By Paul Lienert and Sakthi Prasad
June 11 Two affiliates of failed U.S.
electric-car maker Coda Automotive filed for chapter 11
bankruptcy protection on Tuesday, according to court documents,
in another sign of the challenges facing the "green" car
Lio Energy Systems Holdings, based in Delaware, and Hong
Kong-based Miles Electric Vehicles Ltd are seeking to have their
cases jointly administered with those of parent Coda Holdings
and its affiliates, including Coda Automotive, which filed for
bankruptcy on May 1.
Consumers have been slow to gravitate to electric vehicles
due to their high cost, lack of convenience and concerns about
their driving range. Among the prominent "green" car makers that
face an uncertain future is southern California-based Fisker
Automotive Inc, which is seeking a buyer after hiring bankruptcy
General Motors Co, Ford Motor Co, Nissan Motor
Co and Honda Motor Co are among the global
automakers that have invested heavily in electric vehicles, but
sales have been slow.
Miles Electric Vehicles LLC, a California-based company that
is separate from, but related to, Coda, was founded in 2004 by
entrepreneur Miles Rubin and was one of the first U.S. companies
to import small, battery-powered electric cars from China. It
has focused mainly on low-speed vehicles - electric cars limited
to speeds of 25 miles per hour and intended mainly for off-road
use by universities and park services.
Rubin is a co-founder and chairman emeritus of Coda
Automotive, which was established in 2009 as a spinoff of
Rubin's Miles Automotive Group. Coda sold just 100 of its
Chinese-made all-electric sedans before closing its doors
earlier this year.
In court filings, Lio Energy Systems is described as a
direct subsidiary of Coda Holdings, while Miles Electric
Vehicles Ltd is a direct subsidiary of Lio Energy.
Lio Energy was established in 2009 as a joint venture
between Coda and China's state-owned Lishen Power Battery to
develop and provide lithium-ion batteries for electric cars and
Miles Electric Vehicles Ltd was established by Coda to make
investments in China. Miles Electric Vehicles LLC is not part of
the bankruptcy filing.
Coda raised $344 million from such high-profile investors as
former U.S. Treasury Secretary Henry Paulson and L Brands Inc
Chief Executive Les Wexner. But in 2012 it withdrew its
request for $334 million in federal loans similar to those
received by Fisker and Tesla Motors Inc.
In its May 1 petition, Coda said it is exiting the car
business to focus on development and sale of energy storage
systems through its subsidiary Coda Energy. A group of lenders
led by Fortress Investment Group is seeking to acquire
the company's assets for $25 million through the bankruptcy
Coda's predecessor, according to court documents, was Miles
Automotive Group, which was founded in 2005 and originally
planned to sell an electric sedan called XS 500 - a
battery-powered compact developed by China's Hafei Automotive
that eventually morphed into the $38,000 Coda Sedan.
The U.S. Department of Energy in January backed away from
President Barack Obama's goal of putting 1 million electric cars
on the road by 2015, and laid out what experts called a more
realistic strategy of promoting advanced-drive vehicles and
lowering their cost.
Tesla has put thousands of cars on the road, but Fisker is
considering a bankruptcy filing. Fisker's lithium-ion battery
maker, A123 Systems Inc, filed for bankruptcy late last year.
The case is in re Miles Electric Vehicles Limited, Case No.
13-11511, U.S. Bankruptcy Court, District of Delaware.