Hiccup or death knell?

That's what watchers of California-based automaker Fisker Automotive are trying to figure out after the maker of the Karma plug-in luxury sedan laid off about 65 workers and contractors in Delaware and California while renegotiating loan details with the U.S. Department of Energy. Fisker, which was to receive a $529 million loan from the DOE, has received less than $200 million of that, with the fate of the balance in question because Fisker has not met certain loan conditions due to production delays.

Here's the death knell perspective: With the Obama Administration under political pressure to reduce spending, Fisker is unlikely to receive the remaining $336 million, Wunderlich Securities analyst Theodore O'Neill said in an interview with the Boston Globe. Without that funding, Fisker will go out of business, O'Neill said, adding that A123 Systems, which makes lithium-ion batteries for Fisker, will also likely go under.

But no, say others, the problem is temporary. Investment advice site Seeking Alpha, for example, says A123 is a "buy." Fisker also downplayed the issue, with its spokesman, Roger Ormisher, calling the shutdown a "bump in the road" in an interview with The Wall Street Journal. Ormisher said production of the Karma hasn't been impacted, nothing that Fisker has delivered about 250 vehicles, and that the remaining DOE funds are to be used purely for the lower-priced Fisker Nina vehicle.

Fisker said in a statement last week that the company, which most recently received cash from the loan last May, is in talks with the DOE and raised $260 million in equity in late 2011. Fisker is pursuing "alternative funding sources," the company said in a Feb. 6 statement.

Additionally, the Orange County Register reported last week that a Fisker investor is suing the company for fraud. The plaintiff, Daniel Wray, invested $210,000 in Fisker and said the company informed him in January that he had to invest another $84,000 or risk losing the rights he gained with the original stock purchase. Ormisher told the newspaper at the time that he wasn't aware of the lawsuit.


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  • 77 Comments
      hi tyler
      • 2 Years Ago
      My mom finally got her karma last week that she had ordered when I first saw the first prototype of it a couple years ago. The car looks absolutely stunning and it is a super fun car to drive. While it does not get quite the electric range that Fisker was hoping for (at least not yet) as long as you drive it normally and aren't stomping the accelerator all the time we haven't really had problems with the range. So far we've put about 225 miles on the car and the computer shows it at 55mpg and thats probably low because when I've been driving it I've been kicking it into sport mode and making it go. Overall it's an awesome car, although it does have a good number of little glitches that will be worked out as time goes on since the whole thing is just a massive computer and just takes software updates to improve pretty much every aspect of the car. I hope the company can stick around because from what I've experienced so far it's an awesome car and I look forward to seeing what the produce in the future.
      chirowolf
      • 2 Years Ago
      I've loved the Karma ever since I saw the release photos, BUT all the delays , the rising cost, and the problems. My local dealer finally got a couple and teh salesman admitted they had many issues with the cars. At $100K i do not plan to be a beta tester. Still a beautiful car.
      Larry 4 Fisker Auto
      • 2 Years Ago
      Larry 4 Fisker Automotive Fisker Automotive is **not** a waste of taxpayer money. You can read by my earlier post, that I have losses that mount more that a few dollars of an individuals taxpayers money. Fisker, Tesla, Ford, GM, Nissan etc... will provide jobs going forward as we'll as contribute to saving lives. It is a start; the start, to weaning the US and other countries of foreign oil. Our original attempt to put a straw in Iraq's oil fields have failed. We lost hundreds of children, brothers, sisters, mothers, and fathers. Fisker is a noble pursuit and I stand behind them. Citizens of the U.S. - It is not what Fisker is about Fisker is today ($100k car) but what they will translate to tomorrow. We must invest in our future. Both Gov't and Private $. We are NOT our own worst enemy if we position ourselves correctly. I'm sure in a few years Fisker will have battery technology that will double and triple its range. I'm sure Tesla will do the same. This is our FUTURE - - I think we should back it and embrace it!
      Dennis Baskov
      • 2 Years Ago
      If they would have kept the price around 50-60k like they originally stated, they might have had a chance. But with over 100k pricetag, I doubt this car is going to go anywhere.
      Tweaker
      • 2 Years Ago
      "premature" Now that's confidence inspiring..
      SooooRight
      • 2 Years Ago
      I am sure Obama will float them a few hundred million just before they dissolve. HOpe and ChAnge you know.
        fat
        • 2 Years Ago
        @SooooRight
        Fisker is non union. Obama could care less.
          Scr
          • 2 Years Ago
          @fat
          The factory is in Delaware at a former GM plant. It won't be long before the UAW gets in on the action.
      • 2 Years Ago
      [blocked]
      Larry 4 Fisker Auto
      • 2 Years Ago
      Why I think Fisker Automotive should prevail. I think Fisker should pay back the DoE for the Karma. Around $190 Million. That is for a car build in Finland, thus I understand the public outcry. However...I' am IN FAVOR of the DoE granting the company the $336 Million to build the second (less expensive) car in the United States. They are much less of a risk at this stage of the game in my opinion. They have a product on the road from what I understand. Additionally, I know the goals of this company is to actually produce a second vehicle that is more realistically priced. The company (along w/ others) is making big strides in weaning the american commuter off of foreign oil. I personally travel about 42 miles round trip, thus I would use less than 1 or 2 gallons a week. Folks... I lost my only son in the war of Iraq. I don't mind shedding a few dollars (if that)to help fund companies such as Fisker Automotive and Tesla Motors. The reality is the DoE has funded other companies Headquartered outside of the U.S. I say we lock arms and stand behind the likes of Elon Musk and Henrik Fisker. Just build us a car/truck that the average american can afford. I trust this is part of your game plan and the only way to get there is building a more expensive / lower production model first. I get that. We have aided the larger companies such as GM, Ford, and Nissan. We should support Fisker and Tesla too. Don't leave the little guys out. They too, have the ability to provide US based jobs. Mr. President - Don't give up on either of these noble pursuits.
        carcrazed4life
        • 2 Years Ago
        @Larry 4 Fisker Auto
        Although none of us probably have paid as much for this country as you and your family may have, I believe the political pressure of getting the DoE funds are what has triggered Fisker to restructure is Lending sources. It is the same reason Chrysler and other manufacturer have pulled their DoE applications for their loans. I agree, less reliance on foreign oil and more on new innovative technologies will help win the energy independence. If that means the first batch of Fisker cars are geared to wealthy and fashion conscious in order to pay the premium of such tech verse it competitors, I'm okay with that. The government with it s bail out did what it did out of preservation. But rarely can politics get behind something innovative, and that is where it has always been left to the private markets to capitalize on. As a finance guy and someone with roots in Delaware, I can say that it will ultimately come down to how many companies believe in getting behind Fisker. Once the repay the DoE loan and get their new loans and cash structure finalized can they proceed to not worry about cash on hand, and invest and output at the speeds originally projected. I believe they will proceed because their is enough interest in this company and enough VC/Private Equity/etc funds out their who aren't making enough of a return that taking a gamble on a company like this is too good to pass up. Strictly my thoughts from the finance side with my car enthusiasts background.
        • 2 Years Ago
        @Larry 4 Fisker Auto
        [blocked]
      Thipps
      • 2 Years Ago
      I say it again. this is why the government should not get involved in private business. this kills the economy, when private business and government work together its called fascism...we all know how that ends
        • 2 Years Ago
        @Thipps
        [blocked]
        • 2 Years Ago
        @Thipps
        [blocked]
        • 2 Years Ago
        @Thipps
        [blocked]
      truckguy
      • 2 Years Ago
      Went to a ford dealer last week and they were like a bunch of hungry LIONS after a slab of meat. I told them that I was just looking and will be ready in the spring, they said I could have the car until then, just sign the paper work now and they would hold it for a couple months, I will never go back to another ford dealer again !!!! All other dealers hand me a card and say if you have any questions give me a call, then walk away, makes me think they are VERY DESPERATE.
      Maxximtl
      • 2 Years Ago
      The Karma is a $100k hybrid that gets low-20's for fuel economy in long-range operation. Is there any reason why this car should succeed? A Porsche Panamera V6 costs less, is faster and will beat it on fuel economy out on the highway. As James May pointed out tonight, Fisker was started by a designer, not an engineer. The Karma is the result of that false start.
      JohnEnzo
      • 2 Years Ago
      I said Fisker would be in Chapter 13 before the end of 2012 & most of the buffoons on Autoblog lambasted me for being negative.Well, well bitches look who's wrong now. Working in investments & floating companies,hedge funds i can tell you that unless you have billions to throw away there is no way to survive against established car companies and meet the gov safety standards.Green start ups are nothing more than black holes for tax payer & gov handouts to people with connections in DC. I predict Tesla will be in chapter 13 by 2013 due to the amount of loans being taken out for "development" while the money is being siphoned off to off shore accounts.
        pmpjunkie
        • 2 Years Ago
        @JohnEnzo
        Hey JohnEnzo, nothing to add but a stupid rant? Please pare everyone. Or provide something, anything, to back up your claims.
          Gubbins
          • 2 Years Ago
          @pmpjunkie
          It was an observation...not much rant-like about it. (well, maybe he could've left off the "bitches" thing though...) Rant or no rant, he's correct!
          Gubbins
          • 2 Years Ago
          @pmpjunkie
          It was an observation...not much rant-like about it. (well, maybe he could've left off the "bitches" thing though...) Rant or no rant, he's correct!
        • 2 Years Ago
        @JohnEnzo
        [blocked]
        Gubbins
        • 2 Years Ago
        @JohnEnzo
        I was about to post "First Fisker, then Tesla", but this post is much better. Agree completely--the next train wreck is Tesla. Not that EVs don't deserve a shot, but the established companies are the only ones with the engineering muscle and resources to last through the EV development process without being on life support.
        axiomatik
        • 2 Years Ago
        @JohnEnzo
        It's kind of premature to be saying "I told you so" based on the comments of some random "analyst". Do you have any idea how many "analysts" get air-time? And how many of their projections are wrong. I'm not saying that Fisker is going to survive, I think it is a long-shot. But you can't really say 'I told you so' until they actually go bankrupt.
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