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Fisker burned through $1.3B in private and government funding

The latest massive failure in the automotive industry to take a huge chunk of taxpayer money with it is Fisker. The automaker has been struggling and earlier this month laid off 75% of its workers. The company is also expected to file bankruptcy, seeking protection from its creditors.

Through all of its troubles, Fisker has only produced 2,500 of its Karma plug-in hybrid sedans (it hasn’t even begun production of the smaller Atlantic plug-in hybrid sedan). When you consider the amount of investor and U.S. taxpayer money given to Fisker in the form of government-backed loans, each of those 2,500 Karma electric vehicles cost $660,000 to produce compared to a retail price of $103,000.

Fisker had planned to spend part of the $529 million loan from the U.S. government to reopen an old General Motors manufacturing factory in Delaware. Despite the fact that Fisker had violated loan terms for the use of government-backed funds from being Energy Department, it was allowed to continue using the money according to a report released last week by a company called PrivCo.

Fisker Karma

“They made a mistake” in awarding the loan, PrivCo Chief Executive Officer Sam Hamadeh said of the Energy Department in an interview yesterday with Bloomberg. “Should they have fought this sooner? Obviously -- as soon as it became evident that they had begun to default.”

However, the Energy Department takes issue with the PrivCo report stating that the report contained errors. The Energy Department says that it halted Fisker's funding in late June of 2011 after the company had used about $193 million from the government loan.

Overall, Fisker spent $1.3 billion in venture capital and taxpayer money according to the report. Fisker is supposed to make the first repayment of $20.2 million on the loan granted from the Energy Department today. It remains unclear whether or not that will happen. 

Source: Bloomberg

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RE: Right...
By Samus on 4/22/2013 12:15:09 PM , Rating: 2
Well, Tesla did...

RE: Right...
By Ammohunt on 4/22/13, Rating: -1
RE: Right...
By lennylim on 4/22/2013 2:27:53 PM , Rating: 3
Those two guys may have more in common than you think.

How much did the first Ford Model As cost? I know they were later sold at around $800-900. According to the web (which we know is never wrong), average annual salary of a postal worker is $924 and average annual salary of a schoolteacher is $358. First owner is a dentist. So at that time, I'd say they are playthings of the rich.

There are probably many naysayers about Henry Ford and his newfangled contraption at that time. The main difference is that the naysayers don't have Internet access, so they could only ridicule him when having a drink at the local bar.

Will Tesla be around in 100 years? Will Elon Musk still be remembered in 100 years? Who knows. Not me.

RE: Right...
By BRB29 on 4/23/2013 12:30:11 AM , Rating: 1
yes they were playthings of the rich. And we know it paved the road mass produced cheap vehicles in the future that is affordable for everyone.

Yes Tesla will be remembered forever as the man who made electricity possible for all. That also was something only for the rich along with telephones.

Tesla as a company will also go down in history as the first company to mass produce practical EVs with decent performance and range. We will also owe them for Supercharger stations which will be much more common in the future. Even if hydrogen takes over, Tesla will still be remembered by everyone.

RE: Right...
By epobirs on 4/23/2013 7:47:11 AM , Rating: 2
Actually, the biggest target market for the early Fords were farmers. The Model T was like the Apple II of its era, with hundreds of small companies springing up to produce accessories for it to perform a wide range of tasks. The Sears Roebuck catalog used to have a whole section of this stuff. (Along with the 55 cent 10 pound jars of cocaine.)

The Ford wasn't pitched as just transportation but rather as a portable engine to drive all sorts of equipment and haul a wagon to take the crop to market. Farmers were already well acquainted with securing credit for such capital investments for equipment, long before the average middle class consumer. So this made them a good market to pursue.

RE: Right...
By lelias2k on 4/22/2013 5:17:34 PM , Rating: 4
So were PCs in 1980. Look where we are now.

RE: Right...
By Flunk on 4/22/2013 1:46:12 PM , Rating: 1
Tesla took a lot more time and started with a pre-built chassis for their first model. They then funneled that money into a new model that's being co-built with Toyota and is, by all accounts, selling well enough.

Fiskar paid for all the engineering themselves, without selling off products first to test the market. They built a heavy, poorly handling, bad fuel economy hybrid that no one wanted. Also, it tends to set on fire easily.

I'm not saying Tesla is perfect, but they had a reasonable business plan. Fiskar seems to have been designed to make money off of venture capitalists and government loans.

RE: Right...
By lelias2k on 4/22/2013 5:20:55 PM , Rating: 2
Enough with the whole fire BS. Gasoline also tends to set on fire easily, yet we let everybody pump their on on a daily basis without much fanfare.

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