Do I Smell a Future Bailout?
Coda Automotive is very ambitious: It plans to launch a $45,000 (before the $7,500 tax credit) Chinese-built electric sedan next year and claims that it will be the most affordable electric car at the time. But to get there it needs cash, which is why it just raised $24 million in a series B round of financing, with one of the main investors being the (in)famous former treasury secretary Henry "Hank" Paulson. Mr. Paulson also joined Coda's advisory board. Aside from his cash, what will he contribute to the company?
Paulson's Chinese Connections
Coda, which is based in Santa Monica, California, says that Paulson's main contribution will be his business and political experience dealing with China. Indeed, if Coda is to succeed, it will need to work smoothly with its Chinese partners. Paulson said: "Coda's non-capital intensive business model and globally collaborative partnership strategy persuaded me to join the advisory board. Coda Automotive's approach will enable them to release the Coda electric sedan next year."
Let's hope he's right.
Raising Money Certainly is a Good Sign
About the fundraising, which also includes money from Farallon Capital Founder Thomas Steyer and President Clinton's former Chief of Staff Thomas McLarty, Coda said:
"Coda's ability to raise capital under challenging market conditions and the caliber of our investors attest to the strength of our business model and the opportunity that exists in the electric car and battery sectors," said Kevin Czinger, president and CEO, Coda Automotive. "Avoiding the problems that plague large manufacturers, we've developed a flexible structure that allows us to move rapidly to market and be profitable even while selling a relatively small number of vehicles per month. Consequently, we're on-track to deliver the first quality, accessible all-electric sedan to consumers next year."
Competing Electric Cars
It's good to see that not all makers of electric vehicles are facing bankruptcy. But I have some doubts about Coda's appeal considering its competition. The Tesla Model S (if the price doesn't change) won't be much more expensive, and the Chevy Volt should be less expensive.
Maybe if Coda changes the design of the car during the next year I could be competitive, because as it is, it's definitely not very nice-looking.
Via Coda Automotive, Earth2Tech, Green Car Congress
More Electric Cars
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Ontario to Offer up to $10,000 in Incentives for Plug-In Hybrids and Battery Electric Cars
VW Announces Electric Car for 2013, Warns Against "Electro-Hype"