Coda Abandons Plan To Build Its Battery Cells In U.S.

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2012 Coda Sedans on assembly line, Benicia, California, March 2012

2012 Coda Sedans on assembly line, Benicia, California, March 2012

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We breathed a sigh of relief when Coda announced it had started production of its electric Sedan earlier this month.

Then, we positively jumped for joy when little over a week later, the first customers started taking delivery of their new 2012 Coda Sedans. It had certainly been a long time coming.

However, good news rarely lasts, and now the Columbus Dispatch reports (via Green Car Congress) that Coda Automotive has dropped its plans to build a lithium-ion battery fabrication plant in Columbus, Ohio.

The abandoned plans are due to the delay Coda has experienced in receiving definitive responses from the U.S. Department of Energy on its application for a $500 million low-interest loan guarantee under the advanced technology vehicle manufacturing program.

That program previously granted loan guarantees to Ford, Nissan, and Tesla in June 2009, and then Fisker later that year, but has issued virtually no loan commitments since then.

The DoE has come under criticism for its losses on solar panel builder Solyndra, which had previously received half a billion dollars under a different DoE loan program.

Solyndra's bankruptcy has subsequently made it very difficult for any applicants to get commitments from the DoE on their applications, some of which were submitted two years ago or more.

Coda Automotive says its business plan doesn't rely on the Ohio plant. In the short term at least, the company is concentrating on delivering more 2012 Sedan electric cars to its first wave of buyers.

The change in plans means Ohio will lose out on 1,000 potential manufacturing jobs.

Coda told the Dispatch, "“Coda remains committed to job creation and is grateful for the leadership of the elected officials and public/private sectors of Ohio that supported us in the (loan) application process.”


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Comments (30)
  1. i am not keen on the taxpayers giving money to businesses.

    why cant the facility be built by the city/govt/feds and leased to coda ?

    if coda goes under, surely some other business could come in and take over.

    it is not as if we are gonna lose the need for the batteries.

  2. The government (DOE) isn't giving money to Coda. They are lending money to Coda, who will have to eventually pay it back with interest. It is vitally important for the government to encourage the development of electric cars and renewable energy.

  3. didnt you read the article ?

    they gave the money to solyndra when they went bankrupt, which is why coda cant get the money.

    if the govt owned the building, they would have something for their trouble.

    should coda or its successor prove to be successful, they could always purchase the building.

  4. Wouldn't the buildings be just a very small part of total expenses, probably be leased anyway in case of a start-up company or already mortgaged to the max to private moneylenders?

  5. i dont know. there was no detail given for the 500 million loan - just where it was gonna be spent ?

  6. if this one operation is gonna be creating jobs for 1000 people - it must be a pretty large facility that is needed.

    i am not real familiar on just how much buildings cost, but it does not seem unreasonable to me that a large part of the 500 million would be spend on infrastructure - stuff that we the taxpayers could own, until it is purchased.

  7. "it is not as if we are gonna lose the need for the batteries."

    The auto battery business is extremely high risk. This is not a commodity product, there is a lot of research going on and new developments will make an existing battery manufacturing plant obsolete very quickly. The only battery companies that are going to survive are those with major research efforts and success at keeping up with (or leading with) the latest advances.

  8. batteries obsolete ? - likely, because it is a new product.

    plant obsolete ? - doubtful.

    i have always thought that the battery end of coda's business is its strongest. they have big ties with big companies.

    i dont think this hurts coda - they will just go off to china to manufacture. but it hurts the usa.

  9. Coda has all the looks of a company about to fail. If private investors shy away from this company, then the Feds, who have a knack for picking losers using other people's money (mine, for example) should shy away too. Even if this company were to sell cars and perhaps make some money doing so, its presence would in no way advance the prospects of electric cars. There is no justification for propping up such companies - the future of electric cars, in terms of when they will become economically competitive at mass marketing production levels, is totally dependent upon battery technology and battery costs. It ain't got nothing to do with Coda, or any of the dozen or so other look-a -likes being built by major automakers.

  10. in this instance, we are talking about batteries.

    if the govt owned the building, they would be protected.

    and they could lease it out, thereby encouraging evs and renewable energy.

    i dont see why you think that coda looks like it is gonna fail ?

    from my perspective, they have went thru the worst of their times - now, at least they have a car to sell, and can start making some income.

    i suspect coda will use their same business model, but simply do it overseas (say in china, where they already have connections).

    it would be nice to have those 1000 jobs, here, if possible.

  11. It's really sad that all these "Free Market" fundies have had the stage for so long. Look what they did here! They managed to kill another "Job Creator" by loudly proclaiming their fantasy that "Government shouldn't try to pick winners". They completely ignore the facts in the Solyendra case, that what was a good idea got beat in the marketplace by a heavily subsidized foreign competitor that basically started dumping product on our market to drive them and others out of business. Free Market? Delusional is the only word that fits.

    If you truly don't like taxpayers giving money to businesses, you should be demanding an end to all subsidies, oil, mining, agriculture, you name it. Ethanol finally went, lets get rid of oil next...

  12. Even if the government is going to get involved, we need to decide on the right way to do it. In the 80's the government was paying people up-front to build wind turbines. When the machines didn't work, the owners walked away from them.

    A better policy is to pay for the production of wind based electricity. In that way, the turbines need to work to get the money. Unfortunately, the US government still does not do this. Europe does.

  13. It's peculiar how Obama talks about having one million EV's on the road by 2015, yet on his watch almost no new loans were made for EV initiatives under the Advanced Technology Vehicle Manufacturing program. Even Chrysler couldn't get a loan and many initiatives were confronted with ever more stringent demands until they had to give up. Guess what politicians say in eloquent speeches and what they do isn't always the same. Duh...

    Anyway, apparently South Korea is the place to be for cheap batteries:

  14. you mean we cant trust politicians ???

  15. I know, I was as shocked as you are....

  16. good old competition - cant beat it

  17. We know these are loans rather than grants and the intent is to pay the money back, but it should be clear that the EV startup business is very risky (I don't mean to single out CODA, EV startups in general), and perhaps this isn't be best way to support EVs.

    I really prefer to see government money reward success rather than fund speculative ventures. So it seems to me that the $7500 tax rebate, and the installation of charging stations is a way to support EVs that have proven success.

    I wonder what other policies might be possible. Can we pay people 5 cents/mile driven in an EV? maybe 10 cent/mile if it is a truck. The EV obviously need to work in order to collect the money. So everyone will work toward successful operation.

  18. How about feebates? Charge a fee to people that buy inefficient cars and give rebates to people that buy efficient cars. Make the system revenue neutral and keep adjusting the size of the fees/rebates until the desired result is achieved.

  19. Obviously starting an EV business is very risky, that's precisely why government support matters, otherwise the market would have provided the funds. The tax credit scheme is a very effective way to support the production and sales of EVs but it's also a pot of gold at the end of a rainbow that spans a very long valley of death that many EV initiatives just can't make it through alive to collect the reward.

  20. I suggest letting people choose what products, companies, and technologies they want to support with their own money. Once the kind of product they want comes available at a price they're willing to pay, there will be untold billions to support it. After all, flat screen TVs didn't become popular because the government took taxpayer money and paid poor people to buy them. No. They were originally sold to rich people at high prices, and then over time those prices came down to the point where now everyone can afford one. And that's what needs to happen with EVs. Yes, it will take a while longer than some people would like, but having the government manipulate markets is inefficient and wasteful.

    Let the 99% decide, not the 1%.

  21. And what about China subsidizing their solar industry? Well, first of all, doing that is internationally illegal. So get them sanctioned, then impose punitive tariffs on their panels.

    Keep in mind, China can afford to do things we can't because they have a massive trade surplus while we have a massive trade deficit. If we had a surplus then yeah, we could subsidize whatever we wanted: solar panels, wind turbines, EVs... anything. But when we're tossing hundreds of billions out of the country every year, it makes it much more difficult to afford the luxury of subsidies.

    If our trade imbalance ever improves, then stuff the Chinese with subsidies. But until then, dumping tons of taxpayer money into a non-existant market will just hurt us.

  22. It seems worth noting that the U.S. trade deficit includes a large amount due to oil imports.

    In 2010, the U.S. imported $252 billion in petroleum-related products, out of a total trade deficit of $497.9 billion.

    The U.S. government's interest in encouraging plug-in cars is largely about energy security, since electricity can be generated in any number of ways, including domestic natural gas and renewables, as well as domestic coal (with emissions properly scrubbed, we hope).

    Your point of view is certainly a justifiable one, but if you're going to raise the trade deficit, it's important to realize that half of it is for oil--of which by far the largest part is for our vehicles.

  23. I would like to second John Voelcker comment about the trade deficit.

  24. you forgot a couple minor points

    1) we are not going to war over plasma tv sets

    2) plasma tv sets do not pollute our environment

    we need to get off fossil fuel, and the control that the haves can dictate.

    and as chris stated above, we need to support the endeavors to some degree - or too many of the endeavors will crumble.

    i still think my thought makes sense - coda could be "supported" while the taxpayer keeps ownership.

    coda could be given some breaks as time goes along.

    but ultimately if they fail, we taxpayers would get another company to do the manufacturing.

  25. I agree with the tone of your comment, but have a small nit-pick. Plasma TV's are quite inefficient and due cause pollution and perhaps an LED TV is a better choice.

  26. While government programs are sometimes wasteful and inefficient, consumer choices are perhaps even more wasteful and inefficient as US consumer choices of vehicles and levels of home insulation have shown for the past 30 years.

    I love when the "free market" works, or can be gently persuaded by simple voluntary programs like EnergyStar. However, some more direct form of government action does seem to be needed to fix the issues with oil.

  27. Coda impresses me more as a Chinese auto company than an American one. Just because they twiddle a few bolts in California...?

    And I certainly wouldn't co-sign a $500 million loan based on the progress they've made to date. Where is the compelling idea or technology they are bringing to market that isn't already amply represented? Where is the demonstration of competence or vision?

  28. Fox Car Report talks to Coda automotive CEO Phil Murtaugh and the designers behind the Pvilion Solar Sail charging station

  29. Making the Shift To Electric Vehicles

  30. Meet CODA Automotive

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