GigaOM » Coda Automotive

Another WARN class action suit for cleantech, this time for Coda Automotive

Katie Fehrenbacher — Wed, 01 May 2013 22:17:41 +0000

A former employee of electric car company Coda Automotive has filed a class action lawsuit alleging that the automaker conducted mass layoffs in December 2012 without giving workers 60 days notice. The lawsuit is the second alleged WARN Act violation filed against an electric car startup this year, following a lawsuit against Fisker Automotive last month, and is the third high profile alleged violation against a cleantech company, following Solyndra’s lawsuit in late 2011.

In the suit against Coda Automotive, former employee Tony Bulchack says that Coda laid off 125 employees around December 14, 2012. The complaint says that these workers weren’t given 60 days notice of the planned layoffs in writing. Now that Coda has filed for bankruptcy, the suit was filed in the bankruptcy court.

I’ve embedded the complain below:

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Electric car maker Coda files for bankruptcy

Katie Fehrenbacher — Wed, 01 May 2013 15:14:08 +0000

Electric car maker Coda Automotive said on Wednesday that it has filed for Chapter 11 bankruptcy in the District of Delaware and will seek to restructure the company around selling batteries instead of electric cars. Coda plans to seek a sale of the business within the next 45 days.

Coda said that an affiliate of Fortress Investment Group will provide enough financing to keep its energy storage business operating and will also act as the stalking horse bidder in the sale process. Coda CEO Phil Murtaugh said in a statement that:

“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.”

Bloomberg reported that Coda listed assets of as much as $50 million and debt of as much as $100 million in the Chapter 11 filing. The company raised $320 million over the years from investors including Aeris Capital, Angeleno Group, New World Strategic Investment, Indus Capital and Och-Ziff Capital Management Group, Falcone’s Harbinger Capital Partners and Riverstone Holdings.

Coda shipped its first electric sedans in the spring of 2012, after many months of delays. Coda first aimed to launch the car back in late 2010, but then pushed that back to late 2011, and then early 2012. It’s not an uncommon story for an electric car startup. Fisker Automotive also took much longer than it had expected to deliver the first Karmas, and Tesla also faced delays over its first car the Roadster.

But sales of the Coda electric sedan never took off, and the company reportedly shipped less than 100 cars. The car cost $37,000 before the $7,500 U.S. tax credit, and had an official 88 mile range (the distance its batteries can go on a single charge) with a fuel mileage equivalent of 73 miles per gallon. Critics said the car’s design was dated, and the price too high to compete effectively with the Nissan LEAF.

Coda launched its energy storage business last year and through that unit has been selling batteries and battery management systems to act as energy storage for the power grid. Coda’s battery technology is based around lithium iron phosphate batteries, and a good chunk of its intellectual property is around the cooling management system and software. The batteries are similar to the ones that it was using in its cars, and the main difference is that while the car batteries are flat, the grid batteries are organized in a tower, and 25 batteries grouped together creates 1 MWh worth of storage.

As I reported yesterday, Coda was starting to be buried in lawsuits. The company had a half dozen filed as of yesterday, including suits over unpaid bills and a class action lawsuit by a former employee.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Chinese companies slowly collecting discounted U.S. electric car assets

Katie Fehrenbacher — Tue, 19 Feb 2013 17:01:54 +0000

Electric car startup Fisker Automotive is reportedly weighing investment and acquisition offers from Chinese auto tech companies. Bloomberg reports that there’s a $350 million offer for 85 percent of the company from Chinese state-owned car maker Dongfeng Motor Corp, and Reuters reports that China’s Zhejiang Geely Holding Group (which owns Volvo) has another offer for a majority stake with a deal between $200 million and $300 million.

If Fisker is able to close on either of these deals, it could move its business to China and gain the funds to start manufacturing its second car the Atlantic, as well as start paying back its loan to the Department of Energy. Fisker has been looking for suitors — partners and acquirers — for months, as it wrapped up a year with an incredible amount of problems.

But $350 million for 85 percent stake is a major discount on the original valuation of Fisker. The company has raised a billion dollars in funding, and at one point back in 2011 had raised money at a reported valuation of $2.2 billion. But in 2012, the company struggled heavily and I had heard that it was looking to raise money last year at a significantly lower valuation. Clearly, when discussions are for majority stake deals for between $200 million and $300 million, there’s been massive discounting.

Fisker isn’t the only energy tech company that’s looking to sell for a discount to Chinese conglomerates. Lithium ion battery maker — which sold batteries for Fisker’s electric car — went bankrupt and its assets are being sold off to Chinese auto tech giant Wanxiang for $256.6 million. A123 Systems held the largest IPO in 2009, raising some $371 million, and went public at $20 per share. A123 also raised more than $350 million from private investors when it was still a startup.

Wanxiang has also invested in struggling electric car company Smith Electric Vehicles. Battery maker Boston Power also turned to Chinese investors to take its electric car battery business to the next level, as did Protean Electric. Electric car company Coda Automotive — which is also struggling — has a joint venture with China battery maker Lishen and a deal with auto maker Great Wall Motors Company.

Chinese companies and the Chinese government are very interested in amassing next-gen technology for electric cars. China is projected to be the largest electric car maker and market in the world, and is already the world’s largest auto market.

It’s not just electric car assets that Chinese companies want. Wanxiang invested $420 million into GreatPoint Energy, a company based in Cambridge, Mass. that converts coal into cleaner-burning natural gas. And Chinese power company Hanergy acquired the assets of Miasole for $30 million (Miasole had raised hundreds of millions of dollars from private investors).

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Electric car startup Coda quietly dealing with lawsuits over unpaid bills

Katie Fehrenbacher — Thu, 31 Jan 2013 22:00:48 +0000

Court records show that startup Coda Automative, already wrestling with layoffs and very slow sales of its first electric car, has been fending off a number of lawsuits for not paying its bills on time. Vendors, including car engineering and development company RLE International (as well as an affiliate contract work company RTECH), vehicle development services company EDAG, and vehicle testing company FEV, have all filed lawsuits against Coda within the last six or so months, alleging that Coda owes them money for services.

When RLE filed its lawsuit in late October it said Coda owed RLE $356,500; when EDAG filed its lawsuit last June it said Coda owed them $608,770; and when FEV filed its lawsuit in December it said Coda owed them $268,200. RTECH, an affiliate of RLE, also has a lawsuit against Coda for failing to pay for contract workers, which it filed December 2012.

The parties agreed to dismiss three of the cases. In the RTECH lawsuit, the dismissal occurred after Coda filed papers stating that the contract in question forced RTECH to resolve the issue through arbitration. It’s possible this is why the other two cases settled. The FEV case is ongoing.

While Coda lawyers seem to be dealing with these suits, it’s the latest bad sign for the electric car maker, which in December laid off staff. While press reports at the time said the layoffs were massive, Coda tried to soften the blow and said it had laid off 50 employees, or 15 percent of staff.

The problem is that the company hasn’t been selling its cars. Some reports have put the number of Coda sedans sold at less than 100 since it went on sale in March 2012. That launch was actually delayed, from late 2010, then to late 2011, and then early 2012. The company also had a recall of the cars it had sold in August due to a mis-installed side curtain air bag.

The car itself isn’t that competitive in a market where you can buy a Tesla Model S, a Nissan LEAF or a Chevy Volt. As auto reporter Jim Motavelli described it:

The strategy of buying a bargain Chinese car sounded good at the time, but it’s plain that making the Coda competitive was a Herculean task, despite a larger battery, battery management and more range than the Nissan Leaf. One big problem is that Chinese styling is 20 to 30 years behind the West, and attempts to dress up the Coda didn’t do much to disguise the 1985 Toyota Corolla design. The car looks dated.

We’ll see what happens to Coda. Fisker Automotive, another struggling electric car startup, is heads down trying to sell itself to Chinese auto companies. Coda already has deep partnerships with Chinese firms — the company has a joint venture with China battery maker Lishen, called Lio (oil spelled backward), and a deal with auto maker Great Wall Motors Company to co-develop a low cost electric car. Given these relationships Coda probably has a better chance than others to find a Chinese acquirer.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Electric car startup Coda laying off 50

Katie Fehrenbacher — Tue, 11 Dec 2012 23:43:33 +0000

Following struggles by Better Place, Fisker Automotive and the bankrupt A123 Systems, electric car startup Coda Automotive has laid off 50 workers, according to PluginCars. The car company has reportedly had really slow sales, and recently received a low score for its frontal crash test.

A Coda spokesperson said that 50 employees was 15 percent of the workforce. The company’s first electric sedan to market was delayed by years, and the car maker officially launched its sales in the Spring of 2012. But even after launch, the company had to recall 78 of its cars for faulty parts.

Coda has been directly competing with the LEAF in terms of price, all-electric features and the fact that both cars are pretty basic. Nissan’s LEAF has an official electric range of 73 miles and a 99 MPGe, and costs $35,200 (without subsidies). The Coda sedan has a base cost of $37,900 down from $44,900 (before any state and federal subsidies).

Coda has a joint venture with China battery maker Lishen, called Lio (oil spelled backward), and is in the process of raising $150 million in funding to help get these inaugural cars to the first customers in California. Other investors in Coda include Aeris Capital and Singapore-based EDB Investments.

This is a bad few weeks for electric car companies. Electric car charging infrastructure company Better Place delivered massive layoffs, electric car company Fisker Automotive is searching for a partner to help it get its Atlantic built, and battery maker A123 Systems was sold off in bankruptcy court to Chinese auto giant Wanxiang.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Coda recalls 78 electric sedans

Katie Fehrenbacher — Mon, 27 Aug 2012 16:14:57 +0000

Electric car startup Coda Automotive says it has recalled 78 of its electric sedans because the car’s side curtain airbags may be mis-installed and may not go off in the event of an accident. It’s actually a pretty common occurrence for electric car startups to issue these types of recalls in the early days of production — Fisker has had a variety of these recalls, and Tesla had them back in the day for its first electric sports car the Roadster.

Cars have a lot of moving parts, and car companies have to rely on their suppliers to make sure the parts supplied are not faulty. Fisker has recalled batteries from A123 Systems, and a faulty cooling fan from a partner. When a company is working with third parties to assemble the cars, then that adds another element of risk.

After a lot of delays, Coda officially drove its electric sedan off the assembly line at its plant in the Northern California city of Benicia, California, back in March, saying that the move was the start of its customer sales. Coda’s sedan has an official EPA rating for an 88-mile range (the distance its batteries can go on a single charge), and fuel mileage of 73 miles per gallon equivalent (77 in the city and 68 on the highway).

The Coda sedan has a base cost of $37,900 down from a previous price of $44,900 (before any state and federal subsidies). Coda also boosted the battery warranty on its car to 10 years (up from 8 years) or 100,000 miles late last year.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

The future for electric car startup tech is in China

Katie Fehrenbacher — Tue, 10 Jul 2012 18:23:21 +0000

Money from Chinese investors, conglomerates, cities and the government, continues to drive a significant amount of the future of next-generation technology for electric cars. On Tuesday a company called Protean Electric, which makes an electric vehicle drive system, announced that it has raised a whopping $84 million round from GSR Ventures, a VC firm based in Beijing and Silicon Valley, New Times Group, a Liyang, China-based industrial group, and the city of Liyang. The funds will go toward building a factory for Protean Electric’s drive systems in Liyang.

China is already the world’s largest auto market, so it’s not that surprising that it would lead on electric vehicle technology development, too. As the Financial Times once put it: “The Middle Kingdom is increasingly claiming its place as the centre of gravity of the automotive world.”. . . “This is a 30m market by 2020 – it will be the dominant market in the world.”

Protean’s technology is an electric motor that is housed within a vehicle’s wheel and can be used for hybrid, plug-in hybrid and electric cars. Protean says the motor system reduces complexity, adds torque and increases power.

Chinese investors, and city governments, have been very aggressive when it comes to offering auto technology and battery companies incentives, and easy access to capital, if they manufacture in China. Particularly startups that haven’t been able to raise funds from investors or the government in the U.S., are eager to make these deals. Here’s examples of some of these:

Battery maker Boston Power lined up $125 million in funding from Chinese investors and the government to shift a big part of its business to China and thin its operation in the U.S. by about 35 percent. Boston Power makes lithium ion batteries that it plans to sell for the electric vehicle market.
Electric car company, Coda Automotive, created a joint venture with Chinese battery maker, Lishen, in 2010 and is backed by Chinese investors. Coda also recently announced a deal with auto maker Great Wall Motors Company to co-develop a low cost electric car to sell in the U.S., China and Europe.
San Diego-based battery company PowerGenix spent the past year hunting for a partner in China and created a joint venture with China City Construction Corp. to produce its batteries for the so-called microhybrid vehicles. PowerGenix already had a research facility with a small production line in the southern Chinese city of Shenzhen.
Smith Electric Vehicles early this year announced a $25 million equity investment from the Wanxiang Group, and a letter of intent for a $75 million investment in a JV between Smith and Wanxiang to make electric school buses and commercial vehicles.
Electric motorcycle maker Brammo says it’s scored a deal to supply the Hong Kong government and police force with its electric motorcycles. Brammo says the Hong Kong government will replace its existing gas-powered motorcycle fleet with Brammo’s Enertia.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Electric vehicle outlook: 2012–2017

Tue, 03 Jul 2012 17:06:18 +0000

In the future, plug-in electric vehicles (PEVs) will be offered in a variety of vehicle segments, with the vast majority on the road being small cars. Overall, between 2012 and 2017, more than 900,000 light-duty PEVs will be sold in the United States. This report predicts the growth and diversity of the electric vehicle (EV) market over the next five years. In addition to forecasting the market and its different segments, the report also examines car-sharing programs like Car2Go and smart transportation systems that, along with EVs, promise to change the nature of transportation in the 21st century.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Electric car maker Bright Automotive to shut down

Katie Fehrenbacher — Wed, 29 Feb 2012 04:10:48 +0000

Another electric car startup, which waited years for a Department of Energy loan, plans to call it quits. According to local media in Indiana (and Green Car Reports) Bright Automotive, which was a spinoff from the not-for-profit think tank Rocky Mountain Institute, and which had been developing a plug-in hybrid car called the IDEA for commercial fleets, plans to close shop.

Despite that Bright Automotive was the first official investment from General Motor’s venture arm, the company had been developing its business around getting a DOE advanced technology vehicle manufacturing loan of $450 million. According to a letter sent to the media, Bright Automotive slams the DOE for leading it down a road where it spent three years and $15 million on pursuing a loan that never was delivered.

Bright Automotive isn’t the only electric automaker that felt confident it had a DOE loan in the bag, yet ultimately never got that loan. In December, electric car startup Aptera also announced that it would shut down after failing to bring in private investment, which was one of the final criteria to secure a DOE loan. Electric car company Coda Automotive had also long said it was waiting for a DOE loan, but has yet to receive one. Norwegian car company Think Automotive also was hoping for a loan to build electric cars in Indiana, but never received it, and went bankrupt last year.

Fisker Automotive did receive a DOE loan award, but after drawing down on part of the loan, was then unable to secure the rest after facing delays for its inaugural car. Battery suppliers to these electric car companies have also struggled as a result of the EV makers struggling — Ener1 went bankrupt after Think went bankrupt and A123 Systems’ stock has dropped dramatically after Fisker’s problems were revealed.

Bright Automotive execs said in a letter published by various outlets that: “Last week, we received the fourth ‘near final’ Conditional Commitment Letter since September 2010. Each new letter arrived with more onerous terms than the last. . . .The first three were workable for us, but the last was so outlandish that the most rational and objective persons would likely conclude that your team was negotiating in bad faith.”

Other companies and investors have pointed out the difficult terms of the DOE loans before, including Solyndra investors (after the company went bankrupt) and Beacon Power (after that company suspended operations and was sold to a private equity firm). The DOE seemingly became far stricter in its terms after the solar company Solyndra went bankrupt, taking with it an over $500 million loan.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Coda is raising another $150M, soon to ship electric cars

Katie Fehrenbacher — Wed, 15 Feb 2012 19:00:37 +0000

Coda sedan

Electric car company Coda Automotive is raising more funds as it moves closer to shipping its first electric sedans. According to a filing, the company is looking to raise another $150 million, and has closed $21.5 million of that — the financing is in addition to the $150 million round announced in September 2011.

Coda’s delayed electric sedan is supposed to begin shipping this month, and a Coda spokesperson tells me that the cars are in the “final assembly stage,” and are expected “to start shipping shortly. The cars are a bit behind schedule, and also were delayed by almost a year in late 2010.

A Coda spokesperson says the company will use this funding for “ongoing business activities and expanding business opportunities, including energy storage, new vehicles and other company activities.” Last month Coda launched an energy storage division, which plans to sell batteries to utilities and power producers. The company has raised $322 million to date.

Here’s 10 things you should know about Coda.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.