Electric Car Maker Coda Files for Bankruptcy

by Christopher Freeburn | May 1, 2013 11:58 am

Electric Car Maker Coda Files for Bankruptcy

bankruptcy next exit sign 630 flickr 300x239 Electric Car Maker Coda Files for Bankruptcy[1]Another electric car company has failed[2].

On Wednesday, Coda Holdings sought Chapter 11 bankruptcy protection in Delaware. The company, which says it owes creditors $100 million, but has assets worth only $50 million, is looking to sell its remaining assets to an investment group, Bloomberg noted.

With the backing of billionaire Philip Falcone and former U.S. Treasury Secretary Henry Paulson, Coda raised $320 million to finance the development of its electric car. The company touted the enhanced speed and range of its battery-powered vehicles.

Last year, a Coda executive said the company hoped to capture 15% of non-luxury electric vehicles sales in the U.S. Its compact car was priced at $37,250, but consumers could lower that price with a $7,500 federal tax credit. The car competed with electric cars from Nissan (PINK:NSANY[3]), General Motors (NYSE:GM[4]) and Ford (NYSE:F[5]).

However, sales of electric cars fell last year as consumers balked at high prices and reduced trip ranges compared to gasoline-only vehicles. Last month, Fisker Automotive defaulted on a $10 million payment on its federal loans[6]. Fisker recently fired 75% of its workforce and is expected to seek bankruptcy protection.

In contrast, luxury electric car maker Tesla Motors (NASDAQ:TSLA[7]) recently announced that it expected to produce its first-ever quarterly profit on higher-than-expected vehicle sales.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/07/bankruptcy_next_exit_sign_630_flickr.jpg
  2. has failed: http://www.bloomberg.com/news/2013-05-01/electric-car-maker-coda-files-for-bankruptcy-to-seek-sale-1-.html
  3. NSANY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NSANY
  4. GM: http://studio-5.financialcontent.com/investplace/quote?Symbol=GM
  5. F: http://studio-5.financialcontent.com/investplace/quote?Symbol=F
  6. defaulted on a $10 million payment on its federal loans: http://investorplace.com/2013/04/fisker-misses-10m-loan-payment-owed-to-u-s-govt/
  7. TSLA: http://studio-5.financialcontent.com/investplace/quote?Symbol=TSLA

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