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Fisker Karma  (Source:
A total of 26 employees were laid off

The U.S. Department of Energy (DOE) pulled the plug on a federal loan it provided to Fisker Automotive, forcing the automaker to stop work on a Delaware factory.

California-based Fisker Automotive, known for the $102,000 Karma plug-in and the Nina midsize sedan, received a total of $529 million in loans from DOE in April 2010. The loans were part of a program to progress development of high-tech vehicles, where Fisker received $169 million for Karma engineering and $359 million for Nina production. The loans were also meant to revamp a closed General Motors plant in Wilmington, Delaware for Fisker auto production. So far, Fisker has drawn down $193 million from its loans.

Fisker has been behind schedule on selling its first auto here in the U.S., and in May 2011, DOE blocked the loans previously provided to the automaker due to "unmet milestones." According to Damien LaVera, DOE only allows Fisker to use the loan if the auto company upholds its end of the deal and shows results. However, Fisker has been a little behind.

The lack of access to loans has affected work on the Delaware factory. In fact, work on the auto factory has now been halted, and 26 people were laid off.

"It's been frustrating that Fisker and the Department of Energy weren't able to come to terms on the revisions to the loan in time to avoid this," said Brian Selander, a spokesman for Delaware Governor Jack Markell. "I'd say the project is on hold while the two sides try to get things sorted out."

DOE seems to be a bit more cautious of who it provides its financial offerings to after the series of alternative energy failures through 2011 and 2012. In September 2011, Silicon Valley-based solar panel company Solyndra filed for bankruptcy after receiving a $535 million loan from DOE in 2009. Government officials reportedly warned the administration about Solyndra's viability back at that time, but these warnings were set aside to meet political deadlines.

In November 2011, Beacon Power, a company that creates flywheels to store power and increase grid efficiency by preventing blackouts, filed for bankruptcy after receiving a $43 million loan guarantee from DOE in August 2010.

Just last month, auto electric battery maker Ener1, whose EnerDel subsidiary received a $118.5 million DOE grant in August 2009, filed for bankruptcy.

Electric vehicles haven't had a great year, either. Last year, General Motors' Chevrolet Volt was heavily criticized after three Volts sparked or caught fire in a series of side-impact crash tests conducted by the National Highway Traffic Safety Administration (NHTSA). Fisker had some battery issues of its own as well back in December 2011, where over 200 Karma's were recalled.

Also, somewhat similar to Fisker's factory situation, an Indiana Think City EV plant has been sitting stagnant after failing to produce the Think City EVs, which are tiny two-seater EVs manufactured by Think Global.

Fisker CEO Henrik Fisker said the company sent 225 Karmas to dealers in December, with another 1,200 on the way.

Sources: The Wall Street Journal, BusinessWeek

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RE: The media hurt the Volt not the crashes
By hartleyb on 2/7/2012 2:43:14 PM , Rating: 2
This is an outright lie!!! The volt was not profitable for GM prior to the fires and recall. The actual numbers havn't been published, but GM hadn't even started to pay for the production cost before the volt tanked. For an automobile to be profitable it needs to sell in the range of 100000 to 200000 units to pay for the production line. The huge variation is due to type of Vehicle i.e. luxury vs. standard and the difficulty of the production i.e. trucks are actually easier to make then cars.

By Keeir on 2/7/2012 6:55:35 PM , Rating: 1
For an automobile to be profitable it needs to sell in the range of 100000 to 200000 units to pay for the production line.

Gosh! You're pretty good at telling the future. You already know that the GM won't sell 100,000 units on the tooling it invested to create the Volt line?!?

Did it occur to you that almost all of the "Volt" investments are dual use? The battery pack facility produced hybrid batteries as well. The production line could be converted to produce Cruzes, Sonics, or Malibus with relatively minor chances (in comparison to setting up a completely new line anwyway)

People who like to gloat about the Volt "failure" often use the above faulty logic to puff up the numbers. The Volt is a unique piece of Automotive hardware the required GM to invest in unique and cutting edge IP in car design, car toolings, etc, etc. Back in the 1990s, Toyota developed the Prius. It took 5+ years to sell 100,000 cars (Worldwide sales). At which point Toyota had invested in 2 revision of the original hardware! Although I don't like the Prius, there is no question that the Prius has been an effective Halo car for Toyota and is now transiting into a mass market status (more than 10 years after the original introduction)

Yet people expect:
Volt must be profitable in year 1 (took 7 years for the Prius to accomplish this)!
Volt must sell 60,000 units a year immediately (took 7 years for the Prius to accomplish this)!
Volt must never have any issues ever (Original Prius was not even released in the US... due in part to problems)!

This is stupid. Like it or hate it, the Volt is exactly the type of RD research you want a company to be investigating in the face of steadily rising fuel costs and the political climate both in the US and the World. I hope GM continues the effort. In hindsight, GM's handling of the EV-1 situation was the correct business case move at the time, but lacked the vision that successful companies rely on... Imagine a world where GM could release a 150 miles Corvette instead of Tesla producing the Roadster. Imagine a world where GM sells high tech automotive batteries to the world. Maybe in that world, GM doesn't require an Automotive Bail-out because it actually has the Engineering base to produce the products that keep it competitive in PR and sales floor.

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