• Sep 22, 2009
Fisker Karma - Click above for high-res image gallery

Fisker's goal of becoming profitable by 2011 received a shot in the arm today thanks to the U.S. Energy Department's announcement that the upstart automaker will receive a $528.7 million conditional loan. The DOE says the loan, "will create or save about 5,000 jobs for domestic parts suppliers." Highlights of the DOE's announcement include confirmation that the money will go towards "two lines of plug-in hybrids" ($39,000 PHEV, here we come?) and that at least some of those jobs will be "to manufacture a plug-in hybrid in the U.S." Fisker will perform final assembly of its first car, the high-cost Karma, in Finland with partner Valmet.

When we spoke with company head Henrik Fisker about a low-cost model back in January, he told us once DOE funding came through, it wouldn't take long to get the lower-cost plug-in hybrid on the road. The DOE loan specifies that $169.3 million is to be used for engineering integration costs, working primarily with U.S. suppliers to get the Fisker Karma finished, with the remaining funding to be used on Fisker's Project Nina. Project Nina? There's a name we haven't heard before, but the DOE says it will involve "the manufacture of a plug-in hybrid in the U.S." Fisker says the name was chosen as a reference to Christopher Columbus, and "is symbolic of the automobile industry's transition from old world to new."

Earlier this year, the DOE gave conditional loan commitments to Ford ($5.9 billion), Nissan ($1.6 billion) and Tesla Motors ($465 million). The money comes from the Advanced Technology Vehicles Manufacturing (ATVM) Loan program. All the details are available in the press releases below the fold.



[Source: Fisker, DOE]


PRESS RELEASE:

US Energy Secretary Chu Announces $528 Million Loan for Advanced Vehicle Technology for Fisker Automotive
Investment will save or create at least 5,000 jobs

Washington, DC – Energy Secretary Steven Chu today announced a $528.7 million conditional loan for Fisker Automotive for the development of two lines of plug-in hybrids that will save hundreds of millions gallons of gasoline and offset millions of tons of greenhouse gas emissions by 2016. The project will result in approximately 5,000 jobs created or saved for domestic parts suppliers and thousands more to manufacture a plug-in hybrid in the U.S.

"This investment will create thousands of new American jobs and is another critical step in making sure we are positioned to compete for the clean energy jobs of the future," said Secretary Chu. "Plug-in hybrid electric vehicles could revolutionize personal transportation and cut our dependence on foreign oil, not to mention give us cleaner air and less carbon pollution."

This is the fourth conditional loan commitment the Department of Energy has entered into under the Advanced Technology Vehicles Manufacturing (ATVM) Loan program. The Department plans to make additional loans under this program over the coming months to large and small auto manufacturers and parts suppliers up and down the production supply chain.

In the first stage of the program, Fisker Automotive will use a $169.3 million ATVM loan for engineering integration costs as it works with primarily U.S. suppliers to complete the company's first vehicle, the Fisker Karma. Engineers will also design tools and equipment and develop manufacturing processes. This work will be conducted at Fisker's Pontiac, Michigan office with support from its headquarters in Irvine, California. While the final assembly of the Karma will be done overseas, more than 65 percent (based on cost) of the parts required for Karma will come from U.S. suppliers. The four-door Karma is scheduled to appear in showrooms in summer 2010.

The second stage includes a $359.36 million ATVM loan for Fisker's Project Nina, involving the manufacture of a plug-in hybrid in the U.S. Fisker estimates that up to 75,000-100,000 of these highly efficient vehicles will roll off assembly lines in the U.S. every year beginning in late 2012. The combined projects are anticipated to create thousands of jobs in the U.S. and provide substantial support for domestic parts suppliers saving or creating approximately 5,000 jobs.

Fisker automobiles are driven by electric motors powered by a lithium-ion battery, or, when that is depleted, a generator driven by an efficient gasoline engine. The electric-only range will be more than most people drive in a day. The battery can be charged at home overnight. Using gas and electric power, Fisker plug-in hybrids will have a cruising range of about 300 miles. The projected annual sales of these vehicles would contribute significantly to the Administration's goal of having one million plug-in hybrids on the road by 2015
.


FISKER AUTOMOTIVE AND US DEPARTMENT OF ENERGY AGREE TO TERMS FOR $528.7M LOAN
  • Funds awarded to develop affordable plug-in hybrids made in USA
  • At least 5,000 direct and indirect US jobs to be created or saved
  • An estimated 821 million gallons of gasoline will be saved and 8 million tons of CO2 offset from sales of Fisker plug-in hybrids through 2016

IRVINE, CA – Sept. 22, 2009: Fisker Automotive and the US Department of Energy have agreed to terms for a loan of more than half a billion dollars to create affordable, fuel-efficient plug-in hybrid electric cars.

A majority of the low-interest funds will go toward Project NINA, which will see the design, engineering and assembly of Fisker Automotive(www.fiskerautomotive.com)'s next-generation plug-in hybrids, starting at about $39,900 after tax credits. The remainder will help finalize development of the Fisker Karma, the technology leading plug-in hybrid that will enable the company to develop such lower cost models.

Fisker Automotive expects to create or save at least 5,000 US jobs among auto suppliers and thousands more to manufacture a plug-in hybrid in the U.S.

Project NINA – inspired by the ship belonging to explorer Christopher Columbus -- is symbolic of the automobile industry's transition from old world to new.

By 2012 Fisker Automotive is expected to launch a family oriented, user friendly plug-in hybrid featuring cutting edge technology, radical styling and world-class quality. Global sales are predicted to exceed 100,000 units annually. A significant percentage will be exported, helping to balance the US trade deficit.

"This conditional loan represents a significant step in America's future," said Henrik Fisker, CEO. "With it Fisker Automotive can rapidly develop affordable clean cars that satisfy our passion for driving and help restore the US as an auto industry leader."

All Fisker automobiles prove eco-friendly vehicles can be stylish, functional and exciting.

They combine the low energy-cost and tailpipe-emission free benefits of an all-electric car with the unlimited range of a gasoline powered car.

The funds are part of the US Department of Energy's $25-billion Advanced Technologies Vehicle Manufacturing Loan Program, created by Congress in November 2008 to help promote the development of energy-efficient, advanced-technology vehicles.

Fisker Automotive has already created hundreds of jobs by partnering with Tier 1 US automotive suppliers to develop the Karma. The company has also recruited a network of 45 premium retailers to market and service its vehicles. With Project NINA, that network is expected to grow to more than 100 US retailers, in addition to those in Europe, Asia and the Middle East.

The Fisker Karma's real-world, annual average fuel economy can exceed 100mpg, significantly more than that of today's hybrids. Its exclusive Q-DRIVE® powertrain is expected to deliver an emission-free 50 miles per full charge of its Lithium-ion battery, and a total extended range of more than 300 miles through the use of its gasoline powered engine/generator. If driven fewer than 50 miles per day and fully charged overnight it is possible the Karma can use as little as one tank of gas per year. More than 1,500 of the plug-in hybrids have already been ordered.

It is estimated some 821 million gallons of gasoline will be saved and 8 million tons of CO2 offset from sales of Fisker plug-in hybrids through 2016, based on SAE J2841 Electrical Usage Statistics.



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    • 1 Second Ago
  • 35 Comments
      Derek
      • 5 Years Ago
      I think a lot of people who hear the government giving/loaning/doing-anything-with money these days comes down to one simple truth...

      Our society is over-informed and under-educated.

      Which to me is a mix of sad and scary, considering the votes of those who understand carry no more weight than those who are easily swayed by sensationalist media (from both sides). Oh the things we're willing to do or give up as long as we're entertained.

      Anyway, everything else aside I hope that Fisker is a huge success. It could be the moral boost that the US auto industry and consumers have been waiting for.
        • 5 Years Ago
        @Derek
        "Which to me is a mix of sad and scary, considering the votes of those who understand carry no more weight than those who are easily swayed by sensationalist media (from both sides)."

        Which is exactly why the Founding Fathers set up a representative Republic - they were terrified of a full-blown democracy. Didn't mean to go off-topic there...
      • 5 Years Ago
      Government investment in business is vital. Every government has done it since the beginning of govenment. However...the cash-strapped US should not be loaning money to build luxury cars in other countries. We need to prop up our own economy and build products that regular people can buy. And, the government is putting too many eggs in the BEV basket. If BEVs fall short of expectations (and I'm sure they will), we're going to be stuck with another ethanol-type sinkhole.
        • 5 Years Ago
        Except that this loan has provisions that the project nina will be built in the US by parts supplied by US parts suppliers... FAIL
      • 5 Years Ago
      I'm surprised Microsoft isn't all over the DoE's "Cash for Vaporware" program.
      • 5 Years Ago
      (Repost of an earlier comment that disapppeared)

      If the Fisker car had any chance of commercial success the company would have no trouble raising venture capital from a private bank or investment fund.

      This socialist industrial policy, where the government promotes industries that the private market won't, never succeeds. It usually winds up with taxpayer money going to the politically well-connected regardless of a market need. The ethanol fuel industry is a good example of this kind of corruption.

      I want the US Government to stop wasting my money this way.

      And the Fisker car is as ugly as sin.

        • 5 Years Ago
        Fisker has been very successful in attracting private VCs.

        Just last week, QTWW announced they had raised $12.3 million in a private placement of stocks. Invesco, Barclays, Goldman Sachs, Vanguard Group, and Credit Suisse are all shareholders in QTWW, Fisker's parent company.

        Fisker itself receives substantial backing from Kleiner Perkins Caufield & Byers, Palo Alto Investors and the Qatar Investment Authority. Those three alone contributed over $200 million.

        Some of the investors in those groups are pretty savvy people: Bill Joy, Colin Powell, former VP Al Gore, John Gage. You know, the same people who provided VC to Google, Amazon.com, Electronic Arts, Netscape, Segway, Compaq, and so on.

        I think the investors behind Fisker have some pretty deep pockets. Which is why the US DOE could feel very confident that the loan would be paid back. Imagine putting down Google, Amazon, and EA as collateral on your home loan...

      • 5 Years Ago
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      Kumail
      • 5 Years Ago
      Project Ninja sounds good... We'll probably never know what it is though...
        Kumail
        • 5 Years Ago
        @Kumail
        I said we probably won't know what it is because its a ninja...
        • 5 Years Ago
        @Kumail
        The US Government is about to make a HALF-A-BILLION dollar loan to a company that has yet to produce A SINGLE CAR FOR SALE?

        This is absolute insanity.
        • 5 Years Ago
        @Kumail
        I meant NINA should be built in the US. You are correct, Valmet will build the Karma. But that's what the loan is for, so that Fisker can build a US facility. They're talking about something like 5000 jobs, spread among suppliers, etc.

        • 5 Years Ago
        @Kumail
        Funny thing about loans is that you have to pay them back. I bet its idiots like you who caused this recession in the first place...
      • 5 Years Ago
      For all the talk about socialism, isn't using government funds to keep workers employed more socialism than any sort of health care system?
        • 5 Years Ago
        letstakeawalk,

        The difference between the market interest rates and government interest rates *is* the subsidy, not the actual amount of the loan. Adding U.S. production requirements makes it protectionist. I don't have a problem with the general scope of the loan, but let's call it what it is. And let's not call it Socialism.
        • 5 Years Ago
        "isn't using government funds to keep workers employed more socialism than any sort of health care system"

        So you think supporting and investing in American jobs through LOANS is socialism?? you're not only a f#cking idiot, your anti-american.
        • 5 Years Ago
        cdwrx

        Where are you getting that it's a subsidy from? All the PR describes it as a loan. Even though it is described as a low-interest loan, it will have to be paid back.

        • 5 Years Ago
        cdwrx

        Fair enough. However, please don't lump me in with those creaming morons shouting socialism, communism, etc.

        • 5 Years Ago
        Not necessarily. When you take a loan out to build a house, the lender usually sets strict terms and conditions on how you use that money to build the house. In this case, the government is the lender, and they want to ensure a return on thier investment - ie American jobs and American made parts.
        • 5 Years Ago
        It's specifically a subsidy, so it's protectionism, thus it really doesn't help anyone.
      • 5 Years Ago
      For your info, Al Gore is part owner of this company
      • 5 Years Ago
      Why do Fisker, Tesla, et al have to go begging to the government for loans? You don't see that from Hennessey, Saleen, or other boutique manufacturers. Oh wait, I forgot, those guys build cars people actually want enough to pay the prices necessary for these companies to make profits.

      "Fisker's goal of becoming profitable by 2011 received a shot in the arm today thanks to the U.S. Energy Department's announcement that the upstart automaker will receive a $528.7 million conditional loan."

      Umm, getting a loan does not mean you're going to be profitable. All it means is you'll have interest costs to figure into your overhead.
      • 5 Years Ago
      Good to see the US gov't supporting research to get new tech to market faster and support companies that aren't the typical conglomerates. Helping the little guys is what this is about, and it's about time.
        • 5 Years Ago
        No, by "little guys" he's referring to the 5,000 American jobs that will be created or preserved because of this investment. Who are you idiots who are so offended by the idea of new jobs and new technology being invested in??
        • 5 Years Ago
        Yes, unless by "little guys" you mean the taxpayers loaning money they don't have to automotive suppliers.
      • 5 Years Ago
      Another half billion in taxpayer money to another manufacturer of expensive toy electric sports cars. Why?

      If these products had any chance of commercial success Fisker would have no trouble getting venture capital from a private bank or investment fund.

      This kind of socialist industrial policy, where the government selects companies to promote when the private market shuns them, never succeeds.

      I want the US Government to stop wasting my money on boondoggles like this. This is as bad as promoting ethanol fuels.

      And the Fisker car is as ugly as sin to boot.
        • 5 Years Ago
        Polo FTW!
        • 5 Years Ago
        "This kind of socialist industrial policy, where the government selects companies to promote when the private market shuns them, never succeeds."

        The vast majority of money that goes toward the development of drugs comes from guess who - THE GOVERNMENT. These drugs can be in R&D for YEARS before being scooped up by a pharma company, which then does any needed end-cycle research before going to human trials and finally the market. Without those government grants you wouldn't have most of the drugs the pharma companies over-charge you for. There's government socialism for ya.

        Your such a moron you don't even know what socialism is. This loan program is from the PREVIOUS CONGRESS...LAST YEAR, which you capitalist cowboy signed into law. Oops. There goes that "socialism" line again.
      • 5 Years Ago
      Wild dingos drug off my first post, but it has wandered back to camp now so we can call off the search.
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