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.