Coda Holdings’ bankruptcy filing this week appears to be the latest in a series of bumps in the road to electrification for the automotive industry.
Small start-ups, in particular, have not found the going easy (see the travails of Tesla, Fisker, demise of Think). Car markets around the world have been under some pressure and asking consumers to plump for something new, relatively expensive to purchase and relatively untried amounts to a big ask, despite the green benefits and lower fuel bills. And the trusty old internal combustion engine keeps getting better, too.
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Developing electric cars does not come cheap either. Some analysts maintain that the big car companies will always be better placed to follow through on the necessary R&D with the capability to take something commercially viable through to production, with the big name brand able to reassure consumers.
Other technology and component suppliers to electric vehicles have found the going pretty tough, too (lithium-ion battery maker A123 springs to mind).
Coda sold just 100 of its electric cars cars. But, like Fisker, it did attract private investors with deep pockets, many of whom were sold on the idea that electric cars are a big part of the automotive future. The big question is: how big and on what timescale?
The Coda filing with US Bankruptcy Court in Delaware will allow the Los Angeles company to exit the auto sector and refocus on energy storage. The company uses the same technology it used in cars to build systems for utilities and building operators to store power.
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By GlobalDataBloomberg reports that Coda Holdings is seeking to sell its assets to a publicly traded private equity group, Fortress Investment Group, for USD25m. It listed assets of up to USD50m and debt of USD100m.
Coda launched its five-seater electric car in California a year ago. It said the car delivered a range of 125 miles on a full charge. However, the USD37,250 vehicle received some criticism for its styling and design. The company hired Phil Murtaugh, a former General Motors China and Chrysler executive, as its CEO in 2011.
Coda’s filing may act as another warning to investors and participants in the still growing electric drive and supplier industries. The uncomfortable questions surrounding the pace of electrification in the auto sector and timescales for a return on hefty investments remain.
