Report: Fisker Had Wildly Optimistic Expectation to Sell 100,000 Vehicles Per Year

By Jacob Brown | May 03, 2013
We're starting to wonder what sort of person approved the $529 million Department of Energy loan Fisker Automotive that ended last month at the time when the federal government had to forcefully seize $21 million of the $192 million the company ended up getting before the feds froze the loan altogether. Paragraphimage During the Congressional hearing held last week for Fisker, it came to light that in its original business plan, Fisker said it had planned to sell 100,000 cars by 2013. Over the lifetime of the Fisker Karma, the company has managed to sell just over 2,000. Mind you, its business plan sent to the Department of Energy was written as Fisker expected to have its car in production by 2011, allowing three model years to build business. It would have also likely included the stillborn BMW 3 Series-sized Fisker Atlantic. Together, the BMW 3 Series and 7 Series with which the Karma competed sold around 400,000 cars globally last year. And they're among the top-selling luxury cars in the world! Porsche, a well-established automaker, sold more than 143,000 vehicles last year, ranging from a $50,000 Porsche Cayenne to a $200,000 Porsche 911 GT2 and everything in between. Basically, Fisker's ambitions were a pipe dream from the get-go. Company founder and former chairman Henrik Fisker said last week that, "Fisker still has the potential to build on that success if the company can secure financial and strategic resources." Paragraphimage If it were to gain some financial stability, it would have a long road back. The Fisker Karma was originally intended to sell for around $87,000; by the time it reached production, that price had ballooned $20,000. Instead of basing its company around a solid foundation of engineering, it outsourced most of the Karma's development, instead focusing on design. The Tesla Model S, by contrast, was the opposite, with a design that was cobbled together after Fisker left the Tesla Model S project to start his own automotive brand. Tesla sued and lost, however. When the Fisker Karma its long line of recall mishaps and high-profile fires, the company didn't have the resources to cope. Its battery supplier, A123, declared bankruptcy and was purchased by a Chinese firm, halting battery supplies. Fisker Automotive has led a troubled existence and now hangs on by a skeleton staff as it searches for an investor that's not likely to come. It also serves as a business case for how not to start an automotive company, now joined by Coda Electric this week. Oh well... Source: Automotive News (Subscription required)
Peter Einstein
Peter Einstein

From what I can figure out (having followed the situation very closely), the DoE pushed Fisker to make those highly aggressive projections -- and when minor supply chain issues arose (which were to be expected when developing and integrating such new technology) and the EPA delayed the Karma's certification by perhaps 6 months, Fisker missed some of its milestones. The DoE (under political pressure) then froze the the other $308 million, totally screwing up all their plans -- and everything went downhill from there. (By the way, the $21 million the DoE seized was NOT part of the proceeds of the loan. It came from Fisker's investors). Could they have ever sold anything close to 100,000 cars? Probably not...But since the vast majority of the projected were to be the $55,000 Atlantic -- which is just as beautiful as the Karma -- it's not entirely impossible that they could have sold will over 50,000. And that would have made them tremendously successful.