Fisker spent $600K for every car it sold, skids toward bankruptcy

posted at 10:01 pm on April 22, 2013 by Mary Katharine Ham

$1.3 billion in venture capital and taxpayer funds, and they spent $600,000 per $100,000 car they sold. What an investment!

Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report…

The Anaheim, California-based company made about 2,500 of its $103,000 Karmas before halting production last year, disrupting its plans to use a $529 million U.S. loan to restart a shuttered Delaware factory owned by the predecessor of General Motors Co. (GM) The Karma was assembled in Finland.

Fisker was allowed to keep using money from its Energy Department loan after violating its terms multiple times, according to a report released April 17 by PrivCo, a New York- based researcher specializing in closely held companies. It said it based its report on documents, including the loan agreement, obtained through the U.S. Freedom of Information Act.

A brief history of this investment:

Fisker is an electric car company, founded in 2007, which holds the dubious distinction of producing the only car to ever break down during its Consumer Reports test drive. It was supposed to be an American leader in new technologies, with a revamped factory in Delaware and all the jobs that come with it. It ended up producing cars in Finland— cars that caught on fire and konked out due to the company’s use of faulty batteries from another taxpayer-funded company, A123. Facing recalls and possible bankruptcy, Fisker’s CEO Henrik Fisker stepped down while the company searched for buyers. All this colossal failure could be chalked up to doing business in new technologies if it had been done with the $1 billion or so in private funding Fisker got. Sadly, the company also blew through $193 million from us, via the Department of Energy, which is now giving pause to the Chinese companies looking to buy it. Stimulus!

Fisker has been heading toward bankruptcy for several months, laying off employees, and missing payments to the Department of Energy on its way. The Obama administration seized $21 million from the company this week to satisfy its loan agreement, allowing the Fisker to escape expected bankruptcy for a little while longer.

The Obama administration says it has seized $21 million from troubled automaker Fisker Automotive Inc., just weeks after the company laid off three-fourths of its workers in Finland amid continuing financial and production problems.

Fisker had received $192 million in federal loans before a series of problems led U.S. officials to freeze the loan in 2011.

In a statement Monday, the Energy Department says it recovered money from the company’s approximately $21 million reserve account, which was set up as part of the initial loan commitment in 2009.

The US Government had planned the company would at one point create 2000 jobs and make 100,000 cars a year, but by the end of 2012 Fisker claimed only 1,800 cars had been delivered.

Only $170 million or so to go! I’m sure this will work out swimmingly for all of us.

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Comment pages: 1 2

Ms. Ham, the Chinese are spending a ton on subsidizing their renewable energy sector. Should the US just stand by and let the Chinese dominate the renewable sector?

nonpartisan on April 22, 2013 at 10:12 PM

China spent 52 billion, we spent 51.

Let them burn their money. Capitalism is superior to a command economy. We will win.

jhffmn on April 23, 2013 at 12:37 AM

Fisker Grifter spent $600K for every car it sold, skids toward bankruptcy

forest on April 23, 2013 at 12:41 AM

Didn’t these suckers suffer from spontaneous combustion? They make Pintos look like a deal.

Cindy Munford on April 23, 2013 at 12:49 AM

Someone somewhere at Tesla Motors is laughing their butts off right now.

TMOverbeck on April 22, 2013 at 11:02 PM

Doubt it. Their annual report shows mounting losses. They have spent all of the $465M the FFB and DOE lent them.

Speaking of DOE loans, take a look at the other things they are betting on.

The real value in electric cars will be in the collectible market.

virgo on April 23, 2013 at 2:26 AM

Fisker spent $600K for every car it sold, skids toward bankruptcy

Liberal eco-fools “feel” good about electric cars and that should make them a success, but in the real world you can’t spend $600K building a car and then sell it for “only” $100K. Math is hard for liberals, they really should let someone else figure these complicated things out for them.

RJL on April 23, 2013 at 2:51 AM

Ms. Ham, the Chinese are spending a ton on subsidizing their renewable energy sector. Should the US just stand by and let the Chinese dominate the renewable sector?

nonpartisan on April 22, 2013 at 10:12 PM

If by “dominate,” you mean “waste hundreds of billions on random boondoggles,” then the answer is an emphatic YES.

Not to mention that it’s just false to label electric cars as “green.”

Doomberg on April 23, 2013 at 4:55 AM

So,
The Liberal formula for Personal Wealth:

Start up a “green” company that can’t attract many investors.
Get a government loan, because, you know, “green.”
….
Profit! (by going bankrupt, after stashing as much away as possible.)

Get gov’t green by pretending to be making something green.

OK, so now that we know the formula…let’s get green!

ProfShadow on April 23, 2013 at 6:06 AM

But Fisker meant well. And they feel better about the planet.

How can you put a price tag on that, Mary?! *sniffle

locomotivebreath1901 on April 23, 2013 at 6:10 AM

Not to worry. Mr. Delorean Fisker can become a sleazy Democrat bundler and the loan will be forgiven.

MNHawk on April 23, 2013 at 7:29 AM

Ms. Ham, the Chinese are spending a ton on subsidizing their renewable energy sector. Should the US just stand by and let the Chinese throw away their money on their own?

Cowardly Leftist on April 22, 2013 at 10:12 PM

Yes.

MNHawk on April 23, 2013 at 7:30 AM

Fisker spent $600K for every car it sold, skids toward bankruptcy

So I’m guessing that they were not selling $600K cars.

Happy Nomad on April 23, 2013 at 7:52 AM

but…but he won

he won not once

he won every time he ran

so your statement would be false

nonpartisan on April 22, 2013 at 10:29 PM

Gained his first office by using procedural rules to get all his opponents disqualified.

Was elected to the Senate by running basically unopposed in a state where a dead horse could get elected as a Democrat.

eon on April 22, 2013 at 10:37 PM

Plus he lost to Bobby Rush, so nonpartisan’s statement is wrong on its face.

ddrintn on April 23, 2013 at 7:58 AM

Ms. Ham, the Chinese are spending a ton on subsidizing their renewable energy sector. Should the US just stand by and let the Chinese dominate the renewable sector?

nonpartisan on April 22, 2013 at 10:12 PM

These vehicles are not energy producers but energy consumers.

Thus they are not part of any ‘renewable’ sector, save for the scrap metal industry. They can ‘renew’ the vehicles through a suitable application of a few thousands of degrees of heat. That is an energy intensive industry, btw, and a necessary one.

Crystalline PV cells cost way too much and barely compete with the various plant-based systems for liquid fuels on the conversion of solar energy to useful product: ~10% conversion rate. The best biofuel producer is corn to ethanol coming in just over 9%. You can get a tiny bit more burning the none-useful parts of the plant.

Algae to oil is an energy recapture system for industrial purposes, and gets about… 10% of waste heat conversion.

Thin film, amorphous silicon that is printed is very, very cheap and that production facility in CA is back-ordered for a decade… yet its cells produce approx. ~6% of solar energy to electrical energy.

Want a better energy infrastructure that can operate more efficiently? There are things you can back:

- Room temperature superconductive materials research. Even get it to liquid air temps with high current capacity and you have a clear alternative to copper long lines. If you can get them to high density energy storage, you then have a way to store electricity during peak production periods and put it into use when it is needed. China ain’t bankrolling this stuff. NO ONE IS as it isn’t even in the lab… YET.

- A robust private space program to create the infrastructure to utilize kilometers of solar collectors in orbit and beam the energy down to earth as low density microwaves over a few hundred acres. You can farm under the receiving array and yet the cost per kWh is unbeatable once you get the production and mining system in-place… and you need a lunar mine for that. This gets heavy industry AND energy production out of the active bio-sphere. NOTHING ON EARTH WILL BEAT THAT. Want to ‘save the planet from fossil fuels’? Why are you not backing a strong space program by private concerns? The energy is ‘free’, the overhead is low but has a high capital up-front cost and a guaranteed return on investment over decades. Since square footage of collection space is cheap to get at that point, you make up for inefficiencies in pure volume. That was all scoped out using late 1960′s technology, but the ‘Green Movement’ doesn’t want cheap energy and a shift of industrial production off-planet. I’m all for it.

- How about a materials X-Prize challenge to get a solar collection system that can get, oh, 35% efficiency in conversion ratio of energy in to useful energy out? An internal combustion engine does about that with any fuel you can name: it is more efficient in converting stored energy to useful energy than any ‘renewable’ is converting captured or re-captured energy to useful energy. Set the IC as the gold standard on energy conversion and find something that measures up in the generation end – because the IC is hard to beat as a system. That system includes finding oil, refining it, transporting it, distributing it, and then using it. Solar can’t touch the stuff with a measly 10% conversion ratio, and then you only have electricity which must go over high tension lines and lose a few percent in transmission, conversion and then storage in your end-site, then another few percent to be made to do something useful.

‘Renewables’ are niche products, at best: for places where you can’t get long-line transmission, where you can’t get fuel delivered, where it is physically impossible to run anything else. You can run a warehouse with cooling system on thin-film, printed panels all over its roof, if its about a half-acre in size for your foot-print of collection, and then scales just fine up from there.

There is no ‘magic bullet’ to energy. I’m more than fine to let China waste money on producing lower marginal cost goods by exploiting their workforce, utilizing labor until it dies, housing such labor in barracks, and then giving out a median wage of $6/week. Plus they don’t have pollution controls, and that makes some parts of China disappear under a haze of pollution. You want to tout China? They cannot compete on clean production with decent labor rates, living conditions, and health. You want to EMULATE THEM and make America look like China? You do know that there is a dustbowl going on in China, right? That it’s crony system of capital use makes the worst of our cronies seem like pikers. How much fascism are you willing to endorse to get to your dream of ‘renewables’? I want NONE OF IT and offer alternative paths for free enterprise and ways to support research that ONLY supports research and lets others find good ways to produce things at a lower cost for all concerned… and what you get with Chinese cheap goods has a cost to it, you just don’t get to see the human misery involved.

ajacksonian on April 23, 2013 at 8:05 AM

Ms. Ham, the Chinese are spending a ton on subsidizing their renewable energy sector. Should the US just stand by and let the Chinese dominate the renewable sector?

nonpartisan on April 22, 2013 at 10:12 PM

does that frighten you? are you running for your life yet?
idiot.

dmacleo on April 23, 2013 at 8:18 AM

I guess I’ll just have to buy a Tesla now…

PatriotRider on April 23, 2013 at 8:44 AM

The whole thing was a giant ego trip for Henrik Fisker; the guy is a designer, and never had any business building cars.

Ward Cleaver on April 23, 2013 at 9:02 AM

Comment from my niece in reference to the dismal green-tech company track record obama has.

“It’s worth it to me and the environment that they’re at least trying. We don’t need results every time. We just need to keep moving in a green direction until something works.”

hawkdriver on April 23, 2013 at 9:15 AM

Ms. Ham, the Chinese are spending a ton on subsidizing their renewable energy military sector. Should the US just stand by and let the Chinese dominate the renewable military sector?

nonpartisan on April 22, 2013 at 10:12 PM

Hell No!

BobMbx on April 23, 2013 at 9:35 AM

There is no ‘magic bullet’ to energy.

Di-lithium baby. Its the future.

BobMbx on April 23, 2013 at 9:37 AM

They should sieze all the cars, then sell them to terrorist organizations all over the world. Solve two problems with one faulty battery.

GWB on April 23, 2013 at 11:17 AM

An internal combustion engine does about that with any fuel you can name: it is more efficient in converting stored energy to useful energy than any ‘renewable’ is converting captured or re-captured energy to useful energy.

But the Fisker also has internal combustion–in the battery!

F(r)isker of taxpayers made for bad Karma.

Steve Z on April 23, 2013 at 12:04 PM

Comment from my niece in reference to the dismal green-tech company track record obama has.

“It’s worth it to me and the environment that they’re at least trying. We don’t need results every time. We just need to keep moving in a green direction until something works.”

hawkdriver on April 23, 2013 at 9:15 AM

Uncle Hawkdriver needs to tell her to throw her own green(backs) at these problems, not ours. Will she buy a Karma for $600K?

Toyota manages to build and sell a lot of 45-mpg hybrid Priuses, and the government never subsidized them. If it works, and it can sell, private industry will invest in it.

Steve Z on April 23, 2013 at 12:14 PM

Uncle Hawkdriver needs to tell her to throw her own green(backs) at these problems, not ours. Will she buy a Karma for $600K?
Steve Z on April 23, 2013 at 12:14 PM

Slap a Lamborghini name plate on that sucker, and maybe they could actually sell them for the $600K production cost…..
Call it a green Lambo and the Hollyweird crowd would be all over it – maybe even at a profit bearing price….

dentarthurdent on April 23, 2013 at 12:29 PM

Comment from my niece in reference to the dismal green-tech company track record obama has.

“It’s worth it to me and the environment that they’re at least trying. We don’t need results every time. We just need to keep moving in a green direction until something works.”

hawkdriver on April 23, 2013 at 9:15 AM

Be sure to tell her that you hope she has a lot of money because the $500k per car loss and all the other greenie frauds are coming out of her pocket one way or another.

RJL on April 23, 2013 at 2:21 PM

So each car netted -$500,000?

GE is alive but Bin Laden is dead!

CrustyB on April 23, 2013 at 4:54 PM

Fiskars makes good scissors…. Full Stop.

It only makes sense that when when they decided to make cars Barf Boy thought he should throw our money at them.

Cody1991 on April 22, 2013 at 10:19 PM

Not the same company, Cody.

Sadly, Fiskars now makes a lot of their cutlery in China.

BillH on April 23, 2013 at 5:28 PM

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