Fisker Says Loss of DOE Loan Isn't the End; Company Searching for Alternatives
February 22, 2012 11:37 AM
Fisker says his company is viable and self-funded
Fisker Automotive may have
lost access to its U.S. Department of Energy (DOE) loan
, but CEO Henrik Fisker insists that that hasn't put a nail in the company's coffin.
"We are a viable, self-funded company," said Fisker. "We can actually be self-sustainable on the Karma. But we have bigger aspirations."
In April 2010, California-based Fisker Automotive, which is known for its $102,000
and Nina midsize sedan, received $529 million in loans from DOE. The loans were part of a program to progress development of high-tech vehicles, where $ 169 million went toward Karma engineering and $359 million went toward Nina production. In addition, the loans were meant to revamp a closed General Motors plant in Wilmington, Delaware for Fisker auto production.
Fisker has been a bit behind schedule on selling its first auto in the U.S., and in May 2011, DOE blocked the loans previously provided to the automaker. According to DOE, the loans were blocked due to "unmet milestones."
However, Fisker isn't letting the lack of DOE funding bring the company down. He said it's likely that he may never have access to DOE money again, but is looking for alternatives without having to give up equity in the company.
"We are in discussions for alternative financing," said Fisker. "We don't want our future 100 percent reliant on DOE funding. It's been great to have. We just want to be sure we have capital without DOE.
"There are so many ways of getting financing without selling equity. Before we put in these hundreds of millions of dollars, we need to know which partner we need to go with. With a startup, you estimate your milestones, and you have to make fairly aggressive estimates because time is money.
"Many companies have put projects on idle because the plan is not working as expected, or marketing wants to change stuff. I've been involved with endless programs where it was frozen for six months. It just was not politicized or publicized."
Fisker Automotive has already drawn down $193 million from its DOE loans, and has raised over $860 million in private equity financing since 2007. The company is working to order tooling for its Nina at the Delaware factory for $336 million, where the midsize sedan has completed the development phase. There is even a running prototype. As far as the Karma goes, Fisker Automotive has received 2,500 orders.
The loss of the DOE loan didn't completely leave Fisker unaffected. Earlier this month, Fisker was forced to
lay off 26 employees
at the Delaware plant after the DOE loan was blocked. Before that, Fisker Automotive was
slammed by U.S. Presidential hopeful Mitt Romney
for receiving the millions of dollars from the government when other clean energy pursuits have recently failed. For example, solar panel company Solyndra went bankrupt in September 2011 after receiving
$535 million in loans
from DOE in 2009, and Beacon Power, which creates flywheels to store power and increase grid efficiency, filed for bankruptcy in November 2011 after receiving
$43 million from DOE
in August 2010. Later, in January 2012,
electric battery maker Ener1
, whose EnerDel subsidiary won a $118.5 million grant in August 2009 from DOE, filed for bankruptcy.
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