It’s Time To Pull The Plug On Fisker

Does everything have to have wide-reaching ramifications and political intent? These days that seems to be the case. Last night it was reported that Fisker, builder of the sleek-yet-expensive “subcompact” Karma sedan has laid off some 66 workers, and the predictable cries for blood from the right, and mis-guided defense of all things green from the left were out in full force. It’s all become a bunch of blah blah blah, and honestly, I think it’s time to pull the plug on Fisker’s government loans.

The background; Fisker won $529 million in government-backed loans, of which it has only gotten $193 million. Most of that went towards the Karma sedan, which has plenty of shortcomings including; a high price, poor gas mileage, two recalls (battery leakage and software upgrade) and a sub-compact classification on account of its limited interior room.

Sure, the car looks good, and by many accounts is fast and fun to drive. But let’s look at the facts here folks; the Karma has a very narrow appeal for a very elite buyer list, and yet Fisker expects to sell 10,000 of these in 2012. I’ll be surprised if they sell half of that.

Now the DOE is holding back the next $336 million or so, most of which was earmarked for Fisker’s next vehicle, the Nina sedan which was supposed to be built at GM’s old Wilmington, Delaware factory. 26 of the laid-off workers were from the Wilmington factory, which has just finished phase 1 of its transformation for Nina production. There were 100 people employed at the factory.

The other 40 people were laid off from Fisker’s California headquarters, which had employed 650 people, reports Automotive News. That’s less than 10% of their workforce, and if they do get the DOE loan, those people will probably be re-hired pretty quickly.

It’s also important to note that Fisker has also attracted $866 million in private investment, including some $300 million just last month. Given the current political climate though, one has to ask; should we really be subsidizing $100,000 subcompacts that get 20 mpg and goes just 32 miles in EV mode? The Nina Sedan is supposed to be cheaper, but cheaper is a relative term; most Americans can’t afford the $49,900 Tesla Model S sedan, which is half the price of Tesla’s other car, the Roadster.

If anything, Obama needs to cut off Fisker’s funding and double down on Tesla. I know that sounds harsh, but so far Tesla is the only company with the means to build electric cars with the range and performance of conventional gas-powered cars. And given the very public downfalls of other government-backed green energy companies like Solyndra, Ener1, and Th!nk during an election cycle, I think there is a very valid argument to be made for tightening restrictions and pulling funding from those who don’t perform. Fisker didn’t meet the mark; I don’t think they should get the money.

That said, I’m not all that worried about Fisker either. They’ve attracted a lot of private money, which hopefully means that the Nina is as far as long as they say, and their business plan looks sound to the money people.

But Fisker has broken a lot of promises, and there are only so many lies a guy can forgive, no matter how pretty the lie may be.

 

Christopher DeMorro

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.