By Michael Kanellos
Coda Automotive, which wants to bring a largely Chinese electric car to the U.S. this year, has raised another $25 million and there's more to come.
The latest investment round brings the total to $74 million. Coda will use the money for final safety certification and building up its manufacturing capabilities. It will continue to raise money.
A spin-out from low-speed vehicle maker Miles Automotive, Coda hopes to combine Chinese manufacturing with Wall Street and Washington connections and not raise too many eyebrows in the process. Coda's car is based around a gas-burning car already produced in China by state-owned Hafei. Engineers at Hafei and Coda will tweak and test it to bring it up to western driving and safety standards, but using an existing car, ideally, will help cut engineering and testing costs and time. Partnering with Hafei, which makes 200,000 cars a year, also means that Coda won't have to build a factory.
The 333-volt lithium-ion battery with a driving range of 90 to 120 miles also comes from China. The freeway-legal car will cost around $45,000 before $7,500 in federal tax credits and other incentives.
So where is the Wall Street part? Investors include Hank Paulson – the former Goldman Sachs titan who became a familiar face to most Americans during his tenure as U.S. Treasury Secretary – as well as Thomas "Mack" McLarty, the former chief of staff for Bill Clinton, Tom Steyer, a noted energy investor and one of the large donors to Stanford's Precourt Institute for Energy Efficiency, and former Edison International CEO John Bryson. The VC firm Angeleno Group and company insiders also invested. Coda CEO Kevin Czinger--Goldman alum.
BYD (OTCPK:BYDDY), another Chinese battery and auto maker, hopes to also bring a car to the U.S. Warren Buffett invested in BYD. Whether and how long consumer acceptance might take is an open question. Japanese automakers were able to break into the U.S. market in a big way after several years because of the Arab oil embargo of 1973. Nissan (OTCPK:NSANY) (then Datsun) also scored with sports car drivers with its Z line. Korean manufacturers struggled for a number of years but finally broke through with low prices and long warranties.
The "Made in China" moniker isn't riding particularly high right now and several U.S., European and Asian manufacturers with strong track records like Nissan are already coming out with mid-priced electric cars and plug-ins in 2010 and 2011. Still, Chinese cars could be cheaper.
And to completely change topics, Quench USA, which makes water purification systems for offices that get rid of those plastic jug-based dispensers, raised $13 million from Virgin Green Fund and Element Partners. Virgin has also invested in Seven Seas Water, which makes desalination equipment for small scale plants. Element meanwhile has made a number of green building investments.