June 11, 2013 / 9:49 PM / 7 years ago

Affiliates of electric car maker Coda file for bankruptcy

(Reuters) - 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 industry.

Daniel Weiss drives away in his all-electric CODA EV during an event at the Westfield Century City Mall in Los Angeles, California March 16, 2012. REUTERS/Bret Hartman

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 advisers.

General Motors Co (GM.N), Ford Motor Co (F.N), Nissan Motor Co (7201.T) and Honda Motor Co (7267.T) 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 utilities.

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 LTD.N 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 (TSLA.O).

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 FIG.N is seeking to acquire the company’s assets for $25 million through the bankruptcy process.

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.

Reporting by Paul Lienert in Detroit and Sakthi Prasad in Bangalore; Editing by Patrick Graham, Ted Kerr, Matthew Lewis and Dale Hudson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below