With his company about to announce its first U.S. plant in Delaware, CEO Henrik Fisker was in high spirits and high demand at last week's Business of Plugging In conference in Detroit. We were able to pull the busy man aside for a few minutes to ask for more information on how his company plans to make money – will they really find 5,000+ people willing to pay $89,000 for the Karma plug-in hybrid? – and how the unusual development path that the Karma has been on has been good for the small automaker. Get the details after the jump.
First things first. Getting a bunch of money from the government helps Fisker out a lot. Fisker said the $528 million DOE loan that Fisker secured means that Project Nina, the next car the company will build, a lower-cost plug-in hybrid, gets started about three years earlier than it would have otherwise happened.
On its own, though, Fisker will be profitable in 2011, he said, because Fisker has a different business model and structure than other automakers that need to sell a lot of cars to make money. Fisker said the way the Karma was developed, the company's low overhead and outsourcing the production of the company's first car are the three main reasons that his company can be profitable with low sales numbers.
While Fisker has figured out it can make money selling just 5,000 Karmas a year, the company is expecting more sales than that. Why? Because they have not yet begun to try and sell the car. In January, the company said it had 1,300 pre-orders. Now the number had grown to 1,500. Undaunted by only 200 more people signing up for his car in the last ten months, Fisker said that all the pre-orders have come without a dealer network or a big advertising push:
Thus far, the Karma has only been seen moving on its own power once – in August at Laguna Seca – and that first public drive was a chance to show people that the car is ready. Fisker is developing the Karma in a different way than the OEMs, Fisker said, and it doesn't give the company much to show off to the media as there is using the traditional model. Currently, there are seven prototypes running around without the skin and the Q-Drive powertrains are also being tested in some trucks. None of these mules are great for PR work. Things will change about the middle of next year, Fisker said, as the media will be invited to drive the first Karmas in May or June of 2010. Our inbox is open.
Listen to Fisker here (download here, 5 min. 2 MB):
First things first. Getting a bunch of money from the government helps Fisker out a lot. Fisker said the $528 million DOE loan that Fisker secured means that Project Nina, the next car the company will build, a lower-cost plug-in hybrid, gets started about three years earlier than it would have otherwise happened.
On its own, though, Fisker will be profitable in 2011, he said, because Fisker has a different business model and structure than other automakers that need to sell a lot of cars to make money. Fisker said the way the Karma was developed, the company's low overhead and outsourcing the production of the company's first car are the three main reasons that his company can be profitable with low sales numbers.
While Fisker has figured out it can make money selling just 5,000 Karmas a year, the company is expecting more sales than that. Why? Because they have not yet begun to try and sell the car. In January, the company said it had 1,300 pre-orders. Now the number had grown to 1,500. Undaunted by only 200 more people signing up for his car in the last ten months, Fisker said that all the pre-orders have come without a dealer network or a big advertising push:
It's very encouraging that we have that many people who already did that, with a new brand, a new car and for $87,000. Once we get the dealer network up and running, which should happen by the second quarter of next year, in terms of having showrooms and everything else, that puts everything in a completely different perspective because now you have people walking into a showroom and taking a test drive.
Thus far, the Karma has only been seen moving on its own power once – in August at Laguna Seca – and that first public drive was a chance to show people that the car is ready. Fisker is developing the Karma in a different way than the OEMs, Fisker said, and it doesn't give the company much to show off to the media as there is using the traditional model. Currently, there are seven prototypes running around without the skin and the Q-Drive powertrains are also being tested in some trucks. None of these mules are great for PR work. Things will change about the middle of next year, Fisker said, as the media will be invited to drive the first Karmas in May or June of 2010. Our inbox is open.
Listen to Fisker here (download here, 5 min. 2 MB):
The video meant to be presented here is no longer available. Sorry for the inconvenience.
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