Bad business partner or scapegoat? When it comes to battery maker A123 Systems and its role in Fisker Automotive's troubles, one conveniently anonymous source says its the former, alleging that the extended-range plug-in vehicle maker had plenty of problems of its own, Fox Business says.

Executives at Fisker, which made the high-end Karma, started blaming A123 for its production issues late last year, noting that Fisker had a hard time meeting inventory needs after A123 declared bankruptcy last October. Fisker further laid blame on A123 after the disclosure of a number of battery defects. Late last year, the US bankruptcy court OK'd Wanxiang's acquisition of 80 percent of A123 for $256.6 million. Earlier this year, Fisker and A123 reached a settlement in which Fisker's financial claims against A123's successor company were slashed to $15 million from $140 million.

Fisker, however, stopped making cars last July and sales of the Karma were far lower than expected, Fox Business says, citing the unnamed source. Fox Business says Fisker didn't respond to a request for comment, and A123 declined to comment.



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    • 1 Second Ago
  • 37 Comments
      Rotation
      • 1 Year Ago
      Scapegoat. Fisker had many cars sitting around that there were simply no customers for. There was no shortage of vehicles attributable to A123.
        Marco Polo
        • 1 Hour Ago
        @Rotation
        @ Rotation Normally, I have a lot of respect for what you write, but the above statement has me baffled. Of course you may have inside access to Fisker Automotive's order book prior to the collapse of A123 and the recall for battery defects, or some other special insight. However, I would have thought that the collapse of A 123 might create a certain hesitancy for potential buyers of a car dependant on A 123 batteries. Buyers of cars costing over $100,000 seldom want to start sourcing new batteries for their purchase ! With respect, I think your dislike of the Karma, has clouded your judgement.
      Marco Polo
      • 1 Year Ago
      Just another media beat-up to rouse all those Fisker haters to start typing away frantically. Fisker's demise was the inevitable product of a series of misfortunes, coupled with under-capitalisation and over ambition. The Karma started out a well regarded beautifully styled GT type luxury EREV. It was aimed at a specific market of affluent buyers who wanted a fashionable stylish vehicle, with a 'greenish', image. The Karma attracted that sort of buyer amazingly well . The Karma needed to portray the image of the car for winners, with an environmental awareness. It was all about style and fashion, not engineering purity. It's market was readers of GQ magazine, not ABG ! Fisker lacked sufficient capital, or resources to produce a mass volume selling vehicle. But the Fisker Karma, (especially the Sunset model) had the capacity to be a successful niche market product. It attracted a very lucrative export market. So what went wrong ? A series of highly publicised negative events,( mostly just bad luck) relentlessly pilloried by the US crazy right, and the spitefully enviously left, took the shine off the car. The distraction of the never feasible NINA or Atlantic project, wasted time and resources better spent on perfecting the Karma. Fisker's image and marketing edge was always about being a car for winners, as the endless disasters, and out-of proportion attacks grew louder, the image was irreparably damaged and the car became harder to sell. The myth that "stopped making cars last July " ignores the fact that the Finnish manufacturer, Valmet, who produce the Karma, traditionally shuts down from mid July to mid August. This coincided with the collapse of A123, and the increasing problems of marketing a vehicle which after Hurricane Sandy suffered a loss of faith by consumers about the company's ability to continue. Fisker still had loyal customers, especially in countries outside the US. But the Atlantic project had consumed so much money, and created too much bad publicity that, with all the other factors, Fisker lost viability. Fisker's total capital was less than most OEM's spend on launching a face-lifted model. A 123, was just one factor, albeit a large factor, in the disasters to hit this fledgeling company. But in it's short life, Fisker Automotive did create and sell 2500 cars, that one day will be highly prised classics. That's more than it's armchair critic's have ever accomplished !
        m_2012
        • 1 Hour Ago
        @Marco Polo
        Or it was just a pile of crap paid for by US taxpayers. Yea, we will go with that.
        dewd7
        • 1 Hour Ago
        @Marco Polo
        I would add the choice to build in Finland, as it brought out the long knives. Rubbed people the wrong way, became a perfect bad example. Then, Fires. This was widely promoted, and may have stopped sales cold, or caused investors to back off. Given that it is hard to find anything they did right, pointing to one thing as "the " issue may not be credible. Did A123 cease deliveries? Did they start asking for more money? Can't build any more cars without more batteries. That may well have been the killer blow. But again, given the logistics mess, the poor management, the string of misfortunes, the correct answer to what went wrong is arguably "everything".
          Marco Polo
          • 1 Hour Ago
          @dewd7
          @ dewd7 The decision to build in Finland, was logistically complicated, but not unprecedented or Valmet would not be in business ! There were only two fires, one of which may have been arson, and the other the result of a fan component. The Owner of the fan fire, was so loyal he promptly bought another Karma ! But the real killer was the combination of wasting time on the Atlantic project, and A123, which along with Hurricane Sandy , made the company look jinxed.
      PeterScott
      • 1 Year Ago
      Well, Duh.
      Joeviocoe
      • 1 Year Ago
      CO2 has a very low energy state. Which is why you get lots of CO2 when you burn a hydrocarbon fuel and extract the energy. To make Methanol ( CH3OH ) from CO2, you need to ADD Energy and ADD Hydrogen. You cannot do this onboard a vehicle. You need an EXTERNAL supply of energy. and lots of water.
      Dave
      • 1 Year Ago
      Its not easy starting a car company. Without cash infusions from Toyota, Mercedes, Panasonic, and a billionaire named Musk, Tesla would be out of business as well.
        PeterScott
        • 1 Year Ago
        @Dave
        Musk was not a Billionaire when he started Tesla, and his initial investment was tapped out at a couple-hundred Million, before he ran out of cash. Fisker burned through something like a Billion Dollars. So Musks $200 Million would not have made the difference. You need a lot of money, but you also need a great design that sells. Fiskers fundamental problem was not financing or batteries. It was poor design leading to very low sales. Even when production was shut down after ~2000 production run because of battery issues, and >300 were destroyed by Sandy, there still were ample cars waiting to be purchased. The sold in irrelevant numbers and that was the problem.
          Spec
          • 1 Year Ago
          @PeterScott
          Ironically, those cars destroyed by Sandy was probably the best thing that ever happened to Fisker.
          m_2012
          • 1 Year Ago
          @PeterScott
          Almost a year after production, there are brand new ones waiting to be sold.
      Joeviocoe
      • 1 Year Ago
      Also, converting waste heat is a tricky game. You can do it... but the equipment is bulky and expensive. Essentially, the most efficient way to do it would be a second, smaller heat engine. Kinda like a Combined Cycle power plant right in your car... too heavy though, any fuel gains would be negated by the extra weight, size, and cost. Thermocouples could do some heat to electric conversion, but these are expensive and don't convert a whole lot into useful electricity. Turbos... now they do extract energy from heat into power (not electric) for the engine. They have been known for years to increase power for engines.... and allow manufacturers to downsize the engines for better fuel economy. But they are also expensive and more maintenance too. No practical way to do what you are thinking.
      Spec
      • 1 Year Ago
      Totally. I think heavy weight, the terrible gas-only MPG, the flaky user interface, and the frequent fires are what caused the real problems, not the one-time battery issue.
        bluepongo1
        • 1 Hour Ago
        @Spec
        @ Spec ^ This ^ + greenwashing + the electric range wasn't that good either + if he can't own-up to these issues ( and hire an engineer ) the brand will never return even with outside help.
      Grendal
      • 1 Year Ago
      Should they come back, I don't see why they can't position themselves as a boutique automaker. Focus on 1000 Karma's a year. If they can pull it off, make the Atlantic too, but sell it for $80K and make 1000 of those as well. Focus on being a niche player and stop trying for more grandiose plans.
        Nick
        • 1 Hour Ago
        @Grendal
        You seriously think that 1000 units / year of 2 cars that cost a few hundred millions to develop would cover the costs?
      • 1 Year Ago
      A123 was one of the major reasons why Fisker spiralled down to where they are. Did you ever hear of a company that raised $1.4bn (GM, Ford, Chrysler) that delivered a vehicle so technologically advanced in that price? Car industry is capital intensive and Fisker did this in a shoe string. Paying salaries is something that probably the ex GM/Chrysler disgruntled employees threw out, but that is an optical issue to divert from the main issue: A123 issues that led to the 1st recall, A123 battery issue that led to the failure of the Consumer Reports Fisker Karma, A123 bankruptcy, 2nd recall due to a faulty fan fire, Hurricane Sandy and Jalopnik organising someone to break port security and aiding whoever did this illegally to do so and posting pictures of the damaged Fisker cars on their blog, add to that incompetent Detroit CEO;s who cannot handle all this and build value in the company. Paying salaries and hosting media events do not bring a company down. That sounds like disgruntled employees inventing reasons.
      Rotation
      • 1 Year Ago
      Marco Polo: No, I don't have a look into their order book pre-A123 recall. Not that it would matter because that happened so early on the car cycle that it was only measuring pent-up demand, not sustainable demand. This article isn't about just low order numbers, it's about whether Fisker was blaming A123 for the total failure. Even if you look at just the summary 'Executives at Fisker, which made the high-end Karma, started blaming A123 for its production issues late last year' you can see what is wrong. Fisker was blaming A123 for production problems and short supply. This is just nonsense. No, as to whether A123 problems scared off customers, I don't really think it mattered. The customer for these cars didn't really know what batteries were inside and I assure you they weren't worried about where they were going to get their 2nd battery pack from. Even if A123 was around, a replacement battery pack was going to cost several multiples (2-3x or more) of the bluebook value of the car by the time you got around to replacing it. I don't think the issue of what to do about pack replacement really factored into sales. But that is just my opinion.
      dlubeck_mbz
      • 1 Year Ago
      As much as I like the design of the car, I think what overall killed it was the management and their lack of experience. I think they were in it for the money, and from what I've heard, there were many, many overpaid executives and engineering managers. It's a shame that greed got in the way because, given some qualified leaders, I think they could have possibly succeeded. Not when it's about wining and dining and putting as much in your pocket as possible. It catches up with you - Karma!
        • 1 Hour Ago
        @dlubeck_mbz
        Yes I heard that too about the guys from Detroit- I believe they came from Chrysler and GM. Didnt they do the same to GM and then flew on private planes to ask for more from the Government. I heard that the Fisker CEO from GM Tony Posawatz was on the same tune/frequency and is now trying to steal the company with Bob Lutz. They GM folks ruined what was once an American dream.
      dlubeck_mbz
      • 1 Year Ago
      I wonder if the remaining executives are continuing to pay themselves the high salaries instead of using what''s left to pay back us tax payers. If that's what they're doing, shame on them! How many Fisker employees are needed to sell the company? I don't think it's over 10, especially since they've completed abandoned Karma owners.
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