Last Updated Oct 1, 2009 12:25 PM EDT
The Chinese auto industry is, to some degree, dependent on export sales, and those have declined in 2009 because of the worldwide slowdown, sending some carmakers and suppliers into bankruptcy. EVs and batteries for export would seem to be a Chinese strength, because the country's ability to get parts (or whole cars) made and shipped at attractive price points in unmatched anywhere else.
Economic recovery makes China's prospects much brighter. "If we look out over the next decade," says Idea Lab in an industry report, "one can with confidence anticipate a resumption of global auto market growth, particularly fueled by economic recovery and robust demand from emerging markets. This will create many opportunities for the reconfigured industry with its new 'Asia-centric' footprint."
One eager customer of what China has to offer is Coda Automotive, which is building an electric battery car based on a Chinese chassis and batteries (the latter built in a joint operating agreement in Tianjin). Kevin Czinger, the president and CEO of Coda, said in an interview that he hopes to begin series production of the Coda sedan next July, with cars delivered to customers in August or September. Czinger says he can get the price down to $30,000 (if you factor in the federal $7,500 tax credit for electric cars).
The Coda will be assembled in China using a Hafei chassis (originally for a gasoline car) and body that has been partially redesigned by Porsche. The 34-kilowatt-hour battery pack is made through Coda's JOA with state-owned Lishen. Many of the EV components, such as the UQM electric motor driving the front wheels, are western-sourced. Other suppliers are Lear, Borg Warner and Delphi.
"Coda is the only company with a facility to manufacture a series-grade battery system that we have manufactured and tested," Czinger said in an interview. He added that his car compares favorably to the Nissan Leaf, which has been tentatively priced at $25,000 excluding the battery. "We're going to be at $30,000 for the whole car, and we have 30 miles more range," he said. Czinger is bullish on China's potential, as well as savvy about its challenges. "China and the U.S. together produce 40 percent of the carbon dioxide emissions in the world," he said. "And where auto sales in the U.S. have flattened, they're growing rapidly in China, which has replaced us as the world's largest car market. The excess production capacity in China can be used to accelerate adoption of battery vehicles worldwide. We need to find a way to work together through a smart inter-dependence that combines their assets with out knowledge base."
As Earth2Tech put it, "Coda is leveraging what McKinsey Quarterly described as China's "low-cost labor supply, its fast-growing vehicle market, its success in rechargeable-battery technology, and its substantial investments (both made and committed) in R&D for electrified transport."
Czinger said that if he'd had to build his Coda in the U.S., "it would have taken years and delayed the car. But if you go to Tianjin now you'd already see Lishen's million-square-foot battery facility that is jointly owned by Coda." As Czinger and others point out, when a country with centralized planning wants something done, it simply issues an order.
Still, Czinger does have U.S. production plans. Back in June, it proposed to build a battery plant in Connecticut with Yardney Technical Products, but that deal is off now because it wasn't funded with a Department of Energy grant. "From a political standpoint, we were not able to get funding at the federal level," he said. The DOE gave grants to Midwestern states, because that's where the automotive base is." Czinger says he is instead looking at seven sites in California for battery plants.
One thing that is definitely homegrown is Coda's investors, many of whom have (like Czinger) a connection to Goldman Sachs. The company announced last July that it had raised $24 million in a Series B investment round. Henry Paulson, former Secretary of the Treasury under George W. Bush and head of Goldman Sachs, is both an advisor and an investor. Others include Thomas "Mac" McLarty, former chief of staff for Bill Clinton. Capital was also raised from cleantech-focused Angeleno Group and the Piper Jaffray investment bank.
Jim Motavalli photo