February 7, 2013 / 9:31 PM / 5 years ago

UPDATE 1-Fisker to restart auto production 'fairly soon'

* Fisker expects A123 will stay on as Karma battery supplier

* Pushes back China launch to May, instead of first quarter

* Seeking investors, partners in Asia, particularly China

By Deepa Seetharaman

CHICAGO, Feb 7 (Reuters) - Fisker Automotive Inc, the “green car” company that has not produced a vehicle since July, expects to restart production of its Karma plug-in hybrid “fairly soon,” Executive Chairman Henrik Fisker said on Thursday.

Fisker added that the Southern California automaker expects A123 Systems Inc to continue to supply batteries for the Karma, which launched in the United States more than a year ago.

In a deal finalized last month, A123 was bought out of bankruptcy by the U.S. unit of Wanxiang Group, China’s largest auto parts maker. Fisker had said previously that it was waiting for the A123 sale to clear before resuming output.

“We’re negotiating with them right now to figure out exactly when they’ll start,” Henrik Fisker said, referring to A123. He spoke to reporters after making a speech at the Chicago Auto Show.

Asked how soon the company would start producing Karmas again, he said: “It will be fairly soon.” He did not elaborate.

Fisker also said the automaker expects to launch in China in May. The new timeline is later than the first-quarter launch the company outlined late last year.

The struggling green-car startup is seeking investors and partners to raise the funds needed to finish development of its second model, the Atlantic. That model is geared toward families and will be about half the price of the flagship Karma, whose price tag starts at around $103,000.

The search for financial backers comes after a tough 2012 marred by the rocky and delayed introduction of the Karma, A123’s bankruptcy and an election season that turned the U.S. government-backed company into a political punching bag.

The Karma’s delays prompted the U.S. Department of Energy to bar Fisker from drawing down the remaining portion of its $529 million federal loan, which was earmarked for the Atlantic.

In Chicago on Thursday, Henrik Fisker declined to confirm that the company was seeking investors in China, an effort that people familiar the matter have described as critical to the automaker’s success.

Fisker has raised $1.2 billion since it was founded in 2007 and has the backing of Ray Lane, a Fisker director and managing partner at venture firm Kleiner Perkins Caufield & Byers.

But Fisker suffered from what new chief executive Tony Posawatz, who worked on General Motors Co’s Chevrolet Volt and who joined Fisker last year, has described as an “overly ambitious and aggressive” business plan.

Posawatz is one of several new executives hired over the last year to help steer the automaker’s turnaround. As part of that effort, top executives have spent the last several months looking for a strategic partner. The company hired investment bank Evercore Partners Inc to help the search last year and recently hired Huron Consulting Group as well.

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