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U.S., China Firms To Make Electric-Car Batteries in Ohio


From the Wall Street Journal, May 26, 2010; By Norihiko Shirouzu
Original Article

California-based electric-car start-up Coda Automotive plans to build a factory in Ohio that it said could employ more than 1,000 workers and use Chinese technology to make lithium-ion batteries for an all-electric car Coda plans to launch this year.

Coda Automotive's Kevin Czinger (left) discusses electric-car batteries in Tianjin, China, with U.S. Commerce Secretary Gary Locke (middle).		 The announcement Tuesday is a rare example of a U.S. company collaborating with a Chinese company to accelerate an adoption of advanced technology. Another unusual facet of the venture is the planned creation of manufacturing jobs both in China and the U.S.

Closely held Coda will assemble its electric cars in the Los Angeles area with modules produced in China. It will initially make the car available only in California, where it is targeting sales of 14,000 electric sedans by the end of 2011.

Initially, Coda plans to import batteries from Tianjin, China, where Coda recently opened a battery plant it jointly owns and runs with Tianjin Lishen Battery Joint-Stock Co.

That plant can make more than 20,000 battery packs a year, but because electric-car-grade batteries are heavy and expensive to ship across the Pacific, Coda has been searching for a production site in the U.S.
The Santa Monica, Calif., company said it is considering several sites in Ohio for the facility.

Construction of the plant is contingent upon finalizing an incentive package with the state of Ohio and the approval of a loan from the Department of Energy, which the company said it plans to submit soon.

Coda discloses few details about its financial situation; the company said in March that together with Lishen it had raised $100 million in committed capital for the Tianjin venture.

Its board of advisers includes Henry Paulson, the former U.S. Treasury secretary and chief executive of Goldman Sachs Group Inc., who has taken an undisclosed stake in the company.

While the basic technology for lithium-ion batteries has been around for a while, making the batteries safe enough to power cars has proved elusive.

A few years ago when Coda began designing its all-electric sedan, "there were no U.S. suppliers of [large, vehicle-grade] battery systems, period," Coda Chief Executive Kevin Czinger said in an interview in Tianjin last weekend, prompting Coda to look to China.

"We found, luckily, a great partner that was very open-minded and said, 'Let's work together on your technology,' " he added.

Lishen, an established supplier of lightweight batteries for Apple Inc.'s iPhone and iPod Touch devices, "fully supports our decision" to build a plant in the U.S., rather than producing the batteries in China and exporting them to the U.S., said Mr. Czinger, who like Mr. Paulson has a professional past at Goldman Sachs.

Mr. Czinger said Coda will be the controlling shareholder of the battery-production venture in Ohio. Lishen, he said, is expected to take a "small minority interest" in the operation.

Mr. Czinger said Coda aims to replicate in Ohio the Coda-Lishen manufacturing plant in Tianjin, which he showed off this past weekend to visiting U.S. Commerce Secretary Gary Locke. The proposed U.S. plant is expected to eventually create "thousands of jobs," he said.

Coda said its sedan will have a driving range of 100 to 120 miles on a full charge. It will cost buyers about $35,000 after some $7,000 to $7,500 in federal tax incentives.

Coda says its car will compete with electric vehicles such as the $32,780 Nissan Leaf, which Japan's Nissan Motor Co. has plans to launch in the U.S. in December.

Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com