In the last few months, two electric car makers set down roots for their U.S. headquarters here in Los Angeles. China-based BYD opened up shop here in October, and Coda Automotive just moved from Santa Monica to West L.A. with a politician-studded grand opening. Mayor Villaraigosa called the move a victory for green business, saying Los Angeles will be the green car capital of the world.
One of those EV makers will put its battery-powered jalopies on display at the L.A. Auto Show when it opens Friday, and one won't. KPCC's business reporter Shereen Marisol Meraji and environment reporter Molly Peterson take a look at marketing strategies for both green businesses.
Chances are, you've shared a stretch of congested freeway in Los Angeles with an ice-blue BYD F3DM. L.A. housing inspectors, including Lucito Bacierto, drive them around to check on Section 8 units across the city.
"It's so funny, nobody knows what a BYD means. It's like, what’s a BYD? It's Build Your Dreams," said Bacierto. "It's a new vehicle made in China."
The Build Your Dreams F3DM (DM stands for dual mode) is, in fact, a pretty non-descript compact car. It actually looks like a dated Toyota Corolla with zero-frills and lots of ashtrays. And, like Bacierto said, it's made in China. BYD is a Chinese technology firm that makes batteries, solar panels, LED lights and electric cars.
Bacierto showed off its capabilities, turning the key in the ignition: "I have 100 percent battery life, almost half a tank of gasoline. This gasoline has almost been here since three weeks ago," he said, pointing to the gauge.
Bacierto said his BYD hybrid plug-in can roll all-electric from the L.A. Housing Authority in Koreatown to San Pedro before it switches over to its gas engine – about 30 miles. He fills up the 8-gallon tank once a month.
The L.A. Housing Authority has been using 10 BYD cars as a part of a pilot program for nearly a year, and it just announced an extension.
Bacierto likes his BYD fine for work but he wouldn't buy a plug-in hybrid himself. He said the price point is still way too high for the average consumer.
"Aw, man, I'll be broke!" he says. And Bacierto really loves his Toyota Tacoma.
"Good, good good, looks good. What are you going to do with the logo?"
BYD America's vice president of strategy Sandy Itkoff oversees construction workers at its brand new North American headquarters on Auto Row in downtown L.A.
"We will have a car here, a bus here, we will have all our products here," she says. But she adds, "this is not a consumer showroom location. This is for dealers and for people who are purchasing on a different level."
She's talking about purchasing cars for fleets. That's where BYD wants to make inroads in North America. So don't look for a BYD at the L.A. Auto Show. It won't be there.
Micheal Austin, the vice president of BYD America, says it's focusing on fleets and not consumers for a couple of reasons. One, because the housing inspector we met earlier, Bacierto, is like most Americans: curious about electric cars, but not convinced.
"We would love to see the adoption faster," Austin said. "We believe it probably will be first in rental cars and car-sharing models, and maybe even on universities where students want to share cars but don't want to own one. Electric vehicles are perfect for that kind of application."
Austin says the second reason is infrastructure – there aren't enough public charging stations. And the third is the cost of what American consumers want. What they want, says Austin, are long-range EVs, "not just a niche commuter vehicle, a vehicle that can go down the interstates. Americans love to do our long-range travel, we want to be able to do that with electric vehicles. That’s BYD's vision, a mass market vehicle."
The BYD's e6 might be that vehicle. The long-range, all-electric crossover goes 180 miles on a single charge. It's on sale now in Zhenzhen, China after taxi fleets had used it for more than a year.
But the e6 costs nearly $60,000 – still $40,000 after Chinese government rebates. Definitely not priced for the Chinese or American mass market.
But BYD's Micheal Austin isn’t worried. His company sells more than than just EVs.
"You start with renewable power and store it, you distribute to electric vehicles or to your home LED lighting systems, then you have a truly zero emissions ecosystem. It’s hard, just selling only electric vehicles."
Tell that to homegrown electric car manufacturer, Coda. This summer they put out a video asking the question, "What are we dependent on?" And they included real peoples' answers: "Gas and oil to power my car. TV. Power, energy, my car, prepackaged foods, manufactured foods..."
Putting the video out on the 4th of July, Coda called it “End Dependence Day.” The video is part of a strategy that rests on the belief that people are ready to change to the charge.
That video and all of Coda's message came direct to Century City consumers a couple months back, parked just around the corner from Louis Vuitton in the Westfield Mall. Aqua blue and yellow graphics in the window lured people in to a pint-sized retail space. Name-tagged "guru" sales associates were friendly but not aggressive.
Sophie Nenner came from Paris, where she owned an electric bike shop. She explained the fast battery charging to a visitor. "Those are two chargers, and they're going to charge the battery in six hours when it's drained. So let’s say you're doing 25 miles a day, it’s going to charge in one hour only."
The emphasis is on opening a discussion, said Alex Mitchell, Coda's vice president for retail sales. He said the store exists because people need a place to poke around, where they can learn about a Coda before they write a check for one.
"That decision process isn't in a 30-minute increment," he said. "It's usually made over the course of time. And I think that’s why we, with this Experience Center, have designed it to be a place that encourages repeat visits."
Foot traffic was good, Mitchell says. Kind of like the L.A. Auto Show, where Coda has a spot again this year. The decor looks the same: raw wood; raw battery trains; fancy, graphically-savvy map of where you can drive. But what reels in mall-goers might not sell a Coda in a crowded and fossil fuel-dominated convention hall.
A dozen people crowded into Coda's Century City spot one Wednesday last month. They listened to the Coalition for Clean Air’s Martin Schlageter explain how combustion engines make air pollution.
"Smog is chemicals in the air," Schlageter said. "It combines volatile organic compounds, or VOCs, with NOX, oxides of nitrogen, and that's basically what happens when you combust fossil fuels. Cars are the number one source of the VOCs and the number two source of the NOX in the Los Angeles region."
In order to sell cars, Coda is selling the clean car concept as creatively as it can. Sales and marketing chief Thomas Hausch said as a start-up, Coda doesn't have money to burn on national TV ad buys. "It really is a challenge just to get the brand across, and we're quite confident that we can achieve it for the number of customers that we’re targeting," he said.
The fans of plug-in cars are salesmen themselves, said Hausch, but they're already on board; reservations to buy new Codas filled up well before production started this week. But Coda needs more than just the super fans.
In another bid to open up its market, it just lowered its sticker price to $39,000, which puts the drive-home price under $30,000 for buyers cashing in federal and state rebates.
"Even if you know that the total cost of ownership after five years might be as affordable as a regular internal combustion car that size, the customer still has to up front pay a significant amount of money to own the vehicle, and only over the years with the huge savings in gasoline and oil changes do you get the money back," said Hausch.
Unlike BYD, Hausch is confident the wider L.A. market is ready for Coda's logic. And he says L.A.'s infrastructure is ready for electric cars now. "There are fast chargers, available, there are parking spots available. If you go to our Westfield Mall, if you park in the first level there are six chargers there."
Of course, Coda put the chargers there. In the bowels of the Century City mall, gurus like Sophie Nenner offer test drives – hundreds so far.
KPCC's Molly Peterson went out for one too. Her Volvo’s only got 207,000 miles on it, so she's not really in the market. But that's OK with Coda. Right now, even word of mouth counts as a sort of sale.