Advertisement

Fisker's Federal Fiasco: Loans, 20-MPG Electric Cars, Shoddy Reporting

 
Follow John

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

Today, if the news cycle cooperates, ABC News will air a segment on its Nightline program that looks at Fisker Automotive--makers of the 2012 Karma plug-in luxury sport sedan--and the low-interest loans it and Tesla Motors have been granted by the U.S. Department of Energy.

Full investigations into government support of any private company--from Fisker to, say, natural-resource extraction firms--are always healthy. And we look forward to today's segment.

But there's been some remarkably sloppy reporting across the media spectrum, so we feel the need to point out a few facts.

Bumped by Iraq

The first stories appeared last Thursday on the websites of ABC News and the Center for Public Integrity's iWatch, the joint partners in the investigation.

The ABC story includes a brief 3-minute video clip from Good Morning America previewing the story. The full ABC segment was to have aired Friday, but was bumped by the news of U.S. troop withdrawals from Iraq.

Lots of stories, little new info

Nonetheless, a flurry of coverage reprised the stories, often adding the political slant of the outlet. Electric-car advocates questioned the motives that led to the story; outlets suspicious of government industrial policy slammed the loans (and occasionally the entire electric-car industry) as doomed to failure.

There have been a couple of hundred articles over the last week or so, notes electric-car advocate Chelsea Sexton, "but very few of them contain actual new info." In her opinion, most of the coverage has been either "partisan attacks or repackaging of the ABC article."

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

Relatively few, however, have focused on the 2012 Fisker Karma's fuel economy. In range-sustaining mode, the Karma's 2.0-liter gasoline engine propels the car by generating electric power to run a pair of electric motors that turn the wheels. But it does so at just 20 mpg, according to EPA ratings.

The S-word: Solyndra

In most of the coverage, comparisons of Fisker (and sometimes Tesla as well) to the bankrupt solar-panel maker Solyndra are rife.

The right-wing site BigGovernment.com, for example, touted a "shocking new dimension" to the "emerging Fisker Karma scandal" by saying, "Insiders tell Big Government that the Fisker Karma scandal is a 'green car Solyndra.'”

That company received roughly half a billion dollars in loans from the DoE, though many solar-industry analysts say it failed largely because Chinese solar-panel makers have cut prices deeply enough to bankrupt virtually any U.S. producer.

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

(The day before ABC's Fisker story, a coalition of U.S. solar panel makers filed a trade case against the Chinese industry in Washington, accusing it of using billions of dollars of government subsidies to gain U.S. market share in contravention of international trade law.)

Electric-car advocates worry that misunderstanding of the Fisker terms could imperil the DoE low-interest loan program, which still has roughly $10 billion in loan capacity uncommitted to advanced-tech vehicles--with many applications yet to be decided on.

Project Nina delay

Fisker fought back, with cofounder Henrik Fisker saying the next day--not surprisingly--that Fisker and Solyndra are "completely different; you can't compare at all" in a Washington Post article.

The company didn't do itself any favors, though, by saying yesterday that full production of its mid-size Project Nina plug-in sedan won't begin until mid-2013, though it continues to insist that some production will take place before the end of next year.

Revised terms not public

And that Washington Post article raised a disturbing note on the topic of government transparency. The Energy Department confirmed to the paper that it had "eased expectations after conditionally approving the loan to Fisker, and has made allowances for scaling back projections in the final loan agreement"

But, according to the article, the DoE "declined to make public those adjusted terms, including projected car sales volume or milestones [Fisker] must meet."

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

Nonetheless, much of the journalism around Fisker's DoE loans has been somewhere between superficial and shoddy. So it's time to point out a few facts to keep in mind as you view tonight's ABC segment.

The basics ...

(1) The Fisker Karma and Project Nina are two different cars

Because plug-in cars apparently remain exotic and confusing to much of the media, it's important to differentiate between the 2012 Fisker Karma (now in production) and "Project Nina," the code name for Fisker's second car line.

Of the $529 million in low-interest DoE loans granted to Fisker in June 2009, $169 million was allocated for engineering integration work on the Karma.




Advertisement
 
Follow Us

 

Have an opinion?

  • Posting indicates you have read this site's Privacy Policy and Terms of Use
  • Notify me when there are more comments
Comments (28)
  1. Very good point on the process of approving the loan.
    Also lobbying disclosure from 2009 show that Wellford Energy Advisors(Laura Lovelace)lobbied on Capitol Hill for Fisker to advance "the purchase of manufacturing facilities in Delaware."
    The real smoking gun will be FOIA'd documents from DoE showing that standard considerations were violated due to personal requests from political donors.
     
    Post Reply
    Vote
    Bad stuff?

  2. As for the selection of the Delaware plant, it was my understanding that Fisker, being a designer of European luxury car, anticipated that North America and Europe were their most likely target markets, and the Delaware plant was very near a major European shipping port, and was a modern, operational plant just prior to GM's bankruptcy.
     
    Post Reply
    +1
    Bad stuff?

  3. Thanks for bringing out some good points. I thought all the $529M was for Nina, but now you are saying $169M was for the Karma.

    This is is really horrible. If the government is trying to support energy efficient vehicles, why loan $169M to a company that is making a 20MPG vehicle.

    Furthermore, given what we now know about the Karma's inefficient design, what makes anyone think the Nina will be fuel efficient. Clearly the leadership at Fisker doesn't give a rat's arse about efficiency and you can bet that will show in the Nina's MPG.

    This can be contrasted with Aptera that was built from the ground up with efficiency in mind, but didn't receive federal loans. So much for rewarding efficient design.
     
    Post Reply
    +2
    Bad stuff?

     
  4. I don't think Fisker, let alone the US government had any idea in advance that the Quantum Technologies powertrain would pan out so inefficient. You're right though to question the efficiency of the Nina which will be based on the same powertrain. Even if the terms of the loans don't require to meet any efficiency standards some major rethinking of the powertrain concept may be needed from a commercial viewpoint or Fisker will be the next Solyndra.
     
    Post Reply
    -1
    Bad stuff?

  5. John, your still wrong. Do yourself a favor an quit posting replies. $169mm went to the Headquarters in Irvine/Anaheim CA for the development of the Nina line up. The Karma was designed before the DOE loan. Did you know the EPA never took the car out to calculate the MPG? Also, if a commute is less than 32 miles, the car never turns on the gasoline engines? Also, the engines recharge the battery, so one can switch to stealth to sport intermittently throughout the drive. Get your intel right before posting a bunch of BS.
     
    Post Reply
    +1
    Bad stuff?

     
  6. Brian, Right from the story above "$169 million was allocated for engineering integration work on the Karma." So $169M for Karma. Either you didn't read the story or you disagree, not sure which.

    As for the EPA testing, we all know it has limitation, but all cars are subject to the same test that make them COMPARABLE which is key.

    Comparably, the Karma guzzles twice the electrons per mile as other EVs. Also at 20MPG (after 32 miles electric) it then guzzles gasoline at twice the rate of a modern fuel efficient car.
     
    Post Reply
    Vote
    Bad stuff?

     
  7. how many dollars spent on the development of the Nina before the delay?
     
    Post Reply
    Vote
    Bad stuff?

  8. And why does everyone act like 32 miles electric is a good thing? Electricity is not free for the taking like the nitrogen in the air. Electricity must be produced at significant expense and/or pollution. It matters how efficient the ev is.
     
    Post Reply
    +1
    Bad stuff?

     
  9. "And why does everyone act like 32 miles electric is a good thing?"

    Because electricity can be produced pollution-free. With a gas engine you have no choice but to pollute. This is a high-performance luxury car. The purchasers are not overly concerned about saving money on fuel. So it is a big deal that you can drive 32 miles pollution-free.
     
    Post Reply
    Vote
    Bad stuff?

     
  10. "Pollution-free" is possible but unlikely. It would take something like a 7KW array on a house just to power this vehicle. That would cover the roof of even a large home of a Karma purchaser.

    Also, if a Karma owner does choose to put a 7KW array on their house, it probably will not cover their electricity usage, never mind an EV.

    So I am with you in spirit, EV+solar=good, but the numbers only work if the vehicle is efficient.
    +1
    Bad stuff?

  11. John, unfortunately, Ampera was deemed less marketable, which is obvious when you put the Fisker Karma next to the Aptera 2e. I wish Aptera had been green lighted as well, because I believe the market is there for it.
    ABG revealed today that the Karma weighs 5,300 lbs, which explains why the 4 cylinder only gets 20 mpg. Hopefully, Fisker is following your advice and looking at much lighter weight materials for the Nina.
    The $169 million was spent domestically on local engineering and design and on local vendors like A123. The assembly contractor is foreign, but they were the right size and expertise to build this vehicle.
     
    Post Reply
    +1
    Bad stuff?

     
  12. Lighter weight, there is a thought...Except the Karma is mostly aluminum so what do you suggest?
     
    Post Reply
    Vote
    Bad stuff?

     
  13. How does an aluminum sports sedan weigh 5300 lbs? Even if the battery is 1000 lbs, that is still a lot of weight for an aluminum car.
     
    Post Reply
    Vote
    Bad stuff?

  14. Amused by your "Ampera" typo when you obviously meant "Aptera."
     
    Post Reply
    Vote
    Bad stuff?

  15. Very good article. But, you've gotta do something about this font..
     
    Post Reply
    Vote
    Bad stuff?

     
  16. @Mark: See if this helps ... http://www.greencarreports.com/news/1065054_redesign-advice-if-our-font-looks-lousy-heres-a-suggestion
     
    Post Reply
    Vote
    Bad stuff?

     
  17. For what it is worth, John's advice fixed the font for me.
     
    Post Reply
    Vote
    Bad stuff?

  18. I think the problem with the Karma is it was designed to be good looking and not much else. Most of all the technical work was outsourced and not actually done by Fisker Automotive. I could be wrong but I think the Karma's performance would have been better if the company was started from an engineering stand point like Tesla, but it looks to me like it started with design. Fisker Automotive doesn't seem to be a complete car company, engineering needs to be the biggest part of your companies foundation followed up with a great design not the other way around. Still I'am a big fan of Henrik Fisker so I hope all will work out well for him and Fisker Automotive. I'm sure the lessons learned with the Karma will help the Nina.
     
    Post Reply
    +1
    Bad stuff?

     
  19. I can't think of how many people have said "What's the big deal, all you need to do is buy an electric motor, some batteries and throw them into the car." Well, this is what happens when you do that. GM and Tesla designed their own motors, they spent years evaluating batteries, Fisker made quick expedient decisions, and got this car to market years quicker than either the Volt or the Tesla Roadster.
     
    Post Reply
    +1
    Bad stuff?

  20. Solyndra failed not because of any "Chinese conspiracy" but because it was horribly configured - I remember before the loan an analyst claiming that the reason venture capitalists avoided that company was because they attempted to build panels that cost $6 per watt and sell them into a market for $3 per watt. When the govt backed the company AND made the ridiculous terms that the US govt would stand last in line in the event of a failure, many unsuspecting citizens assumed the Feds had guaranteed the investment. Regardless, the loan made zero fiscal sense - the company went bankrupt almost as soon as they got the taxpayer money. One cannot chalk this whole fiasco as "bad luck." It was riddled with corruption from the start- bribes, etc.
     
    Post Reply
    +1
    Bad stuff?

     
  21. @Ramon: Citations and links, please?
     
    Post Reply
    Vote
    Bad stuff?

  22. The choice of that closed GM plant in Delaware was no accident - Joe (Foot-in-Mouth) Biden was right there pushing the loan thru. There is no Earthly reason for subsidizing any business, save one upon which the safety of the nation depends. Crony capitalism seems to be rife in this corrupt administration and the payoff here was to Biden's home state, and the UAW, which controls the Democratic Party and which Biden assumed would be brought in to man the assembly plant. No American industry has ever prospered
    thru govt subsidies. The mere fact that an industry "requires" subsidies tells you what the odds are of it succeeding. The fact that Ford, GM, etc got subsidies is no justification for giving subsidies to Fisker.
     
    Post Reply
    +1
    Bad stuff?

     
  23. @Ramon: Correction: As noted in the piece, GM did not get DoE low-interest loans, as Ford did. Ford, OTOH, did not get restructured with U.S. Government funds, as GM did. Conflating the two makes your entire argument look sloppy.
     
    Post Reply
    +1
    Bad stuff?

  24. I'd have to say that defending Fisker is a losing proposition. That company has not, I don't believe, ever told the truth about anything. They originally claimed their Karma would travel 60 miles on battery power and would do as well as the Volt running on extended range mode. They also claimed it would be as fast as it looks. Turns out the car is a slug unless one runs the gas engine to augment the battery pack. I'm sure their price quotes were also fraudulently optimistic. I find it a touching article of faith that some are claiming anything about their upcoming Nina, other than it likely being a poor rendition of the Volt, which today's news claims are piling up on dealer's lots, even with their very hefty $7500 taxpayer subsidy.
     
    Post Reply
    Vote
    Bad stuff?

  25. This article was a great deal more informative than the Nightline report. Too bad far fewer will likely see it.
     
    Post Reply
    +1
    Bad stuff?

  26. Sadly last nights Nightline report was simply an attack on Obama that Fisker and Tesla got caught up in. They picked out a few facts but failed to give complete information, they failed to mention Fisker's Nina which was the main reason Fisker took the loan and picked on the Tesla Roadster which has nothing to do with Tesla's loan. They pointed out the high price of the cars, but as we all know new technologies cost allot at first. I'm sure both Tesla and Fisker had no idea that when they accepted the loans that they would get caught up in the presidential election wars. First Tesla and Fisker had to survive the stock market crash now they're going to have to fight they're way through the presidential cage match. Round 2....FIGHT!!
     
    Post Reply
    Vote
    Bad stuff?

     
  27. Who cares if Fisker took out most of the loan for the Nina? If they fail badly on the Karma, the Nina is largely dead.

    Loan gone.

    Fisker is a slick company, unlike Tesla which is more like a geek company. Fisker is more like a Wall Street Company.

    Like Solyndra, the Fisker story does question the government's due diligence. There were plenty of warnings regarding Solyndra. CNBC cited an analyst report released before the loan that almost predicted a Solyndra bankruptcy to the date.

    Of course, other analysts might have made contrary predictions, but the gov's rush into the solyndra loan was a bad move.

    I don't know the whole Fisker story, but I doubt Fisker only picked Delaware because of a port, but because it was in Biden's home state
     
    Post Reply
    Vote
    Bad stuff?

     
  28. I made no mention of who got more money. And Tesla is just as slick but may look geeky to people like you because they've done all of their own engineering work whereas Fisker outsourced nearly everything. If being more concerned with image makes your company look slick then Fisker has done that well. You shouldn't fall so deeply in love with the Karma's looks that you can't see straight.
     
    Post Reply
    Vote
    Bad stuff?

 

Have an opinion? Join the conversation!

Advertisement

Find Green Cars

Go!
Advertisement

Advertisement

 
© 2014 Green Car Reports. All Rights Reserved. Green Car Reports is published by High Gear Media. Send us feedback. Stock photography by Homestar, LLC.