Electric Car Projects Have the Most Buzz for Green Investors
May 19th 2010 5:15PM
Updated May 19th 2010 7:12PM
Investors' bullishness over the electric car business is showing no signs of abating. On Wednesday, a startup electric carmaker CODA Automotive said it has bagged $58 million in venture capital for the launch of its first vehicle.
The company is one of several startups that have received hefty private backing for developing electric cars, batteries and car-charging technologies. In fact, venture capital investments for transportation technology overtook solar during the first quarter of this year, according to research firm Cleantech Group.
CODA, based in Santa Monica, Calif., is designing a four-door sedan that it plans to bring to the American market later this year. The company hasn't settled on a final sticker price but hopes to sell it in the low $30,000 range, which would take into account incentives such as a federal tax credit of up to $7,500 for buying alternative-fuel vehicles.
Many Carmakers Have Electric Dreams
CODA joins a lot of established and startup carmakers set to introduce electric or plug-in electric hybrid cars over the next year. The sharp climb of oil prices a few years back and the success of Toyota's (TM) Prius demonstrated a demand for more energy-efficient cars.
Recent changes in federal and state policies to curb tailpipe emissions have forced carmakers to spend money on developing vehicles that guzzle less gas, or not at all. Last year, the federal government allocated $2.4 billion in grants to 48 projects to research and manufacture batteries, electric motors and power electronics, as well as to carry out charging network field trials. Big winners in the grant program include General Motors, Johnson Controls (JCI) and A123 Systems (AONE).
GM plans to launch its first plug-in hybrid car, the Chevy Volt, toward the end of this year. The carmaker announced yesterday it'll launch a smart phone app that allows Volt owners to remotely control certain features of their cars, such as scheduling battery charging, checking battery-charge levels and starting the car.
Ford (F) is working on a similar app for its electric cars, including the electric Focus, scheduled for launch in 2011. The carmaker has also teamed up with Microsoft (MSFT) to create an Internet-based service that will allow car owners to decide when is the best (and cheapest) time to charge their cars.
Nissan (NSANY), meanwhile, is introducing the electric Leaf this December. Other carmakers rolling out new electric or plug-in hybrid models in 2010 and 2011 include Tesla Motors and Fisker Automotive.
With the latest round of funding, CODA has raised more than $125 million. The company plans to use the money not only for launching its first car, but also making lithium-ion batteries for powering the vehicles. Its investors include Aeris Capital, EDB Investments, Countyline and Angeleno Group.
The carmaker has also formed a joint venture, called Lio Energy Systems, with Chinese company Lishen Power Battery. CODA plans to manufacturer the chasis and batteries in China to take advantage of its cheap labor and deliver 14,000 cars by the end of 2011. Most of the car components would be assembled in China. Coda wants to do the final assembly in California and is looking for a location for the factory.
Despite the new round of funding, Coda is competing against companies, including fellow startups such as Tesla and Fisker, that have received far more private funding and no shortage of media coverage to tout their spiffy models.