# What the Electric Coda Sedan Says About the Future of EVs and China

The electric Coda Automotive sedan, unveiled yesterday as the first highway-capable model from low-speed electric vehicle startup Miles EV’s new spinoff, isn’t just “made in China.” Companies based in China, including Hafei Motor and Lishen, have been working with Santa Monica, Calif.-based Miles throughout the development of the car, which is set to carry a $45,000 price tag when it rolls out next year in California. Does Coda’s model — building an electric car in China for U.S. consumers — represent the next phase for plug-in cars as automakers race to make them affordable for the mass market? Coda may not be the company that takes us there, but if automakers can surpass a few hurdles along the way, we may see more plug-in car companies looking to cut costs with ideas from Coda’s playbook. Coda is leveraging what McKinsey Quarterly described last month as China’s “low-cost labor supply, its fast-growing vehicle market, its success in rechargeable-battery technology, and its substantial investments (both made and committed) in R&D for electrified transport.” We’ve written before about China’s role on the road to an affordable EV, and the potential for sales there (highest in the world last quarter) to help electric car makers achieve economies of scale. But as we noted earlier this year, such a scenario includes a catch: costs have to come down (and the savings passed on to customers) before electric cars can get anywhere close to becoming mainstream in China. And in the meantime, sales in the once-hot Chinese car market have slowed along with the global auto industry, although not as much as those in the U.S. and Europe, as the Wall Street Journal writes today. In an effort to avoid the price pitfall, Coda is capitalizing on EV-friendly policies in California (where Coda plans to debut) and the larger budgets of U.S. consumers. But the company still faces the challenge of appeasing customer’s lingering safety concerns, since cars built in China have historically fared poorly in safety tests (Coda CEO Kevin Czinger said in a call with reporters yesterday that the company expects its sedan to get at least four stars in the five-star U.S. safety rating). Even with the large U.S.-based automakers struggling, companies like General Motors (s GM) could end up helping out companies like Coda with that image problem of Chinese cars having safety issues. As the Associated Press noted recently, GM’s move to export more China-built cars to the U.S. market — more than 51,000 vehicles in 2014, up from the 17,335 vehicles planned for export in 2011 — could open doors to the global market for China’s domestic automakers, such as Chery and BYD Auto. And it could do the same for Coda. But Coda is also being undercut by those Chinese automakers. BYD is aiming to launch a plug-in hybrid vehicle with a sticker price of just$16,000, just over a third of the cost of the all-electric Coda sedan — which at this point is slated to go for the same price as GM’s plug-in hybrid Chevy Volt. So Coda hasn’t mapped out a sure route to success on the mass market yet, but it may be a sign of where the industry’s heading.