Electric car maker CODA files for bankruptcy

May 1, 2013 by Robert Jablon

Electric car maker CODA Holdings Inc. filed for bankruptcy protection Wednesday after selling just 100 cars and said it plans to quit the auto business altogether.

The Los Angeles-based parent of CODA Automotive filed for bankruptcy protection in federal court in Delaware. A consortium of debtors plans to acquire CODA for $25 million, according to a company statement.

The company's statement said it plans to concentrate on CODA Energy, an business founded two years ago, and exit the automotive business.

The 4-year-old company now has 40 workers. It furloughed around 50 but expects to call them back when the sale is completed.

CODA is the latest casualty in an electric vehicle market that has struggled to lure consumers who are skeptical of the short , high price, and a lack of infrastructure that can require recharging stops of several hours on long trips.

Last month, Anaheim-based Fisker Automotive Inc. confirmed it had laid off about three-fourths of its headquarters workers as it struggles with financial and production problems. Fisker, which makes the $100,000 Karma plug-in hybrid , missed a crucial production target for a half-billion-dollar public loan.

It has sold fewer than 2,000 Karmas, despite early projections of 11,000 sales per year, and it hasn't produced any cars since its battery supplier filed for last year.

Buoyed by hundreds of millions of dollars in backing, CODA moved from Santa Monica and opened its 100,000-square-foot (9,290-sq. meter) global headquarters in Los Angeles in the fall of 2011.

Last year, its plant in the Northern California town of Benicia began rolling out its five-passenger sedan. It had a single-charge range of up to 125 miles (200 kilometers). The car's battery, body and most other components were made in China and assembled in California.

The company had big plans, estimating it would sell 10,000 to 14,000 vehicles in its first 12 months. Instead, it sold around 100.

Its sticker price of $37,250—reduced to $27,250 with federal credits and state rebates for electric vehicles—coupled with a lengthy recharge time of six hours and humdrum styling failed to attract buyers.

However, CODA's troubles are simply growing pains for an embryonic technology, Phil Gott, senior director of IHS Automotive, an auto forecasting and advisory firm.

"In about a decade or so it'll be really ready for the consumer," he said.

Smart producers would concentrate on selling all-electric vehicles to fleet users, like governments or companies, Gott said. Fleet vehicles generally travel established routes and return to garages where they can be recharged overnight.

They don't need to worry about "interrupting the charge in the middle of the night to take the kid to the hospital," Gott said.

China is one of the hopefuls for fleet sales. BYD Co. Ltd., one of the largest manufacturers of rechargeable batteries, announced plans Wednesday to build electric buses and batteries at plants in California's Mojave Desert. BYD, which opened its North American headquarters in Los Angeles in 2010, says the plant will initially turn out 10 electric buses under contract for the city of Long Beach.

Explore further: Fisker to cut three-fourths of its work force (Update)

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Energy Dept. seizes $21M from electric car maker (Update)

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The Obama administration has seized $21 million from troubled automaker Fisker Automotive Inc. just weeks after the company laid off three-fourths of its workers amid continuing financial and production problems.

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1 / 5 (10) May 01, 2013
I am shocked...how can such a great concept possibly fail? Oh yeah, that's right, liberals are great at spending other peoples money, just not their own. Hypocrites.
1.5 / 5 (8) May 02, 2013
If their car wasn't butt ugly, they would have been far better off. No one wants a cheap looking car that looks like it was designed in China.
1.8 / 5 (5) May 02, 2013
ALL the car builder in the world are spending THEIR OWN MONEY on this "liberal" car concept! And somebody is starting earning from it.
5 / 5 (2) May 02, 2013
I am shocked...how can such a great concept possibly fail? Oh yeah, that's right, liberals are great at spending other peoples money, just not their own. Hypocrites.

Other people are great at wanting services and infrustructure for free.
3 / 5 (2) May 02, 2013
I am shocked...how can such a great concept possibly fail? Oh yeah, that's right, liberals are great at spending other peoples money, just not their own. Hypocrites.

It sounds like you have some ire to vent, but your comment doesn't make sense. Who in your view are the Liberals here? The owners of CODA Holdings? They're the ones spending the money.
4 / 5 (4) May 02, 2013
In the early days of automobiles carmakers folded by the dozens. Why would anyone expect it to be different this time around?
I agree with Phill Gotton this: Growing pains.
not rated yet May 05, 2013
One dominant auto manufacture experienced growing pains with the VOLT catching fire, and everyone overestimated demand. The difference with the larger players is their failure represents a small part of their overall business, and won't result in bankruptcy.

Also, traditional proof-of-concept demonstrations occurred at the race track to historically propelled every other form of auto technology, but no spectacular race events or all-electric dragster races were promoted to engage the public.

All electric cars should be introduced by men sitting on locomotive sized electric motors, running on 12k volt race-track rails, adjacent to a substation, so the media can broadcast accelerations from 0-500mph in 5 seconds, and other wild spectacles of this technology to woo the public.
1.8 / 5 (5) May 06, 2013
Roj, you're not informed at all.

1) "VOLT catch fire" only in oil addicted propaganda. ONE Volt prototype caught fire in the scrap yard where it was discarded AFTER A CRASH TEST!

2) I saw the first all-electric car race some 20 years ago.

3) Electric dragsters DO EXISTS, and do not need high tension rails or locomotive-size motors.
5 / 5 (2) May 06, 2013
Electric dragsters DO EXISTS, and do not need high tension rails or locomotive-size motors.

Yes. It's sort of funny when you go to youtube and see the electric dragsters wipe the floor with their gas powered competitors (google for "White Zombie" or "Killacycle")
5 / 5 (1) May 11, 2013
The Volt is awesome engineering. My opinion is it will succeed wildly when GM takes it's guts and makes it into an SUV, something the American family can love.

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