California firm to sell China-made electric cars

A startup California developer of electric cars said Wednesday its first model will be manufactured in China and go on sale in the United States this year.

CODA Automotive Inc.'s four-door sedan will be produced by a Chinese partner based on one of its models that has been adapted for electric drive and to meet U.S. safety standards, said CODA's CEO, Philip F. Murtaugh. He said CODA will produce batteries in China with another partner and supply technology and engineering skills.

CODA plans to begin sales in California this year and expects to sell 10,000 to 14,000 vehicles in its first 12 months, said Murtaugh, a former chairman of General Motors China who joined Santa Monica-based CODA last month.

"I'm very confident we will launch our vehicle in the second half of this year," he said in an interview with a group of reporters.

If it can meet that deadline, CODA could become one of the first companies to sell a Chinese-made car in the United States following announcements by several brands of plans for such sales. CODA has postponed previously announced sales timelines, but Murtaugh said it should be able to stick to its latest schedule.

CODA's plans and the unusual structure of its manufacturing partnership expand on fast-growing ties between auto companies in the United States and China, the world's two biggest vehicle markets.

Global automakers and ambitious startups are racing to develop all-electric and hybrid cars as governments offer tax breaks and subsidies to promote alternative energy in hopes of reducing surging demand for oil.

Nissan Motor Corp.'s Leaf became the first all-electric model on the U.S. market in December. It competes with General Motors Co.' Chevrolet Volt, which uses an electric battery and a small gasoline motor for an additional charge.

A Chinese automaker, BYD Co., began testing its F3DM plug-in hybrid in Los Angeles in December. BYD says it plans to sell its K9 electric bus this year in the United States and start consumer sales in 2012.

CODA says it has raised more than $200 million from investors, including $76 million in its latest round of funding announced in January.

Murtaugh said CODA believes it can compete with bigger, established rivals such as Nissan because its battery technology delivers a longer driving range and more consistent performance at low outdoor temperatures that can sap a charge. He said that could help to overcome a key obstacle to winning widespread public acceptance of electric vehicles - "range anxiety," or the fear of running out of power.

CODA's battery can carry a 34 kilowatt charge, versus with 24 kilowatts for Nissan's Leaf, with a comparable increase in range, Murtaugh said.

"We won't be perfect but we will certainly be class-leading," he said.

The sedan is based on a vehicle made by Chang'an Hafei Auto, a subsidiary of Chang'an Auto Co. in northeastern China. Batteries are being manufactured in a joint venture with Tianjin LiShen Miles Power Battery Systems Co.

CODA also hopes to sell its propulsion systems to Chinese and other automakers and for use in non-vehicle industrial power storage, Murtaugh said. He said its Chinese joint venture is working on 28 projects to show to 12 to 15 companies, both Chinese and foreign, how its technology might be applied to products made for them.

In California, CODA's sedan will retail for $44,900, or $32,400 after a $7,500 federal tax credit and a $5,000 state government credit, said Forrest Beanum, CODA's vice president for communications.

Major U.S. rental companies Hertz Corp. and Enterprise Rent-a-Car say they will offer CODA electric sedans for rent.

CODA and Chang'an Hafei are discussing whether the Chinese partner might sell a version of the electric sedan in China, Murtaugh said.

The Chinese government has targeted electric cars in industrial development plans that call for China to create its own profitable technologies.

The Ministry of Industry and Information Technology said last year Beijing will invest 100 billion yuan ($15 billion) over the next decade to make China a leader in alternative energy vehicles.

In the United States, CODA says it might open a battery factory in Ohio if can obtain $400 million in aid from the U.S. Department of Energy.

Among other electric car makers, Irvine, California-based Fisker Automotive says it will start selling its luxury Karma model in China this year through a local partner.