Battery-car start-up Fisker Automotive has entered a critical stage in its short life, the plug-in hybrid maker working feverishly to firm up an alliance strategy that could team it up with one or more well-funded partners – and, in the process, allow it to move ahead with the launch of its second product line.
In the meantime, Fisker also is working to restart production of its original model, the Karma, something that is dependent upon negotiations with battery supplier A123 which recently emerged from bankruptcy under new ownership.
“We have multiple interested partners” that the company is talking to, said Fisker Automotive’s eponymous founder and Chairman Henrik Fisker, following a speech at the Chicago Auto Show.
Company spokesman Roger Ormisher subsequently told TheDetroitBureau.com that the “multiple partners” talking to Fisker are located “across three Continents,” though the maker is declining to reveal specific names.
Fisker appears to be focusing on developing partnerships with, rather than selling itself to, one or more established auto manufacturer. This could give the California-based start-up access to both much-needed cash and additional technology.
In his speech to the Economic Club of Chicago, Fisker said his firm has already raised “more than $1 billion” from investors. But it is still short of where it would have hoped to be as the result of the Department of Energy freezing up a promised low-interest loan. That resulted in a $329 million shortfall in available cash.
That money – or the help of any new partner or partners — would be needed to move ahead on the development of the Fisker Atlantic, a mid-range luxury plug-in that the company hopes will move it into a relatively mainstream segment and boost volume substantially compared to the $100,000 Karma.
The partner strategy, several sources have suggested, is not unlike the approach taken by Tesla Motors, another California start-up that recently introduced the pure battery-electric Model S sedan. Tesla founder Elon Musk has credited an alliance with Mercedes-Benz parent Daimler AG with keeping his company going. Tesla has also partnered with Toyota and, among other things, provides the drivetrain for the Japanese giant’s new RAV4-EV.
It remains to be seen if Fisker could raise enough capital to continue on its own without any new partners but it appears all but certain that the launch of the Atlantic plug-in would be pushed back by several more years.
There could be a bright side to the current delay. Battery drivetrain technology is evolving rapidly and since final specifications haven’t been worked up for the Fisker Atlantic the maker could wind up with an improved drivetrain that also utilizes smaller, lighter and less expensive batteries than original foreseen. Lithium-ion technology is currently the most expensive single component in any advanced battery vehicle, industry analysts point out.
Fisker’s challenges have been complicated both by the slow launch of the Karma plug-in sports car and by the subsequent bankruptcy of its supplier, Massachusetts-based A123. The courts recently approved the sale of the battery maker’s automotive assets for $256.6 million to the Chinese company Wanxiang Group Corp.
(The military side of A123 was split off and sold to Illinois-based Navitas Systems.)
Because of the Chapter 11 filing, Fisker must now renegotiate its contract with the new owners, but in a brief conversation with reporters following his speech, Henrik Fisker said he is confident a revised deal will be in place “fairly soon.”
That would permit a quick restart of Fisker Karma production. The sleek sports car is being produced for the company by a specialty manufacturer in Finland.
Fisker eventually hopes to produce the Atlantic model at an abandoned General Motors assembly plant it acquired in Delaware.
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