CODA Motors, much like other electric vehicle startups, started with a vision. Unfortunately, vision doesn’t always translate into a success, and CODA Motors’ debt struggles may be just the beginning. As with any new product, there is always the chance that the market isn’t ready for the product or for the particular approach. CODA Motors’ plan, similar to Tesla Motors, was to install electric traction systems in another chassis.
The problem was which vehicle they each chose. Tesla Motors created the first Tesla Roadsters from a decidedly sweet-looking ride, the Lotus Elise. CODA Motors’ Chinese-acquired bodies, some 20 or 30 years behind the times, just don’t cut it in the modern marketplace. The EV market is tough, and CODA Motors can’t compete for looks, even if the underlying technology is sound.
CODA hasn’t sold very many of its first sedan, less than 100 since it was released in March 2012. Low sales means low income, and CODA has already laid off 15% of its workforce, about 50 people. Now they’re struggling, multiple support companies calling in their debts. Some of these appear to have settled out of court, but this still doesn’t bode well for the company.
Perhaps they may find a savior in their Chinese business associates Lishen, a battery maker, and Great Wall Motors. Fisker Automotive is seeking such a partnership, and failed battery maker A123 Systems was recently bought out by Wanxiang, another Chinese parts supplier. CODA Motors hasn’t failed yet, but their debt struggles are certainly not heartwarming.