Tag archives for Fisker
The US Government Accountability Office (GAO) is questioning why Department of Energy (DOE) loan funds are not paying out as planned. The participation hurdle is high, and there’s about $16.6 billion in green vehicle loan appropriations going unused, the GAO found.
The funds come from DOE’s 2005 Loan Guarantee Program and its Advanced Technology Vehicles Manufacturing (ATVM) loan program from 2007. These programs were a directive from Congress, but now House and Senate lawmakers on the powerful appropriations committee are hearing about the programs stalling out. The GAO report also told legislators that the DOE hasn’t “closed on a loan or loan guarantee or conditionally committed to do so under either program since September 2011.”
The GAO had interviewed applicants for the loan programs to evaluate the DOE’s performance and found that it the “costs of participating outweigh the benefits.” Those costs include a “lengthy and burdensome” application and review process and lots of documents needed to apply. The failure of the solar energy company Solyndra was also mentioned as making participants skittish about working with DOE and the Obama administration. It’s not just green car money that’s sitting unused. There is $34.8 billion left in various renewable energy project loans, but here, at least, there are 13 “active” applications.
The DOE might be finished issuing funds through the programs automotive. While the funds don’t have an expiration date, DOE says it will continue to receive applications and it doesn’t plan to use the remainder of the appropriated funds.
Ford, Nissan, Tesla and Fisker did receive ATVM program funds. Tesla is doing well enough to pay the loan off early but Fisker had its funding cut short and is not in a good position to pay it back any time soon.
By Jon LeSage
The U.S. government would be more effective at spurring plug-in vehicle sales if it provided more financial incentives to consumers instead of automakers. At least, that’s the opinion in a Bloomberg News editorial.
Saying that finding alternatives to gasoline “a worthy public goal,” Bloomberg says the government should expand purchasing incentives beyond the $7,500 it provides for buyers of some plug-ins and hybrids. President Obama has said he wants 1 million plug-in vehicles to be on U.S. roads by 2015; the Corporate Average Fuel Economy (CAFE) standards he proposed last year would mandate about a 70 percent fuel economy improvement by 2025. Bloomberg figures the government should hand out money to buyers, not companies, to encourage sales:
Providing loans to companies that can get their own financing in the capital markets is a questionable way to reach [the goal]. A better use of government money would be to encourage consumer demand – by continuing, and expanding, tax credits or other incentives for people who buy vehicles that use little or no gas.
During the past three years, U.S. Treasury Department’s Federal Financing Bank has made more than $8 billion in loans at about a 1 percent interest rate to established automakers such as Ford and Nissan as well as advanced powertrain specialists like Fisker and Tesla, strictly for the purpose of developing electric-drive vehicles. Bloomberg called such a strategy “questionable.” Such automaker loans are guaranteed by the U.S. Department of Energy.
By Danny King
When is $20 million not equal to $20 million? When, for some, it’s an interest payment and, for others, it’s all someone else thinks they’re worth. Here’s how that one number means two totally different things to two different green car companies.
Speaking to Bloomberg Television about the early repayment of Tesla Motors’ DOE loan, CEO Elon Musk said today that, “ultimately, the US taxpayer actually made a profit above $20 million on this loan. For this loan at least, people’s tax bill actually went slightly down.”
Musk said that, now that the loan has been paid back, more people might take a look at Tesla. “We were attacked a lot in certain quarters for having some government debt,” he said. “I think that actually matters to some consumers out there, whether or not a company actually does have government debt, and being able to say we fully repaid that debt with interest, I think it is helpful to some number of people out there in thinking about buying a car.” So, for Tesla, which recently raised over a billion dollars, $20 million is an easy price to pay to potentially sell more EVs.
Now, let’s look at Fisker Automotive, which is still fending off bankruptcy. We learned this week that VL Automotive and Wanxiang made an offer to buy the troubled automaker for an undisclosed sum. Word out today is that the amount that the two companies are willing to pay for Fisker is, you guessed it, $20 million. That’s about one percent of Fisker’s $2 billion-plus value back when the Karma plug-in hybrid was launched, according to Reuters. It’s unclear how a potential Fisker buyer will have to deal with the outstanding DOE loan amount of $171 million and other issues, but the $20-million offer a striking contrasts to Musk’s statement on Bloomberg Television, which you can watch in the video below.
Is Fisker Automotive on the ropes? Listening to cofounder and executive chairman Henrik Fisker speak at the Economic Club of Chicago luncheon at the Chicago Auto Show this week, you certainly wouldn’t think so. In an overwhelmingly optimistic speech, Fisker described his company’s ethos and plan to sell green cars around the world.
He wasn’t all sunshine and rainbows, though, as he talked about his company to the assembled ECC members and media. Fisker said that the company’s first (and thus far only) model, the Karma, was specifically designed to not look like any other luxury vehicle on the market. He admits this choice both limits the appeal and makes a statement, thereby attracting a specific type of buyer. “[The style] means you’re going to have a smaller market, because you appeal to people who dare to be different, who dare to show that they are buying a new type of brand, a new type of technology,” he said.
“There is not a lot of demand for pure electric cars, and I think plug-in hybrids will be the next big step.”
Whatever it looks like, Fisker believes plug-in powertrains are the right mix for today’s market. A plug-in hybrid with around 50 miles of range can drive without any gas on a daily basis but still take you for long trips on the weekends, he notes. “There is not a lot of demand for pure electric cars, but I think you can see hybrids are on the rise and I think plug-in hybrids will be the next big step,” he said. Since he wants Fisker to be a lifestyle brand that doesn’t compete with traditional automakers, there are no plans to make a gas-powered Karma (quirky aftermarket Destino venture aside). “We want to stay in a segment where there is less competition,” he said, not mentioning the upcoming Cadillac ELR.
“You might be able to go, let’s say, 250 miles, but then when you’re out of battery you might need to recharge for a couple days or find a charging station.”
Fisker also astutely managed to not mention Tesla Motors by name, even when he alluded to the company’s star vehicle, the Model S. Fisker argues a plug-in hybrid beats a pure electric for many reasons, including a cheaper battery. “When you’re carrying around a giant battery, it costs a lot of money on your daily commute and then when you really want to go far, you can’t do it anyway. You might be able to go, let’s say, 250 miles, but then when you’re out of battery, you might need to recharge for a couple days or find a charging station. Whereas our way is, you have a smaller battery and, when you really want to go far, you can go as far as you want.”
This limitation affects all EVs, he said. “In the pure electric car market, my prediction is we’re going to have too many models for too few buyers. And the reason is that every big car company is making one little electric car, mostly to satisfy the overall fleet average,” he said. “With plug-in hybrids, there’s a lot fewer cars on the market, and I think a lot more buyers.”
“In the pure electric car market, my prediction is we’re going to have too many models for too few buyers.”
Speaking of buyers, though, we’re still not sure what the status of Karma sales is. Fisker doesn’t announce its production numbers, but we can look at the numbers that have been publicly disclosed and calculate out from there. In late 2012, Fisker said his company had built a little more than 2,000 Karmas, and we know that it’s been over seven months since any new examples rolled off the line. So, let’s guesstimate that there are 2,200 Karmas in existence, and that’s all that have been around for seven months. In January, a Fisker spokesman said there was a “sufficient supply” to meet demand. This week, Fisker said his company had sold 2,000 Karmas, but that number has been bandied about for months now. In any case, those steady numbers imply that most Karmas that have been built have been sold and that the “sufficient” supply suggests demand is very low. When asked after the speech when Fisker would start making cars again, all Fisker would say was, “Soon.”
Fisker Automotive announced Wednesday that Henrik Fisker, its co-founder and executive chairman, had left the company because of disagreements with management. In a statement, the company said his departure was “not expected to impact the company’s pursuit of strategic partnerships and financing to support Fisker Automotive’s continued progress.” The company declined requests for interviews.
In an e-mail to Automotive News, the company attributed Mr. Fisker’s resignation to “several major disagreements” regarding the business strategy of the company’s executive management.
Tony Posawatz, who succeeded Mr. Fisker as chief executive in August, said on Wednesday, “We’re in the midst of some serious negotiating.” Mr. Posawatz was previously vehicle line director at General Motors for the Chevrolet Volt plug-in hybrid.
On Feb. 18, Reuters reported that the Zhejiang Geely Holding Group of China had made a bid of $200 million to $300 million to acquire a majority stake in Fisker Automotive. Geely is the owner of Volvo, the Swedish automaker, which it acquired in 2010 for $1.8 billion.
“One possibility is that Mr. Fisker thought if there’s an acquisition, the new company could say they’re in control over direction,” said John Gartner, research director for the Smart Transportation practice of Pike Research. Given that Geely is a Chinese company, Mr. Gartner said, it could take significant steps to reduce costs. “Fisker’s board could say that they have to do what’s necessary to make the deal,” he said. “Maybe Henrik Fisker thought, ‘It’s not going to be my company anymore.’”
Mr. Fisker impressed the automotive world with the design of the company’s luxury Karma plug-in hybrid when it unveiled a preproduction version in 2008 at the Detroit auto show. But since then, the company has been plagued by mixed critical reviews of the car, as well as business setbacks and technical problems, including two recalls. In addition, the Karma’s federal fuel-economy ratings were disappointing and its all-electric range proved limited.
After repeated delays, Fisker Automotive made its first sale of the Karma in October 2011. The company sold about 1,800 units before production was suspended in November 2012, one month after A123 Systems, its battery supplier, declared bankruptcy.
As long as Fisker is unable to produce and sell vehicles, it cannot raise the revenue needed to restart production and continue development of the Atlantic, a lower-price vehicle it plans to make at a former G.M. plant in Delaware. In late 2009, Fisker received a $528.7 million loan from the Energy Department, but that money was frozen after Fisker fell short of its production targets.
It’s not uncommon for the leadership of high-tech and automotive start-ups to replace visionary founders with chief executives who have more tactical experience. In 2007, Martin Eberhard, Tesla Motors’ first chief executive, was fired. In November 2010, Kevin Czinger, the first chief executive of Coda Automotive, resigned. And in October 2012, Shai Agassi, the founder of Better Place, an electric car infrastructure company, stepped down.
Before founding Fisker Automotive, Mr. Fisker was a top design executive for BMW, Ford Motor and Aston Martin. In addition to the Karma, his design credits include the BMW Z8 and the Aston Martin DB9 and V8 Vantage models.
This post has been revised to reflect the following correction:
Correction: March 13, 2013
An earlier version of this post gave the incorrect year for the unveiling of the preproduction version of the Fisker Karma at the Detroit auto show. It was shown in 2008, not 2007.
An earlier version of this post gave the incorrect year for the unveiling of the preproduction version of the Fisker Karma at the Detroit auto show. It was shown in 2008, not 2007.
Taste is a fickle thing. What’s cool today is lame tomorrow. Few things vex automakers more than this aspect of human nature, because new and even updated cars can take years to reach showrooms while the instant gratification generation loses interest. The following are perfect examples of the trouble automakers find themselves in.
These vehicles are as much rumor as they are fact. They’ve been rumored, alluded to, teased, promised, and delayed more times than we can recall, and have achieved a nearly mythical status that often evokes guffaws and cries of “I’ll believe it when I see it” from our staff. Whether the pet project of an executive, the demand of a vocal group of hardcore fans, or a technology that just isn’t viable yet, all of these vehicles have managed to hang around in limbo for years, feeding fans’ hopes and driving everyone else nuts. In no particular order, we present 10 of the longest-running broken promises in the automotive industry today.
Tesla Model S
After a string of high-profile growing pains, things have gone quiet over at Tesla. The company is working furiously to get its Model S electric sedan (pictured above) to showrooms by 2012. This might not seem like an unrealistic goal, until you consider the fact that Tesla doesn’t even have a factory to build the car in yet. The company is rumored to be deciding between three empty factories in the Los Angeles area that it would have to retrofit before ever beginning production, a process that’s estimated to require nearly two years working around the clock. Add to that the fact that the company hasn’t yet revealed a production-intent model of the car, and it’s not hard to believe that the Model S will miss its big dance number.
Mahindra & Mahindra Pickup
Though known globally for its rugged, inexpensive small trucks and SUVs, India’s Mahindra & Mahindra is completely unknown in the U.S. and looks to stay that way for a while. The company has been promising to bring its diesel pickup here since 2007 with tentative launch dates in 2009 continually pushed back. We hear now that the company is hoping to get trucks in dealers by December, but we’re not holding our breath, since we heard the same thing this time last year. We can only hope for the best for the shuttered Chrysler dealers who signed on as Mahindra dealers and are still awaiting product.
Global Ford Ranger
There’s nothing particularly wrong with the current Ford Ranger. It’s just ancient. The current model has been on the road more than a decade with only minor updates, and is long overdue for a replacement. When we’ll get one, though, is anybody’s guess. Global markets have had updated Rangers for years and we’ve spotted the latest redesign out testing more times than we can count. While it’s obvious that Ford is working on a new Ranger, we have no idea when it will actually see our showrooms, if ever. Of course, if the F-100 project rises from the dead, we may never see the next Ranger, but at this point we’re not sure which of those scenarios is less likely.
The world’s cheapest car costs the rough equivalent of $2000, and if Indian manufacturing powerhouse Tata has its way, you’ll see one in the U.S. Of course, for that to happen, Tata will need to catch up with Indian market demand first. Delays, cost overruns, and the relocation of the primary factory all put the Nano behind schedule, but it’s finally on the streets of India, glued-on rear hatch and all. And it’s catching fire. Tata’s got a recall out for some faulty wiring that’s led to several car fires, and even without that issue there’s serious concern that the little bean-shaped car wouldn’t meet U.S. crash standards anyway.
Re-Badged Ram Pickup
First it was Nissan that wanted in on the Ram pickup’s act. Building the Titan in-house wasn’t especially cost-effective for Nissan considering its low volume, so Nissan made a deal with Chrysler to build a new Titan that would essentially be a re-skinned and re-badged Ram. The project was on and off for some time until Chrysler entered bankruptcy and put the kibosh on the whole affair. With Nissan out of the way, word has it that Hyundai is sniffing around Auburn Hills looking for a Ram with a shiny Hyundai badge on it. Chrysler reportedly said no to that request, but it doesn’t matter since Hyundai’s issued an official press release denying any pickup plans for the “foreseeable future.” Nissan, meanwhile, has decided to press on with the Titan on its own.
GM RWD Large Car
We can probably thank former VP of Awesome Bob Lutz for this one, along with his replacement Mark Reuss. Both are big proponents of Holden and the work they’ve been doing down under, particularly on the Zeta large passenger car platform. After the Aussie-based Pontiac GTO flopped, they tried again with the Zeta-based Pontiac G8 only to see the brand put out to pasture. Still, they did get the Chevrolet Camaro built on the Zeta platform, but it’s said to be migrating to another platform with its first redesign. With the G8 gone, rumors continue to fly around GM fan sites of RWD Impalas, Buicks, and other large GM cars. Lutz fanned the flames before his departure, but now that he’s left the building, we’re not holding our breath.
Porsche/Volkswagen Small Roadster
A few years back, Volkswagen unveiled the surprisingly cool Concept BlueSport Roadster, a diesel-powered, mid-engine, two-seat sports car that promised a happy compromise between fuel efficiency and sportiness. Most everyone loved the idea, but it didn’t get enough love from VW brass to hit the streets. Then the whole Porsche/Volkswagen takeover debacle occurred, and suddenly there were rumors of a joint project between the companies, a la the old Porsche/Volkswagen 914. Word has it Porsche is looking for a new entry-level car below the Boxster, and sharing it with Volkswagen would seriously curtail the bill. The car’s been stuck in rumor phase ever since, and we don’t see it coming out any time soon.
A Viable Hydrogen-Powered Car
Sure, GM and Honda have built small fleets of hydrogen fuel-cell cars, and Mazda’s tricked a couple of its cars into burning the stuff straight up, but none of them has much of a prayer of mass production. Hydrogen remains expensive to harvest, volatile to store and use, and lacks anything even resembling a refueling infrastructure that could be used by more than a handful of enthusiastic early adopters in Southern California. Though the technology is impressive, it’s likely to be forgotten as battery-powered and range-extended cars like the Chevrolet Volt take to the market, what with their ability to take advantage of the massive electrical infrastructure in the U.S.
Any Car from a Chinese Automaker
China has dozens upon dozens of automakers in its home market, but only a few have a shot at becoming real powerhouses like their international brethren. The frontrunners, in a bid to expand their reach into what is now the second-largest car market in the world, have all declared they’ll bring their cars to the U.S., and soon. Geely, Chery, and BYD have all made and broken this promise more times than we care to recall, and they show no signs of slowing down. BYD even shows up in Detroit every year promising to bring its cars to our shores in the near future. While we don’t doubt that a Chinese car will someday be offered in the U.S. market, we aren’t planning any comparison tests yet.
The Entire Alfa Romeo Lineup
After an embarrassing withdrawal from the U.S. market in 1995, Alfa fans have pined over the possibility of a reintroduction. The legendary Italian automaker teased us with a small number of 8C Competizione supercars a few years back, but ever since the promise of Alfa’s triumphant return has been a string of broken promises. Things looked bleak until last year when Fiat, Alfa’s parent company, took control of bankrupt Chrysler. Alfa’s back! Or is it? The brand’s return has continued to fluctuate ever since the merger and its status has changed twice already in 2010 alone. For now, the plan is to have Alfas in U.S. showrooms in 2012, but we expect that story to change a few more times before then.
Toyota/Subaru FT-86, Carbon E7, Dodge Viper replacement, Chevrolet Camaro Z/28, Fisker Karma, Hummer H4, Dodge Hornet/subcompact car and nearly every electric car start-up and cottage supercar-maker out there.
By Scott Evans
The US Department of Energy has been sued in US court by a company that it denied a loan to in its Advanced Technology Vehicles Manufacturing program. San Francisco-based XP Technology is charging the DOE with “corruption and negligence” for the way it handled the approval for loan process.
XP Technology is looking for funding to develop its battery and hydrogen fuel-cell powered car that has body panels made from expanded foam. The compact car would weight around 1,500 pounds, less than half the weight of similarly sized electric vehicles such as the Nissan Leaf. It’s powered by small, removable cartridges that can be quickly swapped by owners or recharged at home. XP Technology has been granted several patents covering the technology inside the vehicle, but it’s yet to build the car.
This is the fourth time the company has been turned down for DOE loans through the ATVM program. Two of the loan applications were for $25 million and two were for $45 million; two other applications are still pending. The company says that it was previously given a $1 million grant from a previous DOE program to help develop a hydrogen storage system used in its vehicle.
So far, funds from the $25 billion ATVM program have only gone to Ford, Nissan, Tesla and Fisker. XP is alleging that other startup electric vehicle makers such as Bright Automotive and Aptera Motors had their application reviews intentionally stalled to force them out of business and protect favored players. Bright Automotive and Aptera Motors have both filed for bankruptcy. Published reports are also cited in the lawsuit criticizing other DOE loans including the now-bankrupt solar energy company Solyndra. XP is soliciting other companies to join it in the lawsuit. In 2009, when the first DOE loan was rejected, XP was looking for support from the public.
XP’s latest complaint was filed recently with the US Court of Federal Claims, and was denied. The company plans to have it re-filed through an attorney, and the suit will seek an injunction freezing all DOE loans programs until a new approval system has been established.
By Jon LeSage
Wasn’t it the 2012 presidential race that featured Republican candidates disparaging electric vehicle companies? Well, yes, but that doesn’t mean the 2008 vice presidential candidate (and
Ex-Alaska governor) Sarah Palin can’t do the same. In a Facebook post that bashed subsidies for advanced-powertrain vehicles like the Fisker Karma and Chevrolet Volt, Palin referred to California-based electric-car maker Tesla Motors as a “loser.”
Palin, in a Facebook post presumably written while she enjoyed her home’s view of Russia, took note of the recent Fisker layoffs and grouped it with what she called “past losers like the Obama-subsidized Volt that gets 40 miles per battery charge, or like the Obama-subsidized Tesla that turns into a ‘brick’ when the battery completely discharges and then costs $40,000 to repair.” Naturally, Tesla chief Elon Musk turned to Twitter for his response, noting on Monday that Tesla’s Model S warranty does indeed cover “bricking.” “Sarah Palin calls Tesla a loser,” Musk Tweeted. “Am deeply wounded.”
Tesla confirmed last week that it turned its first-ever profit during the first quarter of this year. What losers.
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By Danny King
The pros and cons of the auto bailout and concerns about the rising price of gasoline have been a political football throughout this election season. So, it should come as no surprise that the auto industry was brought up more than a few times in last night’s heated presidential debate.
Roughly a minute into the debate, the subject was raised by President Obama when asked a question about unemployment. The President’s answer: “I want to build manufacturing jobs in this country again. Now when Gov. Romney said we should let Detroit go bankrupt, I said we’re going to bet on American workers and the American auto industry and it’s coming back.”
Romney countered by pointing out that Obama followed the Governor’s advice offered in his New York Times editorial “Let Detroit Go Bankrupt” from 2008. Romney stated that the President did, in fact, let Chrysler go bankrupt, and pointed out, “My plan was to have the company go through bankruptcy… and come out stronger.” Obama retorted that Romney’s view of taking the automakers into bankruptcy did not provide them with any way to stay open, and would have lost a million jobs in the process.
The candidates also spoke on energy and oil production, primarily in response to questions of recently spiking gas prices. The President pointed out that oil production on federal land is at its highest in 16 years and natural gas production is at its highest levels in decades. Romney responded by saying that overall oil production is down 14 percent as a result of cutting licenses for drilling. Additionally, Romney criticized Obama for blockage of the Keystone oil pipeline.
Surprisingly, yesterday’s bankruptcy filing of A123 Systems was not brought up, though Republicans, including Romney, have criticized the Obama administration’s investment in electric cars as well as grants and loans for battery makers. If Tuesday’s Chapter 11 filing was not mentioned last night, it will most certainly come up in the days and weeks to come.
This Tesla-Fisker tit-for-tat thing could get fun.
Last week, Fisker launched its first national advertising campaign for its extended-range plug-in luxury sedans in the form of a multi-page ad in the Wall Street Journal on the same day Tesla unveiled its all-electric Model S, Hybrid Cars reports.
Fisker, which has generated more than $100 million in revenue through sales of its Karma sedan, included a statement in the ad from company founder Henrik Fisker that noted that the automaker’s path “wouldn’t be easy” and that the company “set out to redefine and reshape how the world thinks about cars.”
Additionally, the California-based company said it widened its European distribution network after granting Guanieri, which operates BMW, Ferrari and Porsche dealers in Spain, exclusive rights to import the Karma to Spain, Portugal and Morocco. Fisker is also opening an Oslo showroom in an old shipyard and added that, in the Netherlands, the Karma has outsold the Audi A8, Mercedes S-Class and BMW 7-Series through the first four months of the year.
As for the U.S., the production date for the less-expensive Fisker Atlantic has been delayed in part because the U.S. Department of Energy froze most of the $529 million in loans earmarked for Fisker. Fisker first showed off the Atlantic at the New York Auto Show in April.
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By Danny King