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The Fisker Karma sedan
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By Patrick Rall Feb 15 2012 - 10:24am

The Fisker Karma production not dependent on DOE loans

Earlier this week, I had a chance to sit down with company founder and CEO Henrik Fisker where he explained that the production of the Fisker Karma (which is currently well under way) is not dependent on the US government money and the new flagship sedan is capable of “paying for itself”.
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Last week when it was announced that the US Department of Energy loans had been put on hold, many began to question the long term future of the Fisker brand. This was bolstered by the fact that the budding auto company halted their current work at the Delaware production facility where the upcoming compact currently named Project Nina has been taking place. Henrik Fisker explained to us that while the delay in receiving the Department of Energy loans had slowed things down, the current negotiations were agreed upon by both the DOE and Fisker, as the automaker works to come to terms with the feds on milestones on which to base the future of their loan agreement. Most importantly, Henrik Fisker stated that the continued production of their gorgeous Fisker Karma sedan is not dependent on these DOE loans as the sales of the Karma are allowing the new production model to pay for itself. In short, the money coming in from the early sales of the new Karma sedan have been enough money (coupled with investment funds, of course), to continue production of the extended range electric vehicle.

Henrik Fisker went on to explain the full situation behind the current DOE loan discussions. When the company first entered into the agreement with the US government, like many US federal business dealings, Fisker was given certain “milestones” that they were to meet in order to continue their acceptance of the DOE loans. (An example of government milestones are the requirements set forth to Fiat when they took over at Chrysler.) Fisker admitted that some of those milestones were overly ambitious and while business has been good for the new automaker, they weren’t able to meet some of those required measures. Because of the company falling short on some of those expectations, Fisker has entered into talks with the US Department of Energy to attempt to agree upon new milestones on which the future of the loans will be based.

Mr. Fisker didn’t go into any detail, but he also explained that there was a “Plan B” for their financial future in case talks with the US government run long. However, the most important fact mentioned by Henrik Fisker during our discussion with him was that the Fisker Karma, which is currently heading to dealerships around the world, is bringing in enough money to cover the costs incurred by producing and selling the cars.

The Department of Energy loans aren’t crucial to the company’s future at this point but an extra $400 million would go a long way in bringing along the upcoming Project Nina – which is planned to be built at Fisker’s production facility in Delaware. The Nina is expected to be a compact sedan based on a similar drivetrain architecture to that found in the Fisker Karma but the Nina is expected to be a little easier on the budget than the $100k+ super luxury Karma sedan.

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Comments

BJ wrote on February 15, 2012 - 1:30pm
As an owner of a Fisker Karma it's been troubling to read all of the reports of Fisker's DOE loan woes, especially when amplified by election year politics. It's gratifying to know that reports of Fisker's demise have been greatly exaggerated. I can say with certainty that they produce a fantastic car. It's smart, beautiful and innovative. It's also an amazing conversation starter. It's not flawless - there are a number of issues that Fisker has addressed or is addressing - but the overall ownership experience has been great. I'm proud to support a new company that's willing to try something hard. BJ
AlexofSB wrote on February 15, 2012 - 7:17pm
As another FIsker Karma owner and having driven the car just over 1000 miles in 5 weeks, I would totally agree with the previous comments. Seems like the press wants to jump on anything slightly negative and make a mountain out of it. The car is truly gorgeous, a show-stopper, performs and drives flawlessly. I have never been so 'jazzed' with a new car as this one which includes ownership of nearly all BMW models over the past 30 years. I have been able to do trips around town of 30-40 miles using only electrical power. To date, including 5 longer trips of 100 miles each, I have only added 10 gallons of gasoline! That's averaging about 100 mpg! For a luxurious and silent sports car with 4 doors and not seeing myself coming around every corner, there is no other automobile like it. I love it. Nearly unbelievable, Mr. Fisker personally telephoned me when they were experiencing some initial issues, but his company has given outstanding support to my local dealer and I have nothing but praise for this new car company.
Aaron Turpen wrote on February 15, 2012 - 8:53pm
Although I don't own a Karma and probably will never afford one, I have been a fan of them from the beginning. They are stylish, beautiful cars with a lot of technology going on underneath those great looks. Unlike the Volt, the Karma was said from the beginning to be a vehicle for people of means, not for "the masses" as GM pretended. Having seen one in person (alas! never driven) and talked briefly with Fisker himself, I definitely think it's a car that will be remembered.
Anonymous wrote on February 16, 2012 - 8:56am
can you fisker owners that paid $100000 for your fisker please send me the $100000 of my money that the government gave fisker to build that car for you? When Fisker goes belly up and doesn't pay back my money can all 300 of you each pay up the million you owe the American people for the frivolous car paid for by the American people?
Don Bain wrote on February 19, 2012 - 10:09pm
So I guess progress makes no sense. Why don't you try to get your money back from Lehman Bros. or Goldman Sachs? The auto business is what's bringing this economy back around - not the investment bankers, mortgagers, insurance firms or credit companies. All of these stole from you, not the government.