If you have been following the trends in hybrid cars and all-electric cars, you probably think of Tesla Motors Inc. (NASDAQ: TSLA) as the winner in the high-performance electric car market. You would be correct. Then there is also the Fisker Karma, at least for now.
The Fisker Karma is a sleek car that looks something in between a sedan and a futuristic sports car. While many of the more mass market electric and hybrid cars are so ugly that you wonder if they deter environmentally friendly consumers, the Karma is truly a good looking car. The problem is that Fisker has been troubled from nearly the start and now it looks like it is about to implode.
Tesla had many pre-orders and now the company has even gone on to embark on a lease or lease-to-buy effort with the same depreciation scale as the Mercedes S class. Fisker was never so lucky and management has been lacking here to say the least. Oh, and the company is going to have an ever harder time ahead with bad PR as the taxpayer is likely going to be on the hook here.
Fisker has what looks to be a total of $192 million in loans from the Department of Energy under the Advanced Technology Vehicles Manufacturing Loan Program. We don’t have an exact figure of what is due this month, but the company has furloughed employees and has a loan repayment due in late April. Fisker has even warned that it may seek bankruptcy protection if it cannot secure financing.
To make matters worse, the company has sold only close to 2,000 cars and it has reportedly not even built a car since last July. If you have followed the Fisker saga here, its primary battery supplier is A123 Systems and A123 did such a great job of managing itself that it went bankrupt and was acquired by the Wanxiang Group in China.
Even hiring the former Chrysler president Tom Lasorda last year did not help. He left the company just after a few months and the story was that he did not think the mess could be cleaned up there. Oh, and the founder Henrik Fisker has stepped down as Chairman due to differences with management’s strategy after a DOE loan freeze and talks to sell a majority stake to Chinese bidders.
Can you imagine spending $105,000 to $110,000 for a car that is likely to not be on the road for very long? What were people thinking when they bought these cars? Maybe the hope was that the Karma would get a Delorian-like comeback as a time machine car in the movies. At least Tesla was full of orders before they started production.
The Tesla Model S sedan has now exceeded sales of 4,750 units and the company is currently profitable. The company’s latest release shows that it has delivered almost 10,000 electric vehicles to customers in 31 countries.
Tesla now has an easy way for buyers to know how they will proceed forward. Fisker buyers now have to not only wonder what they were thinking when they bought the car, but how they will resell the cars down the road (out of their garage). AutoTrader.com currently has 74 listings in the U.S. for used Fisker cars, with the lowest price for a 2012 model being about $69,000 for the car with less than 7,000 miles on it. Imagine how low those prices will get after this year if there are no Fiskers made again.
Fisker is shaping up to be a very costly consumer experiment. With the taxpayer being on the hook, Fisker is turning out to be for electric vehicles what Solyndra was for solar.