Electric-Car Maker Coda Files for Bankruptcy to Seek Sale


#1

Electric-Car Maker Coda Files for Bankruptcy to Seek Sale
By Michael Bathon & Kit Chellel


May 1, 2013 3:07 PM PT

Coda Holdings Inc., parent of the electric-car maker backed by billionaire Philip Falcone, filed for bankruptcy and will seek to sell its assets to a group led by a Fortress Investment Group LLC (FIG) unit for $25 million.

The Los Angeles-based company, whose Coda Automotive unit also sought court protection, listed assets of as much as $50 million and debt of as much as $100 million today in the Chapter 11 filing in Wilmington, Delaware. The company said it intends to sell its assets within 45 days.

While A123 and an Ener1 unit received U.S. government funds, Coda didn’t. The company applied for a $334 million loan in May 2010 and withdrew the request in April 2012.

Coda was forced to seek bankruptcy protection because of production delays, insufficient capital to market and sell its sedan, and slow growth for the electric-vehicle market, which it blames on the scarcity of charging stations, according to a declaration by Chief Restructuring Officer John P. Madden.

A “Green Technology” company that didn’t receive Federal $$?! How’d that happen? Did Coda’s application land on the desk of a lazy goldbrick? Did the Federal agency figure out they were not viable? Did Coda not contribute enough to the “right” politician? Did Coda lose the pols’ and bureaucrats’ winners-picking coin flip?

How long before this Enviro-Chimaera rises again from its ashes? 5 years? 10 years? 20 years? And when it does, how much taxpayer $$ will again get wasted on it?


#2

So, the companies that receive government money fail AND those that don’t get the free cash fail. Could it be that a business model that includes a product not really ready for and not really wanted by the mass market is doomed to failure? Nah!


#3

Say it ain’t so, Perkins! LOL

I noticed, too, that the reason given for the bankruptsy was the lack of charging stations. What dd these people think? That they were going to start popping up all over the place prior to investors seeing any real feasability for their investment?
I’ll allow that that may have been part of the problem for Coda, but the reality is that most people don’t WANT THEM. Most people aren’t willing to trade in something that works just fine for something that probably won’t, and most likely costs more.

From the article:

About 87,000 electric and plug-in hybrid cars have been sold in the U.S., with two years left to achieve President Barack Obama’s target of 1 million sales for the industry.

Uhh, ya got quite a ways to go there, Bub.
Good luck on that one! (not)

[I’m sightly surprised that he didn’t order charging staions put in, but perhaps he didn’t of that one, or perhaps couldn’t squeeze the money out of Congress. *Or*, maybe he had no intentions of our tax investments being successful. With that guy, who knows?]


#4

I noticed, too, that the reason given for the bankruptsy was the lack of charging stations. What dd these people think? That they were going to start popping up all over the place prior to investors seeing any real feasability for their investment?

Stupid (?) question time … how did we get to the point where there were enough gas stations to support the number of cars and the number of cars necessary to support those gas station? Seems really chicken-and-egg-ey. Was there slow growth over 1-4 decades? Did existing businesses that sold heating oil and lubricants add gasoline to the line of products they carried?

If the latter, adding charging stations will be more complicated than is readily apparent. Not only does a new business location have to start up (or an existing business add charging to the services they offer, but either one would entail significant upgrading of the business’ power connections, and probably to the local electrical grid (maybe even the grid for the whole state, plus adding more generating capacity). IOW, very large or huge logistical infrastructure needs to be created for EVs to become significant. By way of contrast, when conventional automobiles were starting to spread, the oil companies already served existing local businesses, that in turn delivered heating oil and lubricants to customers. IOW, a fair amount of the logistical infrastructure necessary to serve automobiles already existed, and the change/upgrade was less difficult.


#5

Actually, Pete, the same question crossed my mind. Then the rest of the day I got dstracted from thinking to look up the first filling stations. (Maybe get around to it today.)

Thing is, even w/o filling stations, people could carry extra fuel with them. With electric cars, not so much.

FWIW, I imagine gas stations grew as the popularity in vehicles grew. But, as you say, the logistics were an entire different story than electric charging stations of today.
For starters, people didn’t travel near as far as they do today. There was no highway system to speak of, and the roads were dirt.
The overly-burdensome gov’t regulations weren’t there, either. Can you imagine how many gas stations would’ve come about had there been? I’d say few to none. Which is probably why there are so few charging stations. (Heck, in some cities it practically takes an act of congress just to get an electric meter put on a house. And that’s from a builder who’s already licensed.)
Plus there’s that other little tidbit. The economy was growing. Right now it’s shrinking. Electricity companies, (which I thought the most logical to be investing and installing charging stations), aren’t interested in taking that on right now.

Which had me thinking that the electric car manufacturers were putting the cart before the horse.


#6

The answer to my Q above may be, “Both.” In cities and farming communities there would have been fuel and lubricant dealers for whom adding gasoline to their products carried would have been natural. OTOH, even that might have spread from cities - where heating oil usage and dealer size would have been larger - outward.

Thing is, even w/o filling stations, people could carry extra fuel with them. With electric cars, not so much.

True. The ability to carry a gallon or 2 or 5 of gasoline doesn’t have an analog with pure EVs.

The overly-burdensome gov’t regulations weren’t there, either. Can you imagine how many gas stations would’ve come about had there been? I’d say few to none.

Modern government hyper-regulation might have killed the automobile. OTOH, Equine Emissions regulations might have fostered the replacement of horses with autos … assuming government didn’t subsidize a dead-end technology like the Stanley Steamer.

Heck, in some cities it practically takes an act of congress just to get an electric meter put on a house. And that’s from a builder who’s already licensed.

I’m not sure that’s the greatest barrier to the spread of charging stations, but it is real and potentially quite significant. Bureaucrats like government to get a slice off the top in exchange for allowing development and growth.

Electricity companies, (which I thought the most logical to be investing and installing charging stations), aren’t interested in taking that on right now.

Electric companies are so hyper-regulated and so beset by anti-business “consumer activists” and Enviros that they would not and could not expand their infrastructure to provide capacity to a significant number of charging stations, let alone add that to their own operations.

Which had me thinking that the electric car manufacturers were putting the cart before the horse.

:rofl:


#7

“Equine Emissions regulations?”
:rofl:

But more seriously:

Electric companies are so hyper-regulated and so beset by anti-business “consumer activists” and Enviros that they would not and could not expand their infrastructure to provide capacity to a significant number of charging stations, let alone add that to their own operations.

BINGO.

Yet, electric companies would logically be the most inclined, as they, like the oil companies who were most inclined to invest in filling stations of yester-year due to their knowledge and accessability, can’t; either due to economics, regs, incompatable logistics, or whatever.
Bottom line is, they didn’t get interested.


#8

I’d bet that many of these companies started up not to create a electric car that will be sold in the masses that everybody will buy and get super rich. They started up because they knew the majority of them would receive federal moneys that they (The owners and CEO’s) could pocket and get rich, and not have to pay back, because they knew they weren’t going to be successful, because the timing for this isn’t right and the technology isn’t there for these fueling stations and batteries to be cheap and affordable.


#9

Yeppers! Live high off taxpayer $$; shift and cover up blame when the house of cards falls; find and jump on the next trendy fad; live high …


#10

Exactly. Can you really blame these CEO’s? Heck, I’m a small business owner and I would totally take advantage of an opportunity like that if it meant millions in my pocket like it is in this case. The Federal government aka the elected officials are horrible with tax payer money and over 60% of it is wasted in some way or form. Perhaps, a simple inquiry or hearing on this could have prevented this waste. You know do your re-search, and know what’s practical and what’s not. Build some common sense…

News like this and knowing what’s likely going to happen with the dollar, doesn’t just make me upset. It makes me angry to the core, because of how many US citizens will suffer as a result. Hundreds of billions of dollars are wasted every year in the federal government, every year in many different entitlement programs and legislation. A lot due to fraud. If they would just reform these programs and make them more efficient we could use way more of the current revenue to pay down the national debt and bring in more revenue to top it off, which is exactly what our country needs. Desperately.


#11

Yes I can blame them. Wrong is wrong regardless of government authorization.


#12

I have seen some strange looking cars around here including one that I swear is smaller than a Volkswagen but as for electric charging stations I have only heard of one at one of the Malls and I read it does not get used.


#13

[quote=“brewerfanx1, post:10, topic:39300”]
Exactly. Can you really blame these CEO’s? Heck, I’m a small business owner and I would totally take advantage of an opportunity like that if it meant millions in my pocket like it is in this case. The Federal government aka the elected officials are horrible with tax payer money and over 60% of it is wasted in some way or form. Perhaps, a simple inquiry or hearing on this could have prevented this waste. You know do your re-search, and know what’s practical and what’s not. Build some common sense… News like this and knowing what’s likely going to happen with the dollar, doesn’t just make me upset. It makes me angry to the core, because of how many US citizens will suffer as a result. Hundreds of billions of dollars are wasted every year in the federal government, every year in many different entitlement programs and legislation. A lot due to fraud. If they would just reform these programs and make them more efficient we could use way more of the current revenue to pay down the national debt and bring in more revenue to top it off, which is exactly what our country needs. Desperately.
[/quote] Yes, I can blame them - for all the above stated reasons.I truly hope you were being facetious about taking advantage of the tax-payers, too. For all of the above stated reasons.


#14

The Government is going to waste this money regardless so I don’t blame the CEO’s for taking advantage of that waste. Someones going too.


#15

“Someone is going to” take the money is no excuse for anyone doing so. Morality trumps pragmatism.


#16

Obviously you haven’t owned a business before. This is pure business and every owner goes into it trying to make money and lot’s off it. You don’t have to agree with it, but it’s business and I can’t blame the people involved, except the government that gave out the money in the first place. The electric car company’s are destined to fail like I said earlier, because of the lack of technology to make it cheaper and affordable. It’s a bad time to lend out money to these people and it shouldn’t have happened. What happened after the money was handed out I don’t fault anybody, but the lender.


#17

Just because a woman offers to sleep with a married man doesn’t mean he’s any less guilty of adultery.


#18

If a guy on the street corner is handing out free money to everybody that walks by, do you think about whether he can afford to do what he’s doing before you take the money or do you just take the money? It’s likely the ladder. I like my analogy better.


#19

This piece of ugliness?

or this piece of ugliness?


#20

These couldn’t power my radios.