Anyone that has watched either the auto industry or technology startups knows how hard it is to achieve profitability. Blend the two together and you more often than not have a recipe for financial disaster. We've seen far more aspiring EV makers go belly up than actually deliver product. Even well-financed companies like Tesla have been on the brink. Aside from Tesla, the other startup with the deepest pockets is Fisker Automotive with money from venture capital firms like Kleiner Perkins and others.
Fisker hopes to reach profitability by 2011 with a sales target of 15,000 cars a year. The company claims to have a break even point of 5,000 sales a year, so if they get anywhere close to the target, profits should be rolling in. However, as much as we like the Karma – and it certainly is a much more practical alternative than the Tesla Roadster – we remain skeptical. First, we have to wonder if there is a market for anything close to 15,000 Karmas a year at a price point close to $100,000. We also remain dubious of the profit potential given that engines will be shipped from the U.S. to Finland, where the car is to be built, with the completed cars then coming back to North America. Finally, Fisker apparently still has only about 1,400 orders for the car – barely more than the 1,300 reported last January. If the economy continues to languish, Fisker could have a hard time moving 5,000 Karmas, much less three times that. Best of luck to Fisker – they are going to need it.