A partnership between a Los Angeles-based electric car startup and a growing Chinese auto maker intends to produce “the most affordable EV on the market.” On Tuesday Coda Holdings announced that it has a new 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.
Coda says it will provide the propulsion technology, including the battery systems, for the electric car, while Great Wall Motors will likely provide the car chassis and other systems. The cars will be assembled in both China and the U.S. The deal is not a joint venture and does not involve an equity stake, said Coda.
Coda CEO Phil Murtaugh said on a call with reporters that the low cost electric car won’t be launched until the second quarter of 2014, and more details of the car will be provided in the next six to nine months. Coda didn’t say how much the EV would cost.
Coda early days
To put this announcement in perspective, Coda, a spin-out from electric car startup Miles Electric, only just started shipping its inaugural electric sedans in March of this year, and Murtaugh said that sales volumes of that first car are still “low.” Murtaugh wouldn’t give more specific figures. Coda delayed the launch of that car by over a year and “soft-launched” it recently.
Coda also just recently launched a stationary energy storage business — using its battery packs to store energy for the power grid — and is in the very early stages of that business, too. So basically, Coda is not yet bringing in much revenue to run its business, and already it’s got a new deal in the works to develop a second electric car.
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 company already has a joint venture with China battery maker Lishen, called Lio (oil spelled backward), and Lio owns the IP for the battery cell production, but Coda has retained the rights to the advanced thermal dynamics and battery management system.
Coda raised close to $150 million in funding back in September, including raising money from Chinese investors New World Strategic Investment Limited, and Indus Capital. Coda and Lishen also agreed to invest $100 million into the venture alongside a commitment for a $294 million line of credit from the Bank of Tianjin Joint-Stock Co. Coda says it is no longer pursuing a Department of Energy loan.
Chinese auto market
Great Wall Motors Company is a public company on the Hong Kong Stock Exchange and sold 500,000 traditional internal combustion cars in 2011. Murtaugh said Great Wall Motors doesn’t yet sell electric cars and Coda says Great Wall Motors is the fastest growing and most profitable Chinese auto original equipment manufacturer.
China is the world’s largest auto market, and all of the car companies launched their latest models at the Beijing Auto Show this week. As the Financial Times 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.”
That’s one reason it could be the quintessential market for electric cars. The other reason China could dominate EVs is that the Chinese government can take the top-down approach, like mandating electric cars for government and service workers, and banning internal combustion two-wheelers. China is the largest market for electric scooters and motorcycles. Murtaugh said that the “Chinese market will overwhelm all other EV markets in the world.”