Electric car maker Coda files for bankruptcy, will go up for sale
Coda Automotive Inc., the Los Angeles-based electric-car maker backed by billionaire Philip Falcone, has filed for bankruptcy and will put itself up for sale.
Coda listed assets of no more than $50 million and liabilities of up to $100 million in the Chapter 11 filing in Delaware.
The automaker had been almost deathly quiet about sales of its $37,250 car, which had been on the market since March of 2012.
Those sales finally got some transparency from an unusual source - -federal safety regulators -- last August.
Coda appeared to have delivered just 78 vehicles at most, according to a recall notice issued by the National Highway Traffic Safety Administration.
The recall was for side curtain air bags that were not installed properly and might not deploy in an accident.
The Coda, which had a claimed range of 90 to 120 miles, was initially pitched as an all American car, but it was mostly made in China.
Its bankruptcy comes at a time when other companies are having more success with all electric and plug-in hybrid cars.
Tesla is expect to announce in its upcoming quarterly earnings report this month it sold 4,750 of its all electric Model S sedans, which start at about $70,000.
That compared to the Chevy Volt’s first-quarter sales of 4,244, which was an 8% increase for the plug-in hybrid compared with the same quarter in 2012, according to Autodata figures.
Nissan saw sales of its all electric car, the Leaf, double in the first quarter, to 3,359, compared to the same period a year earlier. The Leaf this year has an improved range and a lower sticker price.
In addition to that kind of competition, one expert says, Coda was trying to sell its cars at a time when automakers were rolling out several less expensive, conventionally powered gasoline and diesel cars that were capable of 30 miles per gallon or more.
“Even General Motors and Nissan are still having some difficulty in finding acceptance of electric cars and plug-in hybrids with the public,” said Bruce Bullock, executive director of the Maguire Energy Institute at Southern Methodist University.
“Layer on top of that, in Coda, the fact that you had a brand that was much less recognized and far less trusted and you would have significant concerns about their ability to survive,” Bullock added.
Coda was not the only company struggling to sell an alternative car. Fisker Automotive recently failed to make a federal loan payment and hasn’t sold one of its hybrid sports cars in nearly a year.
In a statement on its website, CODA Holdings Inc. said it was focusing its business strategy “on the growing energy storage market.”
The statement added it hoped to complete the sale within 45 days.
“The board of directors, management team and senior lending group have concluded that focusing on the company’s energy storage business presents the best opportunity moving forward,” said Phil Murtaugh, chief executive officer of CODA Holdings Inc.
A consortium led by Fortress Investment Group has provided funding to enable Coda’s energy storage business to remain functional during the restructuring, according to CODA Holdings Inc.
Fortress has also filed a $25 million bid to acquire the company, CODA Holdings Inc. said.