Coda Files for Bankruptcy, Saving Only the Battery Technology
Coda Holdings filed for bankruptcy in federal court in Delaware today and is getting out of the electric car business. It was a long time coming, and PluginCars.com has provided unique insights into Coda’s woes numerous times, including here and here.
It has been apparent for some time that Coda’s EV strategy couldn’t possibly succeed. As a reporter, the defining moment came for me when I sat in the company’s then-Santa Monica headquarters and heard its marketing guru (ex-GM) spin a tale extolling the wonders of Internet marketing. Or perhaps it was at a Los Angeles Auto Show press conference in 2010 at which founder and former figurehead Kevin Czinger, who’d abruptly quit the company, stood mutely while new chief executive Mac Heller explained that the Coda would be delayed at least six months.
Too Late, Too Expensive
When the car finally did squeak out with a California-only marketing plan, it was barely noticed. Only 100 were sold, and even those were recalled for bad airbags. The $37,250 car, with bland Chinese styling (think mid-80s Toyota) only slightly enlivened by a facelift, was simply too expensive and basic. It gave the few consumers who knew it even existed no reason to favor it over, say, a Nissan LEAF. The car wasn't awful, just not competitive.
The Coda’s chief claim to fame was a relatively long 125-mile cruising range made possible by its 36-kilowatt-hour battery pack. (The company also tried to use the presence of a trunk as a marketing hook. That rang hallow.) The battery technology may be, in fact, the only part of Coda that survives.
Just Batteries Now
Coda put an optimistic spin on the demise of its flagship sedan in a press release, describing the bankruptcy filing as voluntary and intended to allow the company “to execute its new business plan,” which C.E.O. Phil Murtaugh described as “focusing on the company’s energy storage business.”
Coda Energy was formed two years ago, capitalizing on the same lithium-ion battery technology (sourced in China) that is in the Coda car. In this case the batteries are stationary—among other applications, they’re for capturing and discharging the power generated by renewable sources such as wind and solar. “The company is currently shipping product, and has a robust pipeline of new customers and existing applications in the field,” said Coda.
Kevin Czinger, ex-Goldman Sachs (Heller, too), was one of the best talkers I ever met, so it’s not surprising the company was able to raise $300 million in equity from backers that included former U.S. Treasury Secretary Henry Paulson (another Goldman guy).
Czinger told me in 2010, “We offer American technology in a car with a real rear seat and full trunk space. One hundred percent of what we do is clean technology, and we can talk about that to put butts in seats. Coda is a unique brand.” In 2010, the car looked like it could get into the market early, but the delays meant that two years later it entered a crowded field as a distinct underdog.
Coda never secured the big prize it sought—a $334 million federal loan. The federal officials now watching their $529 million loan to Fisker Automotive go sour are probably seeing consolation in that at least they dodged this one bullet. In fact, when I saw the New York Times headline, “Electric Car Maker Files for Bankruptcy Protection,” I thought it was about Fisker.
Coda makes an interesting comparison to Atlanta-based Wheego, which also makes China-sourced electric cars. But Wheego is a distinctly low-key operation with few actual employees, turning out cars on an as-needed basis. It probably hasn't sold many more cars than Coda (Wheego isn't saying) but doesn't have anywhere near the same burn rate. Coda was always thinking big, as befits its Goldman Sachs origins.
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