Fisker Automotive: The Rise and Decline of an American Electric Car Maker

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Fisker Automotive: The Rise and Decline of an American Electric Car Maker

It’s no secret Fisker Automotive is in trouble. The maker of premium electric cars is clinging to life by its fingernails. One more setback could send them plummeting into the fiery abyss of financial ruin. Still, even if they roll snake eyes the firm’s founder has more than a few thoughts on what future transportation will be like.

Henrik Fisker is the CEO and lead designer at the company that bears his name. Recently he spoke at a Chicago Auto Show luncheon and during his presentation he revealed some fascinating insights about Fisker Automotive and the car business in general.

SEE ALSO: Fisker Seeks Partner After Tumultuous Year

But interesting observations cannot change the current state of affairs, nor can they eliminate the challenges facing his company. Fisker is in trouble, deep trouble. As reported right here on AutoGuide, they haven’t built a single car in six months, the low-interest loans provided by the U.S. Department of Energy (DOE) have been frozen and their battery supplier, A123 recently went bankrupt. On top of all that their range-extended-electric Karma sedan has had technical issues including fires.

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To combat this steaming pile of bad news, the company is desperately looking for a partner. It’s been reported management is even trying to shack up with the Chinese who have been on a buying spree lately. When asked if he could comment on this topic Fisker said “absolutely not.” His response seems to imply that top-secret, closed-door discussions are underway, but who knows.

BAD KARMA

Perhaps the company was born under a bad star. Looking back, it was founded in 2007 on the eve of the big recession, not exactly an auspicious time to start a business. Almost immediately the company had to react to the devastating economic decline. He said, “(In 2008 we) went into almost hibernation mode.” Despite the challenges, Fisker (the man) was able to drum up more than $1 billion to kick-start operations.

But Fisker didn’t just want to build cars; as he put it, lots of companies already do that. “Where is the white space?” he asked. The answer, to him, was an unlikely place: sustainable luxury vehicles.

images\Fisker_205_1_1.jpgThis nascent sliver of the market is an interesting segment to bet on, but according to Fisker there are “enough different models to choose from” today. He also said the world doesn’t need another conventional car and that the luxury-electric segment is smaller and easier to compete in.

“How do you go up against all of these big brands? How do you go up against Coca-Cola?” he said during his roughly half-hour-long speech. Unfazed by the seemingly insurmountable task of starting a brand-new car company he concluded, “It is possible to challenge the big, established brands.”

He cited companies like Red Bull, Dyson and Virgin Atlantic, firms that are directly competing with monolithic corporations like Coca-Cola, Hoover and British Airways. To him, creating a new car company from scratch was challenging, but possible.

THE REAR-VIEW MIRROR

What makes it so hard to get started in the car business? Fisker touched on many of the difficulties facing automotive entrepreneurs. One major hurdle they have to clear is government regulation, which isn’t necessarily a problem on its own, but it takes a literal dumpster-load of cash to meet safety and emissions standards.

To start a new car brand he said, “you need hundreds of millions (of dollars),” hardly chump change. Of that money tens of millions get eaten up just meeting regulations. The best way to make a small fortune in the automotive industry is to start with a large fortune.

Another monumental problem established brands don’t have to deal with is creating a dealer network. “We need to think about building an infrastructure,” Fisker said.

THE ROAD AHEAD

With the four-door Karma, Fisker wanted to build a really special car, something different. He said people tend to get excited about vehicles from the 1950s and ‘60s because of their design. In keeping with that he said, “We made a car that was a lot more sculpted, a lot lower.”

With classic rear-wheel-drive proportions the Karma is certainly an attractive vehicle. And it’s got the brawn to match its beauty. Under the custom coachwork lurks a lithium-ion battery pack and an electric motor capable of delivering 959 lb-ft of torque to the tires! A small gasoline engine works as a range extender. It can power the car when the battery is depleted. Think of the Karma as a platinum-edition Chevy Volt.

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Moving inside, the cabin is trimmed with what Fisker referred to as “antique wood.” The use of reclaimed timber means no trees were harvested to spruce up the car’s interior (no pun intended, either).

When asked if the company would ever build non-electric cars, cars powered exclusively by internal-combustion engines Fisker said no way. He’s focused on EVs, which he believes are the future.

Despite the company’s tenuous position Fisker seems optimistic about what’s ahead. He mentioned the environmental minister of Saudi Arabia owns a Karma and they aren’t even sold there. Additionally, when the first Fisker dealership opened in Dubai they delivered 12 cars on day one.

“In the future we’re still going to have sexy, beautiful cars” he said. But what’s unclear at this time is whether Fisker Automotive will be a part of that future.

GALLERY: 2012 Fisker Karma

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Discuss this story at FiskerBuzz.com

  • http://pulse.yahoo.com/_IC2PSZ24AJKRLVTTQHBTBTPKUU Joe

    Damn, I was ready to buy when production stopped.  And I will when it restarts.

  • Glenn Rebechin

    I Love my Fisker…I hope the company makes it…..But like Henrik, I have my doubts.

  • Mmobley

    You misread the quote.  Henrik did not indicate that he had doubts, the author of the article did.  Look at the quotation marks.  I love my inferno red karma and drive it daily.

  • Former Fisker Engineer

    Having been on the inside during development, I’m surprised they made it this far.  We could have had this car out in early 2010 had it not been for poor management at the executive level.  Fisker and Koehler bought in too many “friends” and too few real engineers.  More money was spent flying around the globe sellilng their “vision”.  This car is as American as Mao Tse Tung is.  There are many other cars out there with FAR better quality and fewer Chinese made parts.

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