Electric Car Start-Up, Coda, Will Sell Cars With New Business Model

Electric cars have been around for over a century, without ever catching on with the general public. There are plenty of reasons for that; low oil prices, limited range, and the overall prevalence of petrol-powered cars. The business model behind selling cars of any kind, though, has not really changed. Dealerships bring cars into a showroom, customers come to the lot, pick out what they want, and drive it away… or order it and wait a week. But will that model work for electric cars?

Probably. But that doesn’t mean the model couldn’t use some improving. Coda, the California-based electric car startup, plans to use a different business model for both its dealerships, and its car assembly. And it sounds like a pretty good plan.

Starting a car company is about more than building a good car, electric or otherwise. You have to sell the cars after you built them. That requires leasing large lots to place dealerships on, in addition to either building the car domestically, or importing it from another country. This all costs a lot of money, which can kill a fledgling car company if it isn’t done right.

Coda is going about things differently. Rather than build the cars themselves, Coda is leasing a factory in China, and then partially assembling the car overseas. This way, Coda doesn’t have to open its own assembly plant, saving hundreds of millions of dollars. The cars will be shipped to California, where assembly will be finished (and Coda can save on auto tariffs by importing the unfinished car as “car parts”).

Sales of the Coda sedan will initially be limited to California. They plan to open just a single dealership in Los Angeles. How can they expect to survive with just one dealership? Here is the really clever part. While there is just one dealership, there will be seven satellite stores where potential customers can test drive the Coda sedan. The car is said to have a range of up to 120 miles, can be completely recharged in six hours, and should sticker for between $30,000 and $40,000. Test drives of the Coda sedan are set to begin this summer, and with this business model, it sounds like they might have a real shot.

Source: The Columbus Dispatch | Image: Coda

Christopher DeMorro

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.