A new American electric car, via ChinaOctober 19, 2010: 3:00 AM ET
By Brian Dumaine, assistant managing editor
Chinese automakers have yet to crack the American market -- the quality and safety of their gasoline cars (never mind their electrics) don't pass muster in the U.S. One American entrepreneur, however, sees an opportunity to cash in on China's expertise in lithium-ion batteries and cheap manufacturing. Kevin Czinger, the CEO of startup Coda Automotive and a former VC and Goldman Sachs (GS) banker, has raised more than $125 million to build his $45,000 all-electric five-seat Coda sedan (above), which has a range of more than 100 miles on a charge. Starting this winter, the car will be available in California. Buyers there are eligible for subsidies of as much as $12,500. Coda hopes to sell about 14,000 cars over the next year.
Czinger believes Coda's innovative business model will help it compete with global carmakers. The company does all its engineering at its headquarters in Santa Monica. The batteries are made at a factory that's part of a joint venture with Lishen in Tianjin, and Coda leases an assembly line from China's Chang'an Hafei to build the body and chassis. Those components are shipped and then assembled in the U.S. (The car also contains some American-made components.) This virtual manufacturing network will allow Coda, says Czinger, to break even selling only about 800 cars a month.
History, of course, is littered with upstart carmakers from Tucker to DeLorean that got crushed by the giants. Coda's ace in the hole? It has a state-of-the-art battery that could be licensed or sold to any number of big carmakers, including the Chinese. Says Czinger: "We'll use the success of the Coda in the U.S. as a technological catalyst to drive Chinese carmakers to build reliable electric vehicles." The world just got a bit more interconnected.