Coda Automotive, a Los Angeles-based electric carmaker, announced today that it is filing for bankruptcy. Coda’s parent company says it plans to sell its auto assets to focus on energy storage. The demise of the 4-year-old startup, which was backed by billionaire Philip Falcone, comes as a surprise to almost no one. Coda struggled almost from the beginning in a very difficult business. “They had a gigantic task ahead of them,” says Brett Smith, co-director of the manufacturing, engineering and technology group at the Center for Automotive Research. Coda sold only about 100 of its sedans.
Now that the company no longer is in the car business, what will Coda owners do if they need repairs or have problems with their cars? They are likely out of luck. “There are probably some parts in pipelines that consumers might be able to find on eBay (EBAY). And maybe the company will be able to support them because there are so few. But the reality is they are abandoned,” says Smith. (Coda did not respond to calls and e-mails for comment.)
While Coda is a tiny drop in the electric car market, its failure highlights an ongoing problem for the budding industry. Car buyers are loathe to spend tens of thousands of dollars on models with short histories and uncertain futures. Even traditional carmakers struggle once the stink of death descends on a brand, notes Smith, pointing to the tortured ends of Oldsmobile and Plymouth. “For a company that is a startup that may or not be there tomorrow, let alone in five years, it’s an incredibly difficult barrier to overcome,” says Smith. To get off the ground, electric carmakers have to hunt out the small group of buyers who are eager to be part of a movement and willing to accept the risks. And they, Smith says, are buying Teslas.
(Update with response from Coda)
Coda spokesperson Matt Sloustcher emailed the following: “Our dealers have indicated that they will continue to service vehicles, and we have made arrangements with them to make parts available to the best of the Company’s ability. In addition, we have made available shop manuals and service information to assist in the diagnosing and repairing of vehicles.”