Summary:

What will be the fate of electric car startup Fisker Automotive after a very difficult year? My speculation: something’s gotta give in 2013.

Fisker's Project Nina, later called the Atlantic, which was never manufactured.

Electric car startup Fisker Automotive took the opportunity of the LA Auto Show to meet with members of the media and divulged to the Detroit Bureau (hat tip Autoblog Green) that it is looking for a “better financed partner.” I have previously heard rumors that Fisker had gotten pretty far in 2012 in negotiations to sell the company, but that the other party backed out late in the negotiation process.

In case you aren’t familiar with what startups generally mean when they tell the press that they need a big partner, there’s actually a long history of this strategy, particularly for those capital intensive cleantech startups. The CEO of thin film solar company Miasole, John Carrington, made a very public to-do last year about how Miasole needed a large partner to commercialize and scale — this year Miasole sold for $30 million in a firesale to China’s Hanergy, despite that it raised hundreds of millions of dollars in VC money. So yeah, quite a few of those investors didn’t fare too well.

Fisker, despite having a good-looking first car and a well known car designer as its former CEO, has had a really difficult year. In addition to its early troubles with Karma software glitches, a terrible review by Consumer Reports, some car fires, a battery recall, and losing a chunk of the DOE loan guarantee, the company in more recent months has also lost a shipment of over 300 cars to Hurricane Sandy, and now has stalled its Karma assembly as it’s waiting for the bankruptcy of its battery maker to get resolved.

Green Overdrive: A Fisker Karma test drive thumbnail

Seems to me that Fisker is starting to get into a pretty troubled financial place. The likely paths for the company are clear: it needs to sell, it needs a large car-company investor, or it needs to IPO in the first half of 2013, or it’ll hit the skids. The company has raised over $1 billion, so it’s got some months of cushion, but with its recent car losses and assembly stall, that runway is being crunched down.

Back a few months ago, Fisker investor Ray Lane had been telling the media that the company wants to IPO in 2013, but I don’t see that happening successfully. And if the company sells, who knows how much a large auto maker would be willing to pay for it? It’s major assets are its Karma and Atlantic designs, but it’s not a technology company like Tesla, and it’s not commercially making the Atlantic yet. Its brand has also become somewhat tarnished in 2012. Which is probably one reason why Fisker hired GM’s former head of marketing last week.

Unfortunately for Fisker, Advanced Equities — a broker that raised a lot of money for Fisker in the past — is going out of business, so can’t raise more needed funds for Fisker. Advanced Equities settled an SEC charge that it misled investors a couple years ago for raising funds for Bloom Energy. I also heard a rumor that Fisker’s last round was raised was a significant down round.

So now what? You don’t have to be a financial wizard to see the writing on the wall. Will a company swoop in and save Fisker? What do you think will happen to them?

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