Auto industry fisker-oops

Published on June 18th, 2013 | by Christopher DeMorro

5

Fisker Lost $35,000 On Every Karma Sold

fisker-oopsWhy did Fisker Automotive fail? There are plenty of reasons, though newly revealed internal documents reveal the biggest reason of all. The only product Fisker sold, the Karma sedan, cost the company $35,000 more than they sold it for. Add to that lavish spending by executives and costly engineering mistakes, and you have a company that was doomed to fail from the beginning.

Despite raising $1.4 billion in private and public venture capital, Fisker sourced many parts from third-party suppliers, driving up production costs substantially. The complicated plug-in drivetrain and battery pack further drove prices upward, and despite costing $95,900 each, a Fisker executive claims the company lost $35,000 per car. How did the company ever plan on turning a profit when they sold their vehicles at a huge loss?

Because Fisker sourced many parts from other suppliers, when the anticipated production volume didn’t turn up, prices continued to climb. Despite anticipating 15,000 annual sales in 2012, Fisker built less than 2,500 vehicles total. And the problems just kept compounding.

Is it any wonder then that no company wants to buy what is left of Fisker, except maybe for pennies on the dollar? Nice try Henrik, but this is one car company that never really had a chance.

Source: Reuters



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About the Author

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



  • Jason Carpp

    That doesn’t make sense. For an American-based company, shouldn’t they have gotten the parts from the United States? That’s what I would’ve done. Or at least from a country that knows how to build quality parts.

    • steve

      The Reuters article is the most misleading Detroit mafia story. It tries to potray Henrik Fisker as the Danish alien dude who stole money from US Government. It is full of ethnic discrimination. When did getting a salary become lavish!!!

  • Peter Einstein

    All the so-called experts who have been piling on Fisker (both the company and the man) as a result of this ridiculous analysis will look pretty silly when Henrik and Richard Li turn the company around and launch the Atlantic in a few years. If the DoE hadn’t cut off their access to funds they were depending on simply because they missed some totally unrealistic benchmarks forced on them by the DoE (delays caused in large part by long delays in certification by the EPA )…and if they hadn’t had to deal with faulty parts from third-party manufacturers, including their battery maker…Fisker would be giving Tesla a run for its money. And they still might.

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