EV startup Coda withdraws request for $334 million U.S. loan
EV startup Coda Automotive said today it has withdrawn its $334 million loan request from the U.S. Department of Energy after waiting two years for a response.
The electric-car maker, which began delivering its first cars to the U.S. market in March, had hoped to use the money to build an assembly and battery plant in Columbus, Ohio, creating 1,000 to 2,000 jobs, said Forrest Beanum, Coda's senior vice president of government affairs.
But he said the application was stuck in a "holding pattern" with the DOE, which oversees the Advanced Technology Vehicles Manufacturing Loan Program.
Coda, which had already raised more than $300 million in private capital, had yet to receive conditional approval on its request, Beanum said. The company withdrew its application in March.
"We just needed to continue operations overseas to meet our business plan," Beanum said. The car's subassembly and battery production is now being done in China.
Coda is the latest in a series of applicants that have failed to secure loan funding from the $25 billion program.
In February, Chrysler Group pulled its application, expressing frustration that the process was taking too long and the terms were becoming too restrictive. Others, such as startup Bright Automotive, were forced to close their doors, in part because of delays in the review process.
The auto loans, created by Congress in 2007, were originally intended to help the industry retool for more fuel-efficient models. But last year's bankruptcy of solar-panel maker Solyndra, another DOE loan recipient, has cast a pall over all clean-energy lending, including those for advance-tech vehicles.
"It became clear to us after the Solyndra debacle that things in Washington as it pertains to this program were becoming quite politicized," Beanum said.
"Going into an election year, our objective was not to be unnecessarily scrutinized due to politics," he said. Rather, its goal was to focus on the U.S. launch of its new EV this year, he added.
The Coda sedan starts at $37,250 and the battery comes with a 10-year/100,000-mile guarantee. The car's major components are made in China and assembled in Benicia, Calif. Sales at this point are limited to California, but the company plans to expand slowly.
Beanum said the company may reapply for the DOE loans at some point and still wants to establish U.S. manufacturing operations.
DOE officials have said they're committed to the program but must balance support for clean-vehicle projects with the department's responsibility to taxpayers.
So far, only five companies have received loan guarantees since 2008, the year the program was funded. The DOE has about $16 billion left to disburse, but it hasn't made another commitment in more than a year.
Ford Motor Co. is the program's largest recipient, followed by Nissan Motor Co., and two startups, Fisker Automotive, which makes a luxury plug-in hybrid, and Tesla Motors Co., which makes luxury EVs.
Fisker, however, has yet to start the line at its assembly plant in Wilmington, Del. -- the same factory for which it won a $529 million loan guarantee to retool for production of plug-in hybrids.
Fisker has drawn down about $193 million in loans, but the DOE has blocked access to the rest. The carmaker had missed several government-imposed deadlines last year when it delayed the sales launch of its first car, the Karma luxury plug-in hybrid, which starts at $103,000, including shipping.