Maker of All-Electric Sedan Charges Into China

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Coda Automotive Inc.’s latest deal, an agreement to supply technology to a Chinese auto maker, is the first major example of one part of its strategy to get a big charge out of its lithium batteries.

The local electric-car company last week signed a letter of intent to supply its advanced battery and drive train to Baoding vehicle manufacturer Great Wall Motor Co. in a joint venture to produce electric vehicles for sale in China, Europe and eventually in the U.S.

“This is a big deal for us, with one of the top 10 Chinese auto manufacturers, that allows us to expand our portfolio beyond our own initial vehicle,” said Coda Chief Executive Philip Murtaugh.

The Chinese agreement is a key part of Coda’s three-pronged strategy: bringing its own electric car to market, supplying the battery pack and drive train to other companies, and selling the batteries to other industries that can use them for power storage. Until now, the company has been getting the most attention for its own electric vehicle.

The deal’s timing is significant because it comes just as Coda is entering a make-or-break period with its first vehicle, an all-electric sedan.

In two weeks, Coda is set to open its first showroom for its electric sedan vehicle at the Westfield Century City mall. By the end of the year, the company expects to deliver its first vehicles to customers on its waiting list.

The sedan was first supposed to go on sale late last year. The company encountered funding delays and went through a top management overhaul since then: Kevin Czinger stepped down and veteran auto industry executive Murtaugh replaced him. As a result, some in the industry are wary about Coda’s ability to deliver a quality, affordable electric car.

“Consumers now are skeptical about electric vehicles in the first place,” said Mike Omotoso, senior manager of global power train for J.D. Power and Associates, the Westlake Village-based market research and ratings company. “Coda is a relatively unknown company. … it’s going to be a real tough market for them.”

Right now, the only pure electric vehicles on the market are Nissan Motor Corp.’s Leaf and Tesla Motors Inc.’s Roadster. General Motors Corp. also is selling its Chevrolet Volt, a plug-in hybrid gas-electric vehicle, and Toyota Motor Corp. has come out with a plug-in version of its popular Prius hybrid.

But in the next six months, Ford Motor Co., Mitsubishi Motors North America, Fisker Automotive Inc., Chinese auto maker BYD and several other companies are expected to bring electric vehicles to market. Ford is due out with its all-electric Focus in December, around the same time Coda’s sedan is scheduled for delivery.

Murtaugh said he’s confident that Coda’s sedan will do well among this increasingly crowded field. Coda is counting on the company’s battery technology, which gives its car a range of up to 150 miles between charges.

“We have the best electric propulsion system in the industry and the most dependable range,” he said.

Headquarters move

This week, Coda employees are moving from Santa Monica into their new corporate headquarters on Fairfax Avenue, just north of the Santa Monica (10) Freeway.

L.A. city officials in June gave Coda an incentive package worth an estimated $832,000 to lure the company from Santa Monica. The money, which comes from the city’s general fund, has been used to upgrade the electrical connections and assist in other improvements in the building.

Meanwhile, the company’s planned electric battery plant in Ohio remains on hold as the company’s application for a $560 million federal loan is one of many that have stalled in the process.

If the low-interest loan gets approved, within a year, Coda would start shifting production of its lithium iron-phosphate battery system from China to Ohio, gradually ramping up production. Once fully operational, the plant would employ more than 1,000 people.

The plant would produce batteries for Coda’s electric vehicles, for vehicles it jointly produces with Great Wall and other car makers, and for power storage for other industries.

If the loan is ultimately denied, Murtaugh said Coda would keep its battery production in China, where the body of the company’s electric sedan is already being made.

In the meantime, Coda executives are finishing the company’s showroom at the Westfield Century City shopping mall. The showroom was initially set to open in July, but some minor construction delays, due in part to a need to procure eco-friendly building materials, pushed the opening date back about six weeks.

The 850-square-foot showroom will feature a model of the electric sedan with a portion cut away so visitors can view the inner workings. An actual sedan will be on display in front of the showroom.

Coda has also secured several spaces in the parking garage immediately beneath the store and installed electric charging stations there. Customers will be able to take a sedan for a test drive around nearby streets.

“Once they see and test drive the vehicle, we believe customers will see how well it performs,” Murtaugh said. “That will help us stand apart from the rest.”

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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