Coda's All-Electric Sedan Revs Up U.S. Auto Market

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QUIET REVOLUTION The Coda sedan, due out in 2010, is designed to be an all-electric car for everyday driving, at a middle-class price. | Photo illustration by Matt Hoyle | Photograph by Jerry Garns (cars)

Sliding into the driver's seat of Coda's electric sedan for the first time, I looked around for clues. Here's 100 years of automotive history, reinvented -- what's different? No gear-shift, just a knob that engages the car's two speeds, forward and reverse. A battery-life gauge. Not much else. Then I pull into midtown Manhattan traffic and hear the road noise, the thrum of passing air. They were always there, but now there's no engine roar to drown them out. The Coda's motor barely whimpers as it speeds into a new market for cars with no gas and no exhaust.

In the fall of 2010, the Coda sedan will become the first mass-produced all-electric sedan to hit the roads in the United States. About the size of a Honda Civic and 15% more than a fully loaded Toyota Prius -- $37,500 after the $7,500 government rebate -- it has five seats, six air bags, a 90- to 120-mile range on a single charge, and a top speed of around 80 miles per hour. Says Coda CEO Kevin Czinger: It's an "all-electric car for everyone," a 21st-century Beetle born of private capital and American enviro-guilt.

The battery challenge for Coda is "to move for the first time to a complex system." -- CEO Kevin Czinger

Other car companies are hot on Coda's heels. Besides the forthcoming Tesla four-door that has gotten most of the press, Nissan, Detroit Electric, and Wheego all have highway-speed electric sedans close to production. But Coda may have the best shot at mainstream success. Nissan's Leaf falls into the age-old electric-vehicle, or EV, trap: It's an alien-looking buggy with small wheels and no nose that won't look like a real car to American buyers. Toyota and Honda, which have EVs coming in 2012 and 2015, respectively, will need big numbers to be profitable, while Czinger says Coda will be profitable with sales of 6,000 to 10,000 vehicles a year. Coda has a year's head start on Tesla's sedan and more cash than startups like Wheego. But Coda's biggest advantage may be that it has already learned to navigate the parts market in China and made smart deals with suppliers.

"They have not only the financial wherewithal but also the access to top-notch engineering and suppliers," says Wheego CEO Jeff Boyd, formerly CEO of Miles Electric Vehicles. "I believe Coda's sedan is going to come to fruition."

Curiously enough, one of Coda's strengths is five years of experience making shoddy electric vehicles in China. The Coda brand emerged this past June from the wreckage of Miles Electric Vehicles, founded by environmental entrepreneur Miles Rubin. That firm's low-speed electric cars, or LSVs, still tool around university campuses and retirement communities, but quality problems alienated dealers; the company now sells direct to fleets. "Miles chose an inferior chassis, inferior Chinese components, and built a really cheap car," says an industry source. "They had no choice but to change the name and everything else."

To pump new life into his business, in March 2008 Rubin brought in Czinger, a well-connected former Goldman Sachs banker and principal in Silicon Valley startup Webvan who had been a first-round investor. With Czinger as CEO, $24 million more poured in from the likes of ex -- Goldman Sachs investment-banking head Steven "Mac" Heller, now Coda's cochairman; former Clinton chief of staff Thomas "Mack" McLarty; John Bryson, former chairman and CEO of Edison International; and former Secretary of the Treasury Hank Paulson.

That cash gave Czinger a solid base, but not nearly enough to buy high-quality electric-propulsion parts -- the battery pack, wiring, cooling system, and charger, none yet available off the shelf. So Czinger negotiated an innovative joint venture to reduce the price of the most expensive single component: the lithium-ion battery pack.

With no domestic lithium-ion battery producers ready to scale automotive-grade batteries, Czinger headed to China -- 14 times -- and hammered out a joint-venture partnership with China's state-owned lithium-ion battery company, Tianjin Lishen, which supplies companies such as Apple and Motorola. A team of Coda engineers, led by senior vice president of China operations Mark Atkeson, was installed at Lishen to do much of the R&D. Because Coda developed the battery-pack design, the company owns the intellectual property. For its part, Lishen gets to develop the infrastructure it will need to mass-produce electric cars once they become popular in China. Even with Lishen's experience, the process was daunting; the battery pack for the Coda sedan has 728 cells, while computers and phones have just a few. "You have to move for the first time to a complex system that is going to serve an automotive duty cycle," says Czinger. "There is a huge gap between those two things." Bridging that gap took cooperation -- and supervision.