The Coda EV's $24 Million Investors include Clinton/Bush Officials

Last Updated Jul 29, 2009 1:48 PM EDT

Investment capital is the holy grail during this recession, but Coda Automotive co-chairman Kevin Czinger has managed to raise $24 million in a Series B investment round for his new battery electric car, including some cash from prominent political players. Coda's car is about the size of a Toyota Corolla, and is based on the Saibao sedan made by China's Hafei Automobile Group. Coda has a joint venture agreement with the Tianjin Lishen Battery Joint-Stock Company, which will supply the 33.8-kilowatt-hour lithium-ion battery pack.

Coda is sourcing in China now, but has applied for a Department of Energy stimulus grant to build battery manufacturing capability in Enfield, Connecticut through a joint venture with Yardney Technical Products (which has supplied batteries to the space program). According to Czinger, western suppliers, including UQM, BorgWarner and Lear, make 30 to 35 percent of the car's parts. Porsche Design gave the front and rear ends styling updates, and is now working on paint details, badging and interior fabric.

The first cars will be delivered next year, and Czinger thinks it can quickly ramp up production--showing some confidence, Coda has ordered 20,000 motor and controller drivelines from UQM, causing its stock to gain 40 percent on Monday, when the sale was announced.

Czinger is bipartisan, since his investors include former Bush Treasury Secretary Henry Paulson (who is also joining Coda's Automotive Advisory Board) and former Clinton chief of staff Thomas "Mack" McLarty. Other investors include John Bryson, former CEO of Edison International; and Thomas F. Steyer, founder and co-managing partner of Farallon Capital Management.

There is a big Goldman Sachs connection, since Paulson is its former CEO, and Czinger worked there, too. Co-chairman Mac Heller spent 20 years at Goldman Sachs, and was head of global mergers and acquisitions co-head of the investment banking division.

Czinger declined to say how much money the individual investors provided. "Coda's non-capital intensive business model and globally collaborative partnership strategy persuaded me to join the advisory board," said Paulson. "Coda Automotive's approach will enable them to release the Coda electric sedan next year." Paulson also initiated the U.S.-China Strategic Economic Dialogue, and Czinger says "he's very involved in helping us with the China relationship and strategy."

So why did these high-profile investors get in on the ground floor? "They should," said Czinger. "I don't know anybody else who has a series-production EV prototype, plus a full-equity joint venture with one of the largest battery companies in the world. It sounds pretty good to me. But it's our own cooking--we'll see what the consumer has to say next year."