The other day, I took a spin around your nation’s capital in what is being touted as the first affordable electric car that will find its way onto America’s roads.
Not, it’s not the Chevy Volt, the Nissan Leaf, an import from BYD or Tata or a down-scaled Tesla. It’s the Coda, the product of a southern California startup with an unusual business model and some big-name investors.
My chauffeur was Kevin Czinger, Coda’s hard-charging CEO (no pun intended), about whom more in a moment. Czinger wants to build Coda Automotive into an American car maker that looks more like Apple or Dell than GM, Ford or Chrysler.
Coda’s impressive array of backers includes Hank Paulson, the former treasury secretary and CEO of Goldman Sachs; Thomas “Mack” McLarty, Bill Clinton’s former chief of staff, whose family owns auto dealerships; John Bryson, the former CEO of Edison International; and Tom Steyer, the well-respected founder of Farallon Capital Management.
Czinger isn’t as well known but his pedigree includes degrees from Yale (where he starred on the football team) and Yale Law, and stints at Goldman Sachs, Bertelsmann and Webvan. “I’m doing this,” Czinger says, “because I think it’s absolutely critical that we reduce our dependence on foreign oil and don’t destroy the planet earth.”
Standing in the way of his goal is the problem confronting everyone in the electric car business: How to make a powerful battery at a price that won’t put the car out of the reach of most buyers. That, Czinger says, has been the focus of Coda. “All of our R&D and all of our capital expenditures went into the battery system,” he says. “We finally have the chemistry we need.” Coda developed the battery and owns the intellectual property.
To keep costs down, Coda will make the batteries in China through a joint venture with a state-owned company, Tianjin Lishen, which makes lithium ion batteries for cell phone companies. The vehicles will also be assembled in China by a firm called Hafei Automobile Group, which will manufacture the chassis as well.
Other suppliers span the globe. UQM Technologies, a Colorado firm, and Borg Warner, whose headquarters are in Michigan, will make the electric motor and drivetrain. The German company Porsche Design Studios provided design services. Mitsubishi Heavy Industries of Japan makes the cooling and air-conditioning system. Longtime auto industry suppliers Delphi and Lear also sell parts to Coda.
“This is a global car,” Czinger says.
About the size of a Honda Civic, the Coda will have a range of about 100 miles between charges, a top speed of about 80 mph and a price tag of about $37,500 ($45,000 before a $7,500 federal rebate). That’s not exactly a car priced for the masses but Czinger says: “Things will only get better. We will drive down price and drive up performance.” The company will ship its first cars next fall, he says, and hopes to sell a few thousand vehicles in 2010. Sales will initially be limited to California.
Coda itself employs about 50 people in Santa Monica and another dozen or two in China and elsewhere. That’s right–this is an automobile company with fewer than 100 workers on the payroll.
The benefits of this model are obvious. “We work in a very flat, non-hierarchical way,” Czinger says. “In terms of speed and cost and execution, that’s an advantage.”
“We’re enterpreneurs,” he says. “We’re not going to spend $500 million on an auto assembly plant.”
The combination of U.S. research and engineering, low-cost global manufacturing, Internet marketing and on-demand production means that Coda resembles an electronics company more than it does a traditional automaker.
Of course, it also raises obvious questions about who will sell the cars, how customers can do test drives and what happens when they break down. Coda has no dealers, and doesn’t plan to establish its own network.
Czinger says the company has a solution, which he can’t talk about yet, but it could involve connecting with existing dealers, retailers or auto repair shops. “You can have very small retail footprint that you own or lease,” he says. “We’ll have the equivalent of an Apple Genius desk, plus the cars.”
Czinger, who is 50, has been with Coda since early 2008. He was an investor in a predecessor company, called Miles Electric Vehicles, which imported low-speed cars from China but struggled because of quality issues. He refocused the company on the battery and help raise a $24 million in new financing early this year–not a lot of money but, then again, no startups are raising a lot of money this year.
I enjoyed meeting Czinger, who told me he grew up in a working class family in Cleveland. “I was a car nut,” he says. We talked a little about Yale, where he was an All-Ivy football player, which you wouldn’t guess when meeting him–he’s about 5′ 10″ and weighs less than 200 lbs. Turns out that Carmen Cozza, the legendary coach, devoted an entire chapter to Czinger in his memoir. True Blue. What he wrote is amazing, particularly since Cozza is not prone to hyperbole:
Kevin Czinger was the toughest kid to play football at Yale in my thirty-two years as head coach. No question about it. He was also the most unusual personality, probably the outstanding overachiever, maybe the brightest student and definitely the scariest individual. I loved him because of what he was made of inside.
..When I say Kevin was tough, I mean he was competitive to the point of obsession and loyal almost to a fault. If there are two more important personality treats for a football player, I don’t know what they are. He was everything you could ask for in a teammate and friend.
If there are more important traits for an entrepreneur than competitiveness, loyalty and brains, I don’t know what they are, which is why Czinger has to taken seriously. I’m delighted that he has agreed to join us at Brainstorm Green, Fortune’s conference on business and the environment, next April.