“I saw a Coda a while back. On the street. That someone paid for. And was driving,” I said this morning to a colleague who works across the building. He’d never seen one outside of Motor Trend’s “Car of the Year” testing circuit last year.
Most people hadn’t. That could explain why today it filed for Chapter 11 bankruptcy after selling just 100 cars.
Coda is acquiring bankruptcy financing with Fortress Investment Group LLC for $25 million, parceling what assets it can sell off while maintaining its newly diversified–and apparently successful–operations in other areas, namely thermal management of batteries and energy storage applications.
“After concluding a comprehensive review of our strategic options, the Board of Directors, management team and senior lending group have concluded that focusing on the Company’s energy storage business presents the best opportunity moving forward,” said Phil Murtaugh, Chief Executive Officer, Coda Holdings, Inc., in a statement. “We believe the restructuring process that we have entered into today will enable the Company to complete a sale and confirm a Plan that maximizes the value of its assets, serving the best interests of our stakeholders.”
Coda emerged three years ago with a different strategy than rival EV startups, Tesla Motors and Fisker Automotive. It sought to leverage existing architecture of cars made and sold cheaply in China using proprietary EV technology. Its first car was based on the Chinese-market Hafei Saibao, itself based on a 1990s Mitsubishi Mirage in the U.S. The company had originally intended to sell it for $44,900, boasting a 125-mile range–40 more miles than a Nissan Leaf. But it very quickly dropped the car’s price to $37,250 when it went on sale. Perhaps Coda saw the writing on the wall before it even started.
Criticisms against the Coda grew quickly between its bland styling, high price, lackluster driving dynamics, and two-star front crash-safety rating–the only vehicle on sale in 2012 with such a mediocre score. Perhaps the only real surprise of this whole ordeal is that an automaker thought it could sell this lousy car, no matter how good its technology may be.
Sources: Coda, Reuters