Coda Automotive, a Santa Monica, Calif.-based green car startup, plans to start selling electric vehicles in California assembled largely from China-built parts by year’s end. And according to Coda Chief Financial Officer Dan Mosher, who spoke with us on the sidelines of the Berkeley-Stanford Cleantech Conference in San Francisco on Wednesday, the company will be able to “generate profit from Day 1″ on those vehicles.
The crux of Coda’s pitch from its launch (as a spin-off from Miles Electric Vehicles last year) has been that it will offer a basic electric sedan at an affordable price. But that price — somewhere around $35,000 after incentives – has recently been undercut by Nissan, which says it will make a profit on day one from selling its LEAF electric sedan for about $33,000 before incentives. Meanwhile, BYD, the China-based battery giant and green car developer backed by Warren Buffett, is racing to launch its first vehicle on the U.S. market later this year.
But Mosher says neither of those companies present much of a threat as the Coda Sedan rolls out. He said Coda has experienced first hand that entering the U.S. market means jumping through lengthy regulatory processes. Of course, as Coda has also seen first hand, it also means facing skepticism in the U.S. about the safety of cars built in China, which have historically fared poorly in safety tests.
Nearly a year ago, Coda CEO Kevin Czinger said the company’s inaugural model had passed more than half of the required crash and safety tests. Today Mosher said Coda has been involved in the safety testing process for the last three years, while BYD has yet to begin safety testing for the U.S. market.
Even at volumes as low as 600-700 vehicles per month, Mosher said Coda will have a sustainable business (the company has previously said it plans to produce just under 2,700 vehicles in 2010, ramping up to a max of 20,000 in 2011). Coda plans to use online social networks to help attract buyers. Coda will be “reaching out to people, bringing them in to dealerships,” via tools like Twitter, said Mosher.
General Motors, Nissan and other automakers have been using similar strategies to sign up early adopters for models like the upcoming Chevy Volt and LEAF. But Mosher said big automakers, by and large, “don’t know how to do that.”
Perhaps more importantly, Mosher said Coda hopes to gain an edge by being an “honest broker.” He sees other automakers “being pretty aggressive” when it comes to the amount of electric range they’re promising, and risking their reputations in the process. In particular, Mosher said “customers might be disappointed” if they think they’ll be able to drive the advertised 100 miles on a fully charged Nissan LEAF battery. Coda, for comparison, is promising 90-130 miles of electric range depending on driving behavior.
The LEAF has a smaller battery than the Coda Sedan, Mosher noted — 24 kWh compared to 34 kWh. That’s a key factor in the price difference between the two models, he said, but it could also affect the range.
Nissan’s Mark Perry, on the other hand, told us at our Green:Net event last week (check out this video interview) that the automaker has been able to keep costs down for the LEAF largely because of its history developing and investing in battery technology. Mosher said he’s not convinced those development costs have been factored into the company’s claim that it will be able to sell the LEAF at a profit from the get-go.
Coda is looking to expand beyond car making to supply battery technology. Mosher said on a panel Wednesday that Coda has been spending a “majority of time” working (with joint venture partner Lishen) on the design, engineering, and pack assembly for the battery system. Eventually, Mosher told us the startup aims to sell batteries for grid storage and for cars from major automakers.
That’s part of the grand vision Coda described for its joint venture with Lishen when the pair agreed earlier this year to invest $100 million in their venture. But despite its behemoth partner, Coda has just begun to get its feet wet in this market. Mosher told us Coda has begun early stage talks with China-based automakers and multiple U.S. utilities. As a first step, the startup is hoping to set up a pilot program with a utility to test its batteries for grid storage.
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