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.

About the Author

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.
  • Jeo

    Can the article author please clarify the difference between a government backed loan and the DOE holding back on $300 million dollars?

    • T Adkins

      Part of how a gov backed loan works is this. Private money is invested thru the gov to the company, if the company fails the gov eats a lot of the losses on the loan, if the company succeeds the gov loses nothing but it also gains nothing but the private money gets its money back plus interest, gov backing just means the private investment has less losses when things go bad. The Gov saw that Fisker already raised $800 million on its own and helped to set up additional gov backed loans to the tune of 529 million. Of that 529 they are holding back 336.

      So in this case there is no difference in the gov loan and the 300, the total is 529 they gave 193 of the 529 and are still holding on to 336. But that other 800 is no gov backed so if the company goes away the investors of the 800 will lose a lot of that, but until the gov gives the 336 it is holding it hasnt lost that 336.

      But as much as we love to hear and talk about gov spending and waste, just for scale we have been paying $20 Billion USD every year just for air conditioning for 2 wars, that is 20 billion with a B every year just for AC we wont see any of that back ever, 529 we might not lose at this point even if they fail we are out 193, or less than 2% of our AC cost per year. We have be in 2 wars for over 10 years so that number just for AC is over $200 Billion.


    • The government conditionally approved the entire loan, but receiving the remaining $336 million is conditioned on meeting milestones that, so far, Fisker has failed to achieve.

  • george

    Hey, I. Have an idea, how about letting the car company stand on its own without subsides. I think that the Obama administration should focus on paying the US Governments debt down instead of creating a $500 hammer or a car that no one can afford.

    • T Adkins

      It isnt a subsidy for the car company this time it is a “subsidy” for investors.


  • The fossil fuel money influence is in conflict with subsidizing hyper-efficient vehicles…. think about it.


    • RH

      I think not. There are plenty of other countervailing influences in other industries. People want to make a buck and if these companies were viable, private money would follow, which it has with some of these companies. By the way, these electric vehicles get their energy from what? Primarily fossil fuels, coal and gas. If we went all electric, the fossil fuel industry would do just fine. There are plenty of uses for fossil fuel. But why the obsession with fossil fuel anyway? Are we running out?

      • T Adkins

        If we go electric coal and Natural Gas would still be used, instead of oil, so oil companies in theory would lose money they wont go out of business most likely but their profits would be impacted. Then as we make the power grid cleaner coal and nat gas would be used less so even they would begin to lose money.

        If instead, we keep on the path of higher gas prices, coal may try to cut into the levels that oil can sell for once it gets to where they can make good money using the Fischer–Tropsch process to turn coal into motor fuel it is also almost to the point where using that process it cost effective for turning nat gas into motor fuel. But as we move to EVs if it moves oil and gas prices down even just a few dollars it becomes unprofitable for Canada to sell us tar sands oil.

        The theory is we will run out of oil at some point, but what is true is we are going to some extremes to get oil, it used to be that 1 unit of energy earned you 10 energy units of oil we are at the point where 1 unit for 3-4 units is the norm and we are looking to go down to 1 for 1.5-2 units. The closer we get to 1 to 1 the harder it is to get and the less profits are made. Big oil is used to making money a certain way and soon it will have to look at a new model.

        Just look at the mid-east they used to burn oil for power it is now becoming more cost effective for them to just sell all their oil and for them to move to nuclear for domestic power. Even Canadian tar sands is looking to use nuclear to boil water to wash the sand for the oil.


  • Colin

    Well said.

  • RH

    “Does everything have to have wide-reaching ramifications and political intent?”
    That’s the problem with government subsidy and involvement. It must, by definition, become political. Want to avoid politics in business and development. Keep the government out and it is no longer a political issue.

  • So we taxpayers are subsidising vehicles that cost $100,000 to buy. We are subsidizing luxury vehicles. How many Middle Income Americans can afford a $100,000 car?
    So, Obama wants to tax The Rich more, so he can build cars only The Rich can afford. Why don’t they just raise the price to $200,000 and we’ll keep the $500 Billion in tax money.

  • bgates

    “Does everything have to have wide-reaching ramifications and political intent?”
    If by “everything” you mean “expenditures of hundreds of millions of dollars by a government for political reasons”, then yes.

    “If anything, Obama needs to cut off Fisker’s funding and double down on Tesla.”
    I am pleased to take this opportunity to unveil a technology I have discovered by which you can transmit funds to companies, non-profits, or other entities which you hope will succeed. I call it “the envelope”.

  • TexEd

    Demorro, as a car guy, does a nice job. What we need, however, is a Washington insider who knows the folks involved. This is the Kenyan’s administration! Someone at Fisker has to be in bed with someone close to Bam or Biden or Feinstein or Pelosi or Holder or Geithner, etc. The first rule for these guys is “get your share NOW!”

    • “This is the Kenyan’s administration!” ?? What the everloving heck are you talking about? Forgive me for saying this if I’m missing something, but it sounds to me like you’re some kind of racist a**hole spreading your bulls*** on any site that’ll give you a forum. Please tell me I’m wrong?

    • Oh, lawdy – I just saw this guy’s screen name. “TexEd”? I’m really starting to think someone cut off this guy’s oxygen in the womb with his comments about the (admittedly corporatist) libs being somehow worse than the (closeted corporatist … also homosexual, in equal probability to their support for evangelical candidates in the 2012 elections) neocon tea-party wingunuts.

      • I agree with your suspicion of evangelicals and neocons. But you need to learn a little more about the Tea Party. They stand for fiscal conservatism, ending gov cronyism, and following the constitution, and their platform is neutral on both neocons or social conservatives.
        On Tex Ed, I dont agree with his Kenyan crack, but his statement that Obamas policy on who gets what gov loans is tainted by politics and political connections is all too true. If you dont recognize that Obama is deeply tainted by crony capitalism you are drinking the Kool Aid.

  • Jus7tme

    Tesla and Fisker and their ilk are useless. They will never be mass-market vehichles.

    What we need is a massive effort in diesel-electric hybrids. Even Mercedes, who is generally building wasteful “performance” cars, can get 56 mpg:

    “E 300 BlueTEC HYBRID. The 4-cylinder diesel engine of the E 300 BlueTEC
    HYBRID delivers 150 kW (204 hp) and 500 N·m (369 lb-ft) of torque,
    combined with an electric motor producing 20 kW and 250 N·m (184
    lb-ft). Preliminary fuel consumption rating is 4.2 L/100 km (56 mpg US).”

    Having 1% of the population driving electric cars is not a solution to oil waste. Having 50% of the population driving a diesel-hybrid that gets 60 mpg IS a solution.

    • T Adkins

      Well Tesla is newer to the car world than most, but they have made a +$100k car from never having made cars and in a few short months they will begin selling 6,000 cars that are priced between $40-80k all of which are spoken for and in a few short hours they will give a new/first look at their SUV the model X. We will find out the price and number on that soon. They have shown that they can make a more affordable car, after the SUV their 4th/5th car is to be more mass market. I use 4th/5th due to their redoing the roadster soon but I am not sure if the roadster is before the better priced EV. Tesla is also making EV parts for Toyota so Toyota thinks they have something to offer.

      But lets look at your 50% of the world’s cars getting 60mpg, while yes this would be better than making 1% go electric, a 1 to 50 ratio is very skewed. Lets take the car you propose and compare it to a car like the Leaf by Nissan. leaf gets 99 MPGe lets just call it 90 MPG driving habits will vary, 90 is already a 50% improvement in MPG over the other car, lets even argue that coal is just as dirty as gas/diesel it isnt but lets just say it is for the moment in the US lets say we get 35% of our electricity from cleaner than coal. Just with those numbers using the Leaf we have a car from a MPG and an emissions standpoint the is equal to 2.3 of the 60 MPG diesel. What does that mean well it means 21.7% of cars in the world have the sames emissions savings as switching 50% to a 60MPG car but that 21.7% looks great on paper and would have to take about 30% to equal the 50% only because at 21.7% there would still be 78% of cars not 50% on the other side of the scale.

      30% is a smaller number than 50% so it should be easier to reach and the cost saving for the use of EVs is amazing, compared to gas/diesel. The world is also pushing toward a cleaner grid and with clear electricity the cleaner the EVs get.
      I used the Leaf because it is currently available but around the corner is the T.27 which just last November as an EV got 350 MPGe in real world driving conditions and the maker believes people can sell the car for $18,000 USD and make a profit, with a estimated 110 mile range. Just from an MPG standard it is 3.5 time better than the Leaf and I have been saying that the Leaf from an emissions and MPG stand point is 2.3 time better than the 60 MPG diesel.

      People will argue the Leaf isnt for everyone Nissan knows this they arent marketing it to everyone they make that very clear.


      • The Tesla love is a little premature, I think. BUILDING 5000 cars is a lot harder than selling 5000 cars, with the level of tech Tesla is trying to make play nice. I hope they pull it off.

  • zefal

    I’ll add my “predictable cry for blood” here. After all, I’m just a mindless righty who puts no thought what so ever into these matters of government lard giveaways to politically connected companies. Unlike Christopher DeMorro who is mature and well reasoned. Please, Chris, tell me how I can become like you!

    • You’re already like Chris: oil companies get more gov’t subsidies in one month than all the clean energy companies will in one YEAR! Congratulations are in order: you’ve proven (once again) that the most ignorant people skew politically right these days.

      • PickWickian

        I suspect Jo Borras’ definition (and that of the 1000s of others that continue to parrot this claim ad infinitum around the internet) of ‘government subsidies’ is those same favorable tax treatment enjoyed by all US corporations. Your gripe is just that the amount of tax break ‘subsidies’ are largely tied to the amount of their revenues – not whether the Left views those corporations and their revenues as good or evil. Because oil companies have huge revenues their tax benefits are correspondingly huge. Conversely, the comparatively microscopic revenues of clean energy companies yield microscopic tax benefits… or ‘subsidies’ as you label them.

        NOTE: average oil company profit margins (i.e., the profit on every $ of sales) are like ~6.2% – ranking them #114 out of 215 industries by profit margin… right in the middle of all industries by profitability.

        • Nope – cute assumption, though. My definition includes THE ENTIRE US FOREIGN POLICY AND MILITARY BUDGET IN THE GULF ARENA, also, those 6.2% profits include bulls*** deductions on executive jets, crooked imminent domain deals, and the very best and brightest accountant money can buy. Finally, you can suck my b**ls with your “the Left” comments, and stare in mild shock at my REGISTERED REPUBLICAN STATUS. Not being a reactionary pseudo-hippy, in other words, doesn’t automatically make me a Kool-aid drinking, evangelical, oil-teat-suckling f***tard who believes everything I’m told as long as the guy telling it is waving a flag and/or Bible.

          Thanks for making me laugh, though, as only a Fox (Faux?) News addict can.

  • Kjell Bergh

    The problem with Tesla is that it is all-electric; when you are out of volts you are out of luck. It is time to call a flatbed, because the re-charge time away from high-voltage chargers is very long, even if you CAN get to a plug in. That is why hybrids like Fisker make much more sense. To get the max-range Tesla S ( also designed by Henrik Fisker), there is a price premium of $ 30 000, which as a function of the base price does not seem like a fair economic value.

    Another problem for Tesla is its business models, which calls for owning their own retail outlets, which is illegal for manufacturers in a whole lot of states, making service problematic. (Full disclosure: I own car dealerships, including

    • The problem with gasoline cars? When you’re out of gas, you’re out of luck – and it takes tens of millions of years to get more gas into the ground. That’s a ridiculous, self-serving argument (kudos to you, by the way, for outing yourself as a Fisker dealer). New wireless charging systems are being shown every day that allow quick-charging of cars like the Tesla and Leaf in minutes, not hours, and while the Fisker is VERY pretty, ol’ Henrik is a STYLIST. When we spoke to him at RENNtech back in ’06 and ’07 about building big HP Tramontos, we were explaining the ins and outs of the v1 digital lowering modules to him and Koehler on conference calls (this despite the fact that they were working with Kleemann already, who offered similar systems). I can’t believe that the braintrust behind that company could whip up a car that could compete with the Tesla roadster’s Lotus chassis, and the “current” Tesla sedan’s Daimler-influenced (read: W219) benefits just as much from that influence (and money) as the Roadster did.

      To be fair, though, Fisker did get an early look at the underpinnings of what would become the Model S back before they decided to build their hybrid, remember? SO, maybe they did get that sedan off on the right foot …

    • I guess Apple must be unviable, because they own their retail outlets too.

  • Mastro

    “But Fisker has broken a lot of promises, ”

    Am I missing something? They laid off 66 people – did they promise to never lay off anyone? It seems a trivial complaint- wake me when they lay off 10,000 like GM used to with days with the letter “R”.

    The 10,000 car forecast is more crazy than optimistic- but the private equity guys seem to think they are OK.

    Wake me when Chrysler asks for another bailout- sometime next year, I think

  • Jus7tme

    T Adkins,

    Two points:

    1. I have real trouble following your percentage calculations (am I the only one?), nit even sure what you are trying to say here. Please show your work and define what your claim is.

    2. You refer to MPGe. I don’t know if you realize, but MPGe is a completely useless (some would say fraudulently useless) measure because it is a “tank-to-wheel” (or rather “battery-to-wheel”) measure that does not account for the losses incurred in turning coal (which is what we use, realistically) into electricty at your charging station. First, there is only about a 0.33 efficiency in the power plant, and then about a 0.94 efficiency on the electric transmission grid. So the “well-to-battery” efficiency is only 0.33*0.94 = 0.312 or 31% overall efficiency. Hence the Nissan Leaf is really just getting 99MPGe*0.312= 30.7 MPG(real).

    The toy-sized car at is just a joke. It is in no way equivalent to a full size mercedes diesel hybrid that is getting 56 mpg.

  • T Adkins

    Gordon Murray has be an amazing car designer for some time I do believe he is very serious about his car designs you want to dismiss as a toy. That is fine he is merely a guy designing a car to a need mostly wasted space and weight for people who drive cars that seat 4-7 people but more than 90% of the time they carry just 1 person to work. It is all about what you need a car to do.

    You also dismissed Tesla and Fisker as useless I chose to argue the point. You used 1% EV to 50% Diesel hybrid.

    Lets start with #2 My not including how the power got to the batteries is the same as me asking you to include all the cost involved in oil the losses from the well to the refinery to the pump including transportation cost, regulation, military ships protecting shipping lanes tax subsidies for oil. I chose to dismiss that and mostly wanted to get to fuel in the cars and on the road. We have the MPG and the MPGe both are sloppy and there is no international standard, but here in the US we are told MPGe is ‘Miles per gallon equivalent’. So taking them as equal I bumped the 99 MPGe to 90 I left your bumped up 60MPG, I made my math easier at first. so 90 is 50% more than 60, so just for driving most person daily commute a Leaf at 90 MPGe is worth 1.5 of the car getting 60 MPG, about that point I left what I was typing and finished the rest of my grave shift, then came back to this and went to an emissions point. I apologize if that wasnt clear.

    So far just from an MPG standpoint 1.5 times improvement of the Leaf over the hybrid. point A to point B in a standard commute in the US. Cant find the chart I pulled the 35% from, but coal in the US emissions wise is cleaner than tailpipe from car emissions, I actually didnt want to look up how much cleaner so I made coal equal to car output. Hydro nuclear wind solar no green house emissions for producing power, chart I was using had 35% of that other stuff. So I went with a mile for mile driven is 35% cleaner then it met up with the 90 MPG, and well you got me it was late and my math was off. So instead of 2.3 it is 2.025 times improvement over the 60 MPG Diesel. So then on a cleaner drive mile to mile it would take 24.7% to equal the 50%’s reduction numbers. But as before Your 50% counter acted 50% of the 100% so now the 24.7% is stacked up against the remaining 75.3% of other cars so we have to bump up the EV to @34% to balance out the emissions of the now remaining 66% of other cars. Again the EV % is smaller than the hybrid % so I think it would be a better move to go to EV’s. If the % can go up even a point or 2 it would be even more of a cleaner world, or if the grid get cleaner and the signs show that it will, it gets cleaner.

    Coal is by far the bulk of power at least in the US but it is just less than half of what we use for electric generation. Using MPGe to MPG 90 is still 50% more than 60 so it would take less EVs that get 90 to get better MPG than the hybrid. IF it is just about oil waste, well if you want a car that use no Diesel of Gasoline in being driven EV’s wins out without fail.

    Again if the Leaf at 90-99 MPGe is in any way an improvement over a 60 MPG hybrid the by all means a toy or joke of a car that can carry 3 adults and get 350 MPGe should be a viable option, and they can travel with great head room and amazing leg room, park just about anywhere. EVs have just plain cheaper operating costs, there is no oil change, if it isnt water cooled the no radiator fluid issues no spark plug no real tune up in the traditional sense. Just have to replace some brakes but less often. Oh and replace tires. Then after 100,000 miles the battery.

    Tesla sold over 100 roadsters even at over $100k a pop they have 6000 Model S on order , Leaf has sold about 10,000. China has no end of EV’s. Then you have plug in Hybrids there are people who have basically done nearly all of their driving on the EV part of the car but they do have that gas option to feel safe.

    If you need an oil burner, toy maker Gordon has made a gas burner that get 96 MPG UK standards no lower case ‘e’ in there they were saying if he went diesel it could hit 131 MPG again no lower case ‘e’ and both option not a hybrid

    Hopefully that clears up some of my late night rambling.

  • So much for obamas public declaration.

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