Coda Automotive looks for funds to beat Tesla’s Model S to market

Coda Automotive, the small electric vehicle developer that just might beat Tesla Motors to an affordable sedan, is looking for a third round of funding to get its car in showrooms by next fall. With its fingers in several pies, the company is also hoping for a $38 million slice of the stimulus funds earmarked for advanced battery makers.

Tesla, which is already delivering its luxury roadster to customers, says its family-friendly sedan, the Model S, will go on sale in 2011 at the earliest, potentially giving Coda a head start of two or more quarters. On top of that, Tesla has estimated the price of the Model S at $57,400 — hardly a middle-class price point — and has yet to produce a commercial-scale model on budget. Coda’s sedan, on the other hand, will cost $45,000, but the company says state and federal incentives should lower that to $35,000 and eventually even $25,000.

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The technologies are comparable, although admittedly, the Model S is swankier and more powerful. With a bit of the sporty sheen inherited from the roadster, its battery can take it 300 miles after a single charging session. The Coda model, on the other hand, can only go up to 120 miles on a single charge, making it a better supplementary commuter vehicle. But valuing practicality over flash may pay off in the long run.

Coda spun out of Miles Electric Vehicles earlier this month, having raised $35 million. Miles was known for extremely practical, “low-speed” electric cars and trucks appropriate for commercial fleets. You can see how the emphasis on functionality influenced Coda Automotive’s design — and apparently some of its business strategy, as it plans to introduce 300 cars to fleet customers initially. Still, the company is clearly trying to make a clean break from its slow-vehicle past.

After fleet testing between June and September 2010, Coda plans to deliver 2,700 models to customers.

At the same time, it plans to bring in revenue with its battery operations — hoping to ramp up to a production rate of 20,000 battery packs a year. It is partnering with Tianjin Lishen Battery Joint-Stock Company, based in China and Yardney Technical Products in the effort. And if the Department of Energy does grant it the $38 million, out of the $2 billion it has dedicated to battery development, Coda will break ground on a new battery plant in Connecticut by 2011 — its first facility in the U.S.

Coda will officially open its third round of funding next month, but a target amount hasn’t been specified. Based in Santa Monica, Calif., it may tap past Miles investor Angeleno Group.