Published on June 18th, 2013 | by Christopher DeMorro5
Fisker Lost $35,000 On Every Karma Sold
Why 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.