Fisker Automotive, the vehicle manufacturer which took the clean transportation world by storm in 2009 when it announced the debut of its Karma model plug in hybrid vehicle, has announced its intention to renegotiate the terms of its $528.7 million conditional loan from the U.S. Department of Energy, or DOE.
The loan was contingent on Fisker meeting certain production and sales milestones, which it has apparently failed to do since May of last year, in spite of delivery of 225 Karmas to showroom floors and another 1,200 languishing on the production line.
Fisker’s failure to comply led the DOE to block access to further funding, triggering a layoff of 26 workers in Fisker’s Wilmington, Delaware manufacturing location and about 45 engineers in its Anaheim, California headquarters. The DOE has not said which milestones were missed.
So far, according to a report from the company, it has received $193 million of the total loan package from the DOE, much of which went to develop and commercialize the Karma, which began appearing late in 2011.
The Karma, able to run 100 miles on a single gallon of gasoline, could conceivably use only a single tank of fuel per year if driven less than 50 miles per day and plugged in overnight, according to company spokespersons. The Karma costs $87,900 before tax credits.
When Fisker moved into its Wilmington, Delaware factory -- a former General Motors facility rescued from Brownfield anonymity by an $11.7 million financial settlement with GM and retooling of the assembly floor – company officials said the company would eventually be producing 75,000 to 100,000 Nina-model vehicles by 2014, from a production staff of 2,000 and a vendor and supplier staff of 3,000.
The Nina is another hybrid electric motor with lithium-ion battery backup. When depleted, the car runs on a generator driven by a gasoline engine. The Nina’s sticker price is reported as roughly $47,000.
Fisker, headquartered in Anaheim, California, with one site in Michigan, also received a $13 million loan from the state of Delaware, and a $9 million state grant on startup, as well as $300 million in venture capital from backers, one of whom was A123 Systems (Nasdaq: AONE), which was slated to supply batteries for the Karma.
Having failed to meet requirements, the company now falls under a Congressional scrutiny triggered not merely by missed milestones but also as a result of several other DOE-funded clean energy company failures, notably Solyndra (solar panels), Beacon Power Corp. (flywheel energy storage), and Ener1 Inc., a supplier of lithium-ion batteries for electric vehicles.
When Fisker first arrived on the scene, it was billed (and celebrated) as a job creator in an economy that had very recently seen the meltdown of the Big Three auto makers in the U.S. Chrysler and GM both took a bailout; Ford slid by on cash reserves.
As a result, Fisker’s presumed failure reverberates through the halls of Congress, as wary lawmakers look over their shoulders for the next Solyndra and Judicial Watch files under the Freedom of Information Act to access records related to the DOE loan.
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