Last Updated May 26, 2010 12:14 PM EDT
The pattern with recent federal auto loans and grants shows it really helps to have a strong relationship with the state government that will host your facility. Because Michigan matched federal dollars virtually one to one, the state got a big chunk of the billions for advanced battery plants. Coda appears to have strong relationships with both Ohio and the feds, which should help its chances of getting an advanced technology loan (which it will apply for in two weeks to a month).
"Locke is fantastic," Czinger said in an interview. "He definitely knows we exist now. He said to me, 'Hey Kevin, I worked on cars when I was growing up.' So we went through the car [the Coda sedan, with U.S. technology in a Chinese body] bumper to bumper. His enthusiasm was absolutely infectious, and he really got into the details of our car."
Czinger said Coda, aided by a McKinsey review, looked at California and North Carolina before settling on Ohio. "The state incentive package is very attractive," he said. The details of that package haven't' been released yet, and Czinger is also not disclosing how much he'll ask for from the Department of Energy. Nevertheless, he said he has "a very high confidence level" that the company will get funding. "The industrial logic of it is very powerful," he said. "Here we have a project that connects American innovation with American manufacturing jobs. It looks pretty good if you ask me."
Czinger undoubtedly learned from a previous attempt to build a battery factory in Connecticut with Stonington-based Yardney Technical Products. That effort, tied to a $38 billion federal funding request, fell apart last year when the DOE's dollars went elsewhere. A big problem was a lack of financial commitment from Connecticut officials in Hartford. The state tried to rescue the plan, but by then Czinger (a former Connecticut resident from his days working for Goldman Sachs) was looking elsewhere.
Coda has an ambitious plan for the plant, which will likely be in the Franklin County region that includes Columbus. The factory will mirror Coda's existing plant in China, which is no less than one million square feet. Although Coda plans to ramp up to only 14,000 cars only by the end of 2011, Czinger's expecting bigger things. Initial capacity could be 50,000 battery packs annually, with growth from there. "If the market accepts what we're doing, then we'll need hundreds of thousands of battery packs. We're building a facility that is more automated than our Chinese operation, but with the same opportunity to scale up."
Coda has always been good at raising money. It recently completed a $58 million Series C round, and has brought in a total of $125 million for Coda itself. The joint battery operation, Lio (oil spelled backwards), has split another $100 million in equity investment, Czinger said. Investors include former Treasury Secretary Henry Paulson (also ex Goldman Sachs), but don't ask Czinger how much he (or other investors) put in. That's a secret.
Ohio Governor Ted Strickland, a Democrat, says he's lucky to have bagged Coda, at least in theory. "The competition for this project between states was intense, and Ohio was not even under consideration by Coda at first," he said. "We made the case for them to invest in Ohio because of our skilled workers, world-class manufacturing infrastructure and competitive business environment."
Strickland is probably taking a look at nearby Indiana, where Governor Mitch Daniels, a Republican, has been aggressive in courting EV makers. It hosts battery maker Ener1 and soon the U.S. arm of Norwegian battery carmaker Think, among others.
Coda hasn't made many mistakes so far, but its big test will be late this year, when it finally starts selling cars. Coda lacks a dealer network, and is using the Internet to market its sedan, at first exclusively in California. That could prove prescient, because the golden state is not only inclined to favor EVs, but a combined federal tax credit ($7,500) and a state cash rebate (probably $5,000) will mean state residents can buy a Coda for around $20,000. Its biggest hurdle in California will be convincing consumers not to buy the better-known Nissan Leaf instead.