Fisker idles Karma production while waiting for A123 auction

The logo of an extended rage electric vehicle Fisker Karma is pictured at the start of an electric car rally from Tallinn to Monte-Carlo in Tallinn June 1, 2012. REUTERS/Ints Kalnins

(Reuters) - Fisker Automotive Inc said on Thursday that it has temporarily idled production of its Karma plug-in hybrid after its lithium-ion battery supplier A123 Systems Inc AONEQ.PK cut its output.

A123, which is the sole battery supplier for the Karma, slowed production after filing for Chapter 11 bankruptcy protection in October, Fisker spokesman Roger Ormisher said.

Fisker has enough lithium-ion batteries on hand in case an owner needs a replacement, Ormisher said. The company expects to have clarity on its battery inventory after December 6, when an auction to sell A123 is scheduled.

Auto parts suppliers Johnson Controls Inc JCI.N and China's Wanxiang Group Corp are among the potential buyers who will square off to buy A123. Other companies that have expressed interest in A123 include NEC Corp 6701.T of Japan and Siemens AG SIEGn.DE of Germany.

The U.S. government said this week that A123 could not be sold without its consent. Fisker and A123 have both received funding under a federal program designed to create an advanced vehicle manufacturing base in the United States.

Bloomberg reported news of the idled production earlier Thursday.

Fisker has faced a series of setbacks this year, including a recall of batteries made by A123 and the U.S. Department of Energy’s decision to block Fisker from accessing a portion of its $529 million loan.

On Wednesday, the company pushed back its China launch for the $100,000-plus Karma to the first quarter of next year from the end of 2012.

Reporting By Ben Klayman and Deepa Seetharaman in Detroit; Editing by Bob Burgdorfer