Fisker pins hopes on Karma as it seeks more cash
BEVERLY HILLS (Reuters) - Fisker Automotive Inc showed off its $100,000-plus Karma luxury electric car on Monday, hoping to create a splash less than a month after the start-up company ratcheted down sales projections for its maiden vehicle.
The company, founded by former Aston Martin designer Henrik Fisker in 2007, needs the car, which has come up against its share of teething problems from a recall to software glitches, to sell well.
It hopes to shake off production delays to tap the rest of a $529 million federal loan from the U.S. Department of Energy to bankroll its next model, the Nina sedan. CEO Fisker told reporters -- gathered in Beverly Hills for what's billed as the first chance for U.S. reviewers to take the car for a spin -- it was exploring financing alternatives.
"Our survival is not dependent on the DOE," Fisker said. "We have already looked into alternative financing and we have really good possibilities," he said without elaborating.
"We don't want to put ourselves into a position where we're at the mercy of the DOE."
Fisker, which has never made a profit, received $193 million of the federal loan to support the rollout of the $102,000 plug-in hybrid sportscar. The $336 million balance of the loan is intended to fund development of a sedan known as the Nina that will be sold at a lower price.
But last week, Fisker said it had suspended work at its assembly plant in Delaware -- a former General Motors Co (GM.N) factory -- and laid off 26 workers while it renegotiates terms of the federal loan.
Fisker said on Monday the company -- wary of over-aggressive targets after missing Karma production and sales targets -- was discussing more realistic milestones.
A DOE spokesman had also cited delays in getting the Karma to market as a factor. The automaker has missed several launch dates before handing its first Karma over to actor Leonardo di Caprio, who is also a Fisker investor, in July.
Fisker continues to crank out something like 25 of its Karmas a day, with about 1,500 made so far and about 400 to 500 delivered to European and American buyers, its CEO said.
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In addition to the federal loan, Fisker has raised more than $850 million from investors including Kleiner Perkins Caufield & Byers, Advanced Equities and Qatar Investment Authority. Hewlett Packard (HPQ.N) Chairman Ray Lane is a managing partner at Kleiner Perkins and a Fisker board member and investor.
But Fisker needs its Karma to go down well with its target clientele to sustain its cash flow.
On Monday, it let reporters get behind the wheel of about a half-dozen of its svelte four-door sports sedan and cruise about 70 miles up into the sun-drenched Malibu mountains and back.
Their sweeping curves -- intended to resemble a cheetah in full flight -- and distinctive high-pitched whines turned heads, drawing the kind of attention the four-year-old startup craves as it struggles to put behind it a harsher form of scrutiny.
Fisker has found itself under the microscope as its woes have mounted. In January, it halted sales for four days to fix a software malfunction that at times triggered warning lights while temporarily freezing navigation systems.
In December, it recalled 239 Karmas due to a possible defect in batteries made by supplier A123 Systems AONE.O that could cause a coolant fluid leak and electrical short circuit. The previous month, A123 reduced its full-year revenue outlook after Fisker unexpectedly cut orders.
Compunding its woes, energy department loans and loan guarantees have come under fire from lawmakers since solar panel company Solyndra filed for bankruptcy in September after receiving a $535 million government loan in 2009.
In an opinion piece for the Orange County Register last fall, Republican presidential candidate Mitt Romney said President Barack Obama "shoveled $1 billion out the door" to Fisker and Tesla Motors (TSLA.O), another electric car company. He called on Congress to investigate how taxpayer money was spent so poorly.
"You think there'd be a few bumps in the road. And then you get entangled in a political campaign in America," Fisker said.
Electric cars comprised a fraction of 12.8 million light vehicles sold in the United States last year, led by Nissan's (7201.T) all-electric Leaf and GM's hybrid Chevrolet Volt.
Fisker had aimed to begin production of the Nina in 2013, though the company plans to divulge a more exact timeline only once it restarts work at the Delaware plant.
For now, it's counting on its Karma -- a full-bodied luxury car with 22-inch wheel and a wide but low-slung profile with a solar-panel roof.
Fisker hopes to draw the well-heeled yet environmentally conscious buyer with details like what it calls a no-animal interior -- no leather anywhere -- and wood salvaged from California forest fires and from the bottom of Lake Michigan.
"It makes a big difference to have a car on the road," the CEO said, suggesting the DOE's investment has borne fruit.
"It's about creating something that no other brand will do. We did all that to make a statement that we're different," Henrik Fisker told reporters. "And we're going to be radical from now on."
(Reporting By Edwin Chan in Los Angeles and Ben Klayman in Detroit. Editing by Jane Merriman)