News Column

Fisker Undeterred by Glitches, Slow Sales

Oct. 1, 2012

Nathan Bomey

Fisker Karma
Fisker Karma

Fisker Automotive's new CEO defended the California startup's electric vehicle, saying that the company is "getting the drama behind us" and raising funds to launch a second new car.

Fisker CEO Tony Posawatz, who guided the Chevrolet Volt to production during his tenure at General Motors, on Monday said the Fisker Karma has been well-received despite what he called the company's past "missteps."

"Customers do like these cars," Posawatz told the Automotive Press Association luncheon in Detroit.

He said the plug-in hybrid electric Karma, which costs more than $100,000 and has a 300-mile range with a battery and a backup gas engine, is attracting buyers who love great design.

"It's lasting, it's bold, it's timeless, it has a unique signature," he said.

But last week Consumer Reports said the Karma was "plagued with flaws" and declined to recommend it.

Posawatz questioned Consumers Reports' approach, but acknowledged that Fisker has "a lot of work to do." He said the company's previous leaders spent too much money.

"I would attribute it very much to being overambitious, overaggressive, just going for it," Posawatz said. "I think they tried to be quick, tried to hurry, tried to rush. There are times with small companies like Fisker you want to be nimble and fast and that's a good thing, but you don't want to be rushed where you will pay for rushing."

Posawatz said the company is actively designing its second vehicle, the Atlantic, which Fisker wants to price at about $55,000. He said the company wants to build the vehicle at a plant in Delaware where it originally planned to assemble the Karma, using loans from the U.S. Department of Energy.

Instead, the Karma is being assembled by contractors in Finland with battery packs made in Michigan by Massachusetts-based A123 Systems, Fisker's only battery supplier.

An A123 manufacturing error caused Fisker in March to announce that it would replace all of Karma battery packs. The recall, which is still in process, cost A123 about $55 million.

Analysts have questioned whether A123 will survive. Asked Monday whether Fisker is preparing a contingency plan if A123 collapses, Posawatz said Fisker is considering its options.

Founded in 2007, Fisker started with three employees and has nearly 400 today. The Anaheim, Calif.-based company has raised about $1.2 billion in private equity since its founding, including $300 million since December.

Posawatz confirmed that the company will need to raise more money than the $100 million it raised last week before it launches the Atlantic. He said the company's ultimate goal is to go public, but he said it's considering partnership options right now.

The company has 79 dealerships in 16 countries, including 46 in the U.S.



Source: (c)2012 Detroit Free Press Distributed by Mclatchy-Tribune News Service.


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