate multiple layers of over paid execs!

Aside from poor management, the product is WAAAY overpriced for the quality (or lack thereof) and most importantly, it has horrible crash ratings!!

· Nick F (not verified) · 2 years ago

Bill Howland,

The batteries Tesla uses are Panasonic NCR18650 cells. They pretty much are at the 250 wh/kg you talked about. I can't remember the exact number now off the top of my head. It might be more like 230 wh/kg.

They don't use all the batteries capacity so it has a longer life.

· A (not verified) · 2 years ago

Noticed that many comments here are simple not true and are not based on actual facts or experience with product or proper research.
Not sure how many of you actually drove Coda, it is a very comfortable car and has decent range - repeatedly over 120 miles with AC on and keeping up with traffic.
Also, the crash test ranking overall is 4stars and side protection and roll is 5 stars.

see:
http://www.safercar.gov/Vehicle+Shoppers/5-Star+Safety+Ratings/2011-Newe...

· · 1 year ago

@Nick F.

Ok thanks, I didnt know the weight of the big 85 kwh pack. Someone said its the same weight as the 40 kwh pack so that would imply 230 wh/kg i'd assume.

The Chinese dude here came and went. He was bragging about his new battery and wondered why PICars.com didn't cover it. So I started encouraging him to give details, prices, typical architectures, etc, any info he wanted to give. But when I started asking pricing info he just disappeared. He claimed he could make a battery twice the capacity of the Model S, so I naturally assumed 170 kw. When I asked details about this supposed battery, he disappeared.. But lets assume it is true for the moment:

He claims it can go 500,000 km. So thats 300,000 miles before a changeout. I wonder how you can do life-cycle estimation at this early stage.. And he said it was I think around 1/2 the price.

This started sounding almost like the perfect battery (i.e. too good to be true).

So too bad he kind of vanished.. Hopefully he'll be back if its not perfected yet.

· Marco Loglio (not verified) · 1 year ago

i hope that somebody in Coda automotive can read this comment. We really have the solution for their cars . With our battery pack a Coda EV can have a range over 600 km with one charge.
Everything has been already tested for long time and is perfectly real and guarantee.
My battery pack has an energy density over 3 times the one of the one they use now, means in the same space and weight i can give a triple energy.
All these data has been confirmed by major specialized magazine and world press with hundreds of articles like. It's easy to chek them out. So i wait for a mail by Mr Mac Heller

· Wayne Robinson (not verified) · 1 year ago

I own a 2011 Chevy Volt (since Dec 2010) and love it. A have driven the Nissan LEAF, Ford Focus Electric, and the Coda. I have only sat in the Teslas (Roadster and Model S) and the Fisker. The Volt is the smooth, quiet and refined - followed by the Focus, then LEAF. The Coda on the other hand was downright clunky. It felt old and slapped together in someone's garage. For instance, through the soft, long-travel, brake pedal I could clearly feel when the rengen engaged and then the friction brakes applied - neat, only in a science project kind of way! Addtionally, the simple suspension seemed to roll and exhibit delayed reactions due to the vehicle's heavy weight. It did work as an EV, but it felt like automotive regression instead of innovation. Anyway, Tesla is raming up, and more estabished brands are entering the EV market, so we should see some positive competitive progress ahead.

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