Coda’s Innovative Auto Business Model

Original Source: http://www.sustainablelifemedia.com
Author: Thomas Miner
Original Publication Date: May 11, 2010

May 11, 2010 – Shunning operating standards and dealership models held by the major global automakers for decades, automotive startup Coda is planning to manufacture and sell its all-electric sedanswithout owning a single manufacturing plant or car dealership.

For their manufacturing process, Coda will be making and assembling the vehicle’s body at a leased plant in China. By leasing the plant, the company will save tens of millions of dollars in initial startup costs, and have the opportunity to scale without additional capital outlays. They will then import the parts to California where the final assembly will take place, allowing them to avoid all U.S. automotive tariffs for finished vehicles.

To begin, the Coda sedan will only be for sale in California, but the company will not be opening any dealerships in the state. They will be opening a single store in Los Angeles where customers can peruse the lineup and go for a test drive, and opening 7 other satellite stores which will be “test drive-only.” For vehicle service, Coda has partnered with Firestone, who will train their technicians to perform maintenance and warranty service at 75 retail locations as a start.

The company estimates that their lithium-ion battery powered vehicle will cost between $30,000 and $35,000 when it goes on sale this summer, but they hope to bring that price under $30,000 before too long. They are also hoping to squeeze more distance out of their 120-mile/charge batteries by year’s end. Production next year is estimated at 15,000 vehicles.

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