Hong Kong tycoon Richard Li, who is already invested in Fisker, has put together an investment group that has bought the ailing electric car company’s $168 million loan from the US Department of Energy. By buying the loan Li will be free to restructure the company without being fettered by DoE obligations.
Fisker, which was started in 2007, secured over a billion dollars in investment. However, in July 2012 the company suspended building the plug-in hybrid Karma, its extended range luxury electric sedan, when battery producer A123 Systems Inc. went into bankruptcy protection. The company also suspended development of its less expensive ($55,000) Atlantic.
Li and his investor group appears to have beat out other offers to buy the DoE loan from the German Fritz Nol group, Chinese auto parts supplier Wanxiang and former General Motors executive Bob Lutz.
Although the exact value of the deal has not been released, bidders reportedly had to post around $30 million. Another DoE stipulation required bidders to present a manufacturing plan for the US.
To date around 2,000 Fisker Karma’s have been built. The sticker price for the Karma is reported to be $96,000. The car can travel 32 miles on battery and its gasoline powered engine gets 20 miles per gallon. The combined mileage of the Karma exceeds 52 miles per gallon city and highway. With a zero to 60 time of 6.3 seconds, the Karma is one of the fastest electric cars on the market.
The Fisker saga shows just how hard it is to bring an electric car to market. The company experienced some early setbacks including a couple of fires in its early production vehicles. In 2012, Consumer Reports magazine gave the Karma a failing grade, citing numerous dashboard glitches and a battery that failed while the car was being tested. Then the DoE decided to renege on its promise to provide an additional $336 million in loans. In March, the company’s co-founder, Henrik Fisker, resigned.
Fisker may have been overly ambitious in its efforts to bring the Karma to market. It remains to be seen if the Li group can resurrect the company.
© 2013, Richard Matthews. All rights reserved.
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