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Will Coda’s next electric vehicle be made in China at Great Wall? Maybe.

February 16, 2012

I’m not sure if it is audacity, foolishness, or good business strategy, but Coda Automotive,  the Los Angeles-based EV maker with deep ties to China, is already working on its next electric vehicle when its first is not yet on the road here in the U.S.  Coda won’t comment, natch, but a trio of sources from companies working on the next Coda—Coda 2.0 as one called it—confirmed that the next pure electric vehicle Coda is planning is a small SUV.  It should be launched in about two years if all goes according to plan, said one source.

Coda's electric sedan isn't on the road in the U.S. yet but Coda is planning for its next model.

Of course, that’s a pretty big caveat.  Let’s see, what could go wrong?  Well, the company could run out of money.  Coda has raised more than $300 million, but as Lindsay Chappell at Automotive News points out in a very nice blog, it costs a lot to produce a car.  He is talking about Fisker’s woes, but the same principle applies to Coda.  Its cars are pretty plain-Jane, and even at a reduced price and with two range offerings it might not find much of a market here.   Of course, as the name Coda Holdings suggests, Coda is about more than just electric vehicles. It is also selling batteries as storage devices and selling its electric drive train.  But those markets are pretty crowded.   Standing out will be tough.

So far, however, Coda is projecting an air of confidence. And why not? Defeatism sure won’t attract new investors or make existing investors happy.  Coda recently moved to a larger headquarters in west Los Angeles. It has multiple job listings at various online locations.  Among the positions:  Director Exterior Design (god knows the current model could use some help); Director Interior Design (ditto); Manager, Color and Material; Technical Expert Exterior Lighting; Chassis Suspension Manager; Brake System Design Release Engineer. Etc.

Hey, it kind of seems like Coda is trying to hire an entire staff of engineers, doesn’t it? Trying to become a real car company.  As Chappell points out, that costs money. For now, Coda is outsourcing its engineering to five or six different companies, says one of my sources.

As for choosing a small SUV as the next model, that’s smart. Because Coda last year signed a letter of intent with China’s largest SUV manufacturer to “study joint develop of electric vehicles,” according to Coda CEO Phil Murtaugh.  Great Wall, the SUV maker, has been turning out some nice vehicles recently. Its Hover smallish SUV is pretty old, but Great Wall has a research and engineering center. It could craft something new.   Murtaugh also hinted when the LOI was announced that models developed through the cooperation with Great Wall could end up in the U.S.  “Cars that would come out of this for the U.S. would be branded Coda. Cars for China would be branded Great Wall,” said Murtaugh.

Moving forward, I’m sure Coda would prefer to be hitched to Great Wall rather than Hafei Motor Co, its partner in the Coda sedan.  Hafei produces the glider.   According to LMC Automotive Ltd,  Hafei’s light vehicle sales fell 44% on-year in 2011 to 124,448 units.  Meanwhile, Great Wall sold 486,811 units in China in 2011, up 23 percent compared to the previous year.  Great Wall’s exports rose 83 percent to 83,000 units, according to the company’s website.  Destinations included Australia and Italy.  And of course Great Wall has a woman president.  Need I say more?

Coda also has potential distribution issues.   It has opened one “Experience Store,” in Los Angeles.  Those are branding exercises, aimed at introducing consumers to the concept of electric vehicles and especially, natch, Coda EVs.

Coda has opened one "Experience Center" so far, in an upscale mall in Los Angeles.

More experienced stores are planned—sometime.  Meanwhile, Coda is putting out a steady stream of tweets featuring customers at the LA store, I’ll give it that.  Coda has also signed up two dealers;  Marvin K. Brown Auto Center  in San Diego and Del Grande Dealer Group in San Jose.  Marvin K. Brown already has a Fisker dealership.  And both are in the heart of EV-friendly territories. So the locations are good, at least.  But two stores does not a network make.

Wonder if they know something we don’t that gave them the confidence to sign on?  I hope so.

2 Comments leave one →
  1. Bill Fisher permalink
    February 16, 2012 10:12 pm

    Another great article Ms. Webb. Great Wall will offer Coda better vehicle platforms and a more mature management team to assist CODA in taking the next steps into becoming a forcve in the electric vehicle market. More importantly, at least from my viewpoint, is that it gives Great Wall an entree into the U.S. market without the encumbrances of product liability that scares so many of the Chinese auto makers away from our shores. Mr. Murtaugh’s prior success cannot ensure market acceptance of electric vehicles, but given the market does indeed embrace electric, because of Mr. Murtaugh Coda will have a far greater chance of succeeding than any of the other Chinese entries and they’ll certainly make their mark. Now, about that money issue….

  2. Bill Fisher permalink
    March 5, 2012 9:39 pm

    I was thinking about your first paragraph where you questioned if it was audacity, foolishness or good business sense for Coda to be in the process of developing Coda 2.0 even before the launch of their first vehicle. I have to say, in retrospect, that I believe it to be good business sense. The electric vehicle market is a rapidly changing segment. The first offering from Coda, while the platform itself is rather old, is the first electric that actually looks like a regular sedan. But development of a soundly engineered vehicle takes years and if they were to wait until the market reacts to the current model, by the time the Coda 2.0 is released Coda 1.0 will certainly be a stale and irrelevant product providing dwindling revenue to the company. I consider it good business. Getting feet in the showroom is one of the toughest tasks of an automaker and having fresh product is one of the best ways to draw potential customers into the arena. Time will tell if the public will accept electric vehicles and their obvious handicaps, range anxiety and higher price point. But if they don’t plan for success, surely the chance of success is diminished.

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