2012 Fisker Karma Plug-In Is Real, But Will Company Survive?

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After four years, an economic crisis, an industry meltdown, and plug-in cars becoming politically problematic, the 2012 Fisker Karma is on the streets at last.

And it's a real car. We've driven it, shot video behind the wheel, and now we've formally reviewed it.

We're still sorting out what we think about the Karma, an extended-range electric luxury sport sedan that starts at $106,000.

Sexy, sexy, sexy

It's undoubtedly the sexiest, most noticeable car we've driven in years--more so even than the electric Rolls-Royce Phantom we tested.

But it's also a car about the size of a BMW 7-Series sedan with so little interior space that it's defined as a subcompact by the U.S. government.

It's neither a superlative sport sedan nor a particularly efficient electric car.

MORE: 2012 Fisker Karma - Full Review

In fact, running on battery power, it gets only half the distance per kilowatt-hour delivered by the Chevy Volt, the only other range-extended electric car on the market this year.

And the cars we've driven had some disturbing quality issues, from teething troubles like displays that froze and went dark to panel alignment issues and body gaps that wouldn't have been acceptable on the cheapest Korean import 15 years ago.

2012 Fisker Karma during road test, Los Angeles, Feb 2012

2012 Fisker Karma during road test, Los Angeles, Feb 2012

Enlarge Photo

So we wonder, will sleek, sexy lines and a six-figure price really let Fisker sell the 15,000 cars per year it says it's planning to build?

Can company survive?

Then there's the bigger question: Can the company survive?

The U.S. Department of Energy has frozen all further disbursements of low-interest loan funding to Fisker because it missed deadlines and volume projections for the Karma.

As a result, Fisker laid off some workers and suspended development of its next vehicle line, the "Project Nina" mass-market lineup that was to be built in a former GM plant in Wilmington, Delaware.

No more DoE loans, analyst says

Theodore O'Neill, an analyst at Wunderlich Securities, told the Boston Globe that he thinks the Obama Administration won't renegotiate the DoE loan terms.

Post-Solyndra, the entire concept of extending loans to venture-funded startup companies may be politically toxic, and the White House is under pressure to reduce spending.

If the DoE loans don't come through, O'Neill said he thinks Fisker will collapse--possibly taking A123 Systems, the lithium-ion cell maker, with it.

Founder Fisker not worried

A remarkably insouciant Henrik Fisker disagrees with the predictions of doom.

Henrik Fisker, CEO & founder, Fisker Automotive, at 2012 Fisker Karma event, Los Angeles, Feb 2012

Henrik Fisker, CEO & founder, Fisker Automotive, at 2012 Fisker Karma event, Los Angeles, Feb 2012

Enlarge Photo

In an interview on Friday, he hedged his bets and said the company was working hard to develop alternative funding sources from the private sector as well.

Last month, Fisker Automotive doubled the size of its Series D funding round to $300 million, of which $243 million is now committed, bringing total private money invested to $866 million--not including the DoE loans.

Fisker Automotive has already spent $100 million of its own (non-DoE) capital funds on development work for Project Nina, its second car, which is the vehicle for which the bulk of the DoE funds were designated, Fisker said.

Working toward self-sufficiency

But the prospect for DoE loans is "not going to get much better this year," since it's an election year, Fisker said.

"We're not dependent on the DoE, we didn't want to be dependent on the DoE, so we're working harder to become self-sufficient," he said--meaning selling enough Karmas globally to cover the development costs of Project Nina internally.

We'll post our complete interview with Fisker soon.

Name the last one

We get asked a lot about the future of Fisker Automotive, and also Tesla Motors. They're high-profile auto startups of a quality and professionalism not seen in decades.

But we always answer the questions with a query of our own: What's the last auto company founded from scratch in the U.S. by entrepreneurs whose brand is still with us today?

The answer is Chrysler.

And that was 88 years ago.

No one's managed to do it since. Many have tried--Preston Tucker, Henry J. Kaiser, Malcolm Bricklin, John Delorean, and more--but none have succeeded.

So what makes you think that Fisker, or Tesla, will succeed?

Leave us your own thoughts in the Comments below.


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Comments (12)
  1. I hope Fisker survives, but the PHEV drivetrain that seems to be the Karma's weakest link was always going to be an intermediary solution until battery prices dropped and the problem is: Tesla shows that battery prices have already dropped to $400 retail with Elon Musk expecting prices dropping below $200/KWH "in the not-too-distant future".

    Their low battery cost in combination with succeeding to come up with the vehicle concepts the market really seems to be going for makes Tesla's position very strong. If Musk manages to deliver on his promise to get cars in the hands of customers by this summer and 5000 more out by the end of the year I think Tesla is here to stay.

  2. I'm worried about Fisker. I like having more choices in the market, and it's a beautiful car with great driving dynamics, but at that price point it should be superlative at something. It's not fast or roomy, and it doesn't have exceptional range. The Nina may be more interesting; I hope they get that far.

    As you point out, starting a new company is VERY hard, and Tesla's survival is not guaranteed. But they are building something superlative--electric range completely unlike anything you can buy anywhere else. Plus exceptional space in the S and X (too bad the Roadster didn't have that). I think Tesla has a good chance.

  3. Don't forget Preston Tucker and his Tucker 48 sedan. But I doubt Fisker will end up on the failed list, unlike previous attempts Fisker is brining something more then just radical styling. Fisker is offering high style with a powertrain that has not yet been offered in cars of it's class, it is the first luxury PHEV. Though the Karma dose suffer a bit from being a PHEV, it's interior is cramped in places and its probably one of the slowest $100,000+ cars that I've ever driven. Tesla's Model S will be far better then Fisker's Nina. I see Tesla as the best bet.

  4. It is certainly much too soon to predict Fisker's success or failure. I really have little concept at what is important to people who buy $100k cars. I know for very high priced cars, uniqueness is prized above all else, quality and performance are secondary considerations. But 10k vehicles is definitely too many to claim being the owner of a unique limited production car. Still it will be rare enough to draw attention and envy and unique with solar panel roof, twin electric motors.

    The other half of luxury cars is comfort, room, smooth quiet, loaded with fancy features and impeccable fit and finish. I think the only thing on this list provided by the Karma is comfort, so Fisker is not going after this half of the market.

  5. Fisker and Tesla are about as far apart as two companies in the auto business can be. Tesla is all about pushing the envelope with superb engineering, maximizing utility, quality and contracting with other companies to provide drive trains. VS Fisker's sexy looks, but built entirely with off-the-shelf parts.

  6. Good point, Fisker basically outsourced everything, whereas Tesla does almost everything in house. The body and chassis of the Roadster may have been built by Lotus, but Tesla is responsible for it's drivetrain. I wonder if Fisker's delays were caused by dealing with suppliers?

  7. YUP, always supplier delays, the bane of the business which is the result of not creating backlog. Musk may have a cheerleader style but he makes things happen.

  8. Question is to define survival. I do not think either Fisker or Tesla can survive. Auto business requires a lot of very specific understanding of ALL the issues invovled. If a company does not have in its core top management, from the begining, people with strong degree of auto OEM experience in all areas, they will fail. Fisker is a stylist and Musk is a programmer. There is just too much they do not know, they do not know. And worst is yet to come, when all the costs start to roll together: building, tooling, testing, selling & servicing new vehicles, the old fashion, high capital intensive way. Their investors are looking for quick ROI & not empty promises. If you have never done an auto program, you just don't understand.

  9. Well if Tesla can deliver the signature Model S in significant volume to satisfy all of the people who put down deposits for the high end $77,500 300 mile range edition it will do well. However if Tesla misses the July 2012 deadline for the introduction of the Model S then it will loose good will with the deposit holders and then they could be in trouble with the consumer. I certainly hope they have a significant inventory of the Model S signature vehicles ready for the early adopters who had faith in Tesla to produce a great EV. Tesla can not afford to miss this dead line and I hope they take the 5 & 1/2 months they have before the Model S introduction to build all the Signature models they have promised to the Deposit holders.

  10. Tried to post this under Richard Marks twice:
    Musk is a lot more than a programmer, he has learned a lot about running companies. Tesla has, under his direction, behaved a lot more like a mature auto company than a specialty shop. They built and rigoursly tested 20 Roadster prototypes, changed design (transmission) and supplier (original carbon fiber pannel maker was not up to quality). Tesla has hired many auto experts from Detroit.

    Fisker has spent his career in the auto industry and knows what he is doing. However I do not have the same confidence with Fisker surviving as Tesla, but it is much too early to tell.

  11. And I tried to post this under Mark Stang:

    I don't agree with your emphasis on a time deadline. Tesla is best served by getting the car right before releasing, and delays although undesirable are much better than a bad reputation.

  12. I just love the drama. Great cast of characters populating one arcane Govt giveaway program after another. Well intentioned but misplaced Govt incentives create battery boondoggle that stresses building a factory and staffing before process engineering refinements, R and D and firm cash in the bank orders. Tells you a lot about the lack of experience in the White House. Like a drug dealer they have their clients strung out and have now shut the window. I really like the fact that DOE employees have been transformed into bankers. Barney Frank take note, Govt intervention into financial markets always distorts, misdirecting capital and delaying attainment of the desired objectives.

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