New Electric Car's Nationality Up for Debate

(CBS/CODA Automotive)
Later this year, Coda Automotive will release an all-electric, freeway-legal car in America. And one of the questions will be where does it come from exactly?

The car will get built on assembly lines in China and is based in part around a gas-burning car from state-owned Hafei that's been tooling on the roads in Beijing and Shanghai for a couple of years. The battery inside Coda's sedan will come from a joint venture owned by Coda and Tianjin Lishen Battery Co.

To some, that will make it a Chinese car. BYD, a Chinese car and battery maker which counts Warren Buffet as an investor, will also release the electric e6 in the U.S. later this year.

But origin is a much more complicated question, argues CEO Kevin Czinger. The chassis of the Hafei's car was licensed from Mitsubishi. Thus, it's a Chinese made car based around intellectual property from one of Japan's more respected manufacturers. Coda's U.S. engineers have also redesigned the Hafei mobile to meet U.S. performance and safety specs. The company has even listed third parties like Porsche on some aspects of design.

"Maybe ten percent of the original design is left. Otherwise, the car has been completely redesigned. We have full responsibility for all safety aspects," Czinger asserted. "The auto industry is a global industry. Many components are from China already. It is less a matter of geography and more a matter of what firm has control over process and quality."

Coda engineers also remain full-time on the manufacturing floor to oversee production. And the Chinese origin of the battery? The electronics for thermal and battery management of the pack were designed and will be produced in the U.S. Coda will then send them to Asia to be inserted into battery packs. The complete battery packs will then be inserted into cars and shipped to the U.S.

35 to 40 percent of the components in the car, when measured by monetary value, come from U.S. manufacturers like Borg Warner, he adds. Coda will release the car in the fourth quarter of this year to American consumers and hopes to deliver 15,000 cars within the first year of production.

So which way is it?

"It's a Chinese car," said Wayne Cunningham, who runs the car technology coverage for CBSNews.com's sister site, Hank Paulson, the former Treasury Secretary and Goldman Sachs alum who became a household figure in late 2008 when he essentially demanded billions of dollars from the American public, and White House staffer-turned-lobbyist Thomas McLarty. You might as well stuff a copy of Das Kapital and a bottle rocket down Lou Dobbs' pants while your at it.

Most consumers will look beyond any national and political questions, both Cunningham and Squatriglia said: They won't care where it's from as long as they like it. Again, it's a split jury.

Coda says the car will have a realistic range of 90 to 120 miles. A two hour charge on a 240 volt plug will give drivers 40 miles worth of driving. A full charge will take about 5.6 to 6 hours. It has also inked a deal with Sears so that Sears technicians can check your house and talk about charging station options before you buy a car. It will cost $45,000 before tax incentives.

Those performance figures aren't as impressive as the ones associated the Leaf from the more established Nissan. The Leaf is expected to go only around 100 miles, but it might cost only around $30,000 before incentives and capable of a recharge in 4 hours. Nissan's secret sauce is a novel lithium polymer battery developed through a joint venture with NEC. General Motors' Volt will likely cost less than the Coda.

"The Leaf is a much more complete package," said Cunningham. "Coda will have a problem because the car is basically ugly."

Squatiglia, meanwhile, saw the same prototype and said he didn't see anything that made him think it was poorly made. Since there will only be so many Leafs and Volts to go around, Coda has an opportunity to gain ground.

If positive word-of-mouth about the car spreads, and the price can dome down, sales could come. Others like Reva in India could find a smoother path.

"You have to overcome a perception, but perceptions can turn," Czinger said.

Czinger further added that Coda didn't go to China just for low labor rates. It was also a matter of pragmatism, Czinger says. Coda did not want to spend $500 million to build their own production lines and the spare manufacturing capacity they could secure happened to be there. The necessary scale of the factory would also dwarf Coda's output.

"U.S. and European car companies would not welcome a competitor on their assembly lines," he said. "Someone has to let you in. In North America, the most efficient car plants need over 200,000 vehicles a year to break even."

We will see what happens in showrooms this Fall.
  • Michael Kanellos

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