|A green car start-up, Coda Holdings, filed for bankruptcy protection Wednesday after selling just 100 of its all-electric sedans.
The filing with the federal Bankruptcy Court in Delaware will allow the Los Angeles company to get out of the auto sector and refocus on energy storage, a far less capital-intensive business. The company uses the same technology it used in cars to build systems for utilities and building operators to store power.
A group of lenders led by Fortress Investment Group plans to extend debtor-in-possession financing and will seek to acquire the company for $25 million through the bankruptcy process, Coda said in a statement.
Coda introduced its five-passenger electric car in California a year ago, delivering a range of 125 miles, or 200 kilometers, on a single charge.
The $37,250 vehicle was criticized for its no-frills styling, and its short history also included a recall because of faulty air bags.
Consumers have been slow to gravitate toward electric vehicles as a result of their high cost, and fears about their driving range.
Just three years ago, Coda was one of an emerging crop of California start-ups, including Fisker Automotive and Tesla Motors, seeking to build emission-free electric cars to appeal to mass-market consumers.
Investors poured money into the sector, and Coda raised $300 million in equity from backers, including Aeris Capital, the Limited Brands chief executive Les Wexner, and former Treasury Secretary Henry Paulson.
However, in 2012 the company withdrew its request for $334 million in federal loans like the ones Fisker and Tesla received.
As the allure of electric vehicles faded, Coda struggled to secure new private funding. Last year, Coda sought to raise $150 million but clinched just $22 million, according to a filing with the Securities and Exchange Commission.
Tesla has put thousands of cars on the road, but Fisker is considering a bankruptcy filing. The maker of lithium-ion batteries for Fisker, A123 Systems, filed for bankruptcy late last year.
General Motors and Nissan Motor also invested heavily in electric vehicles.
Coda has about 40 active employees and expects to recall 50 furloughed workers. Emerald Capital Advisors is advising Coda on its restructuring, and Houlihan Lokey is its investment banker.