A look under the hood: why electric car startup Fisker crashed and burned


It was a shining moment for Fisker Automotive. In the summer of 2011, four years after the upstart electric car company opened its doors, its first cars were finally rolling off the factory line in Finland, and the sleek vehicles were landing in the garages of some of the biggest names in Hollywood, politics and Silicon Valley. Actor and Fisker investor Leonardo DiCaprio received one. Al Gore and Colin Powell were next in line.

A couple months after that, boy megastar Justin Bieber got one for his 18th birthday as a present from his manager. The car even had its television debut driven by Ashton Kutcher, playing an internet mogul, on Two and a Half Men.

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

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

That summer gas prices were predicted to rise about 40 percent, leading to a boost in sales of fuel-efficient cars. A year earlier, electric-car company Tesla held a blockbuster IPO, and Nissan’s low-cost electric car the LEAF had gone on sale. The country seemed like it might finally be ready for electric cars, and perhaps ready for the first car enthusiast’s plug-in hybrid, as the Fisker Karma was being called.

But the limelight was short-lived for Fisker. In the months and years that followed, the company spiraled downward, burning its dreams and reputation to the ground — just like faulty parts did to a couple of its cars. Fisker has been reported to be on the brink of bankruptcy, lawsuits are piling up, and a government hearing is reportedly in the works.

There are a lot of crash-and-burn stories in Silicon Valley. It’s in the nature of entrepreneurs, startups and investors to take risks and sometimes fail. But it’s not often that you see such a dramatic downfall.

Those that have been tarnished by Fisker’s demise include venture-capital grandaddy Kleiner Perkins; Fisker’s executives, many of whom had long distinguished careers in Detroit; and Fisker’s broker, Advanced Equities, which helped the company raise hundreds of millions of dollars and has now disbanded entirely. Fisker raised and spent more than a billion dollars over its lifetime.

A handful of celebrities and politicians that championed the company have also been caught up in its wreckage, as has the Department of Energy, which ended up loaning the company close to $200 million. The entire electric-vehicle industry could take a hit because of Fisker.

How did this do-gooder dream that was supposed to combine Silicon Valley-backed tech innovation, gorgeous design, and eco-friendly hot-rod cars turn out so horribly wrong for so many people? That’s what I’ve tried to find out in a dozen interviews in recent weeks with people at the center of the Fisker story.

Summer of 2011

It was in that summer of 2011 — even as the company outwardly was showing some signs of hitting its stride —  that I first started to wonder if something wasn’t going awfully wrong at Fisker. Mitt Romney had just announced his presidential run, a federal grand jury had indicted John Edwards, and we were enduring the second hottest summer in the U.S. on record.

I had been following Fisker since its founding four years earlier, and the company was on the cusp of delivering its first electric hybrid sports car, the Karma, to customers. Though the delivery was running 18 months behind schedule, there was a sense of anticipation among the media, investors and car enthusiasts.

Then two things happened that gave me pause. An auto industry executive that I trusted made me an offhand bet that included the idea that Fisker’s second car — then called Project Nina and partly funded by a Department of Energy-approved $529 million loan — might never see the light of day. Fisker had deep pockets, such high-profile investors and so much media hype — I really hadn’t considered something so shocking. Clearly I lost that bet.

The second unsettling event of the ’11 summer was when Fisker invited the media to watch “the delivery” (re-enacted reality TV- show style) of one of the first Karmas to Kleiner Perkins partner Ray Lane. Outside Kleiner’s offices, in the hot parking lot, Lane held up the keys in celebration of the delivery and talked about the joys of driving his Karma as a large group of photographers, reporters and TV crews captured the moment.

Afterwards, I did a long interview with Lane back in the air-conditioned comfort of the Kleiner offices, where he explained to me his counterintuitive thesis for backing Fisker: Either get the valuation high enough so they don’t get crushed on dilution or get low-cost loans that are high leverage for equity investors. “My partners thought I was out of my mind. But I had a thesis,” said Lane.

Kleiner Partner Ray Lane receives the keys for his Fisker Karma.

Kleiner Partner Ray Lane receives the keys for his Fisker Karma, Summer 2011.

The media learned a couple weeks later that the Karma hadn’t received any of the needed regulatory approvals — so the car wasn’t legally driveable on public roads. It wouldn’t get full certification from the EPA until three months later.

The early days

But to understand Fisker’s missteps you have to go back to at least 2006. Fisker’s founder Henrik Fisker was a well-known car designer formerly with BMW and Ford who had his name on hot cars like the Aston Martin DB9 and the BMW Z8 Roadster. In 2004 he started a luxury-car company called Fisker Coachbuild with his long-time buddy Bernhard Koehler, who was later his co-founder at Fisker. In late 2006, Henrik Fisker started working on a contract basis with Tesla, creating designs for Tesla’s second car, a sedan, later called the Model S.

This was also the year that Al Gore’s Inconvenient Truth debuted, and some in the Hollywood elite were starting to embrace hybrid cars and eco causes. Henrik Fisker has told reporters that he was inspired to build Fisker Automotive after seeing DiCaprio drive a Prius to the Oscars and thinking he should have something more high-end. DiCaprio later became an investor and marketing partner to the company.

In 2006 and 2007, cleantech investing was the all the rage among VCs. Research firm the Cleantech Group called 2006 a “watershed period” for cleantech venture investing. VCs put $3.9 billion into global cleantech startups that year, an increase of about 50 percent over 2005. The annual investment numbers grew even more in the following years, but 2006 was a turning point.

Around that time Kleiner Perkins had a plan to bet a third of its fund on cleantech investing. More than a decade ago, Kleiner made a fortune from investments like Google (s GOOG) and Amazon (s AMZN), and in the early 2000’s was trying to find the next big thing. Some of the Valley’s most well-known investors like Draper Fisher Jurvetson and VantagePoint Capital Partners were also excited about cleantech back then, and had decided to put millions into Tesla, led by charismatic PayPal co-founder Elon Musk.

At some point at the very end of 2007, Kleiner became Fisker’s early flagship venture backer. Musk told PandoDaily’s Sarah Lacy last year that Kleiner actually tried to invest in Tesla before Fisker, during Tesla’s Series C round, but Musk said that Kleiner wouldn’t let him choose the Kleiner Partner for the board seat. Musk wanted John Doerr, but Kleiner’s transportation guy at the time was Lane, who later joined the board of Fisker. Musk ended up going with VantagePoint, and Kleiner ended up funding Fisker. Clearly Tesla’s VC funding, followed by its IPO in the summer of 2010, were significant motivators for Fisker’s investors.

Tesla's Roadster, with VC-backing, was first delivered to customers in Feb 2008.

Tesla’s Roadster, with VC-backing, was first delivered to customers in Feb 2008.

In early 2007, after a chance encounter with the girlfriend of then-Quantum Technologies CEO Alan Niedzwiecki, Henrik Fisker and Niedzwiecki decided to meet for lunch to discuss the possibility of launching an electric car based on the Quantum drivetrain. In late Summer of that year, Fisker Automotive was officially born as a joint venture between Fisker Coachbuild and Quantum.

The idea at the time was ambitious, exciting, and perhaps even a little threatening to potential competitors. A little over a year after Henrik Fisker did design work for Musk’s company, Tesla sued Fisker (Jalopnik called it the world’s most expensive girl fight) for breach of contract and allegedly using the design work to raise funds from venture capitalists and launch a company. The suit went to arbitration, and the arbitrator sided with Fisker.

The heart of Fisker’s business model was in that early deal with Quantum. The idea was to design a gorgeous car, and have suppliers like Quantum provide the technology because off-the-shelf parts from suppliers would help keep costs down.

But there were problems with this strategy: Sometimes, those parts had to be custom-made to fit the design vision, which resulted in higher prices for Fisker. Other times, parts were delivered late or, worse, faulty, but Fisker was locked in to those supplier relationships. Sources close to Fisker have also said that many of the parts were owned by the suppliers themselves, so Fisker didn’t own a lot of the internal technology.

Compare that approach with Tesla‘s strategy: Tesla has invested millions of dollars to amass electric car intellectual property. It can make money selling its core technology to other large auto makers like Toyota and Daimler, and a decent amount of Tesla’s value is in its tech IP.

Toyota's electric RAV-4 has Tesla tech inside.

Toyota’s electric RAV-4 has Tesla tech inside.

Indeed, Fisker’s business model wasn’t the type that funders in the Valley typically like — it’s the polar opposite of the ‘Intel inside’ approach. That so many investors were so eager to back the company has left many in the electric car and tech industries scratching their heads over the years. “It would have only taken a couple a phone calls to industry veterans to have prevented all of this,” says electric car advocate Chelsea Sexton, adding “there’s no excuse for not doing homework. It appears none was done.”

Fast forward to the end of 2012, when Fisker was desperately searching for a lifeline to help it survive, and was bidding itself to Chinese auto giants. Media reports have said, and I’ve heard as well, that the Chinese firms were partly scared off after they took a look under the hood and found that Fisker didn’t own much of its own technology.

Funding an electric car startup from scratch

One of the things Fisker will be most remembered for is the huge amount of capital it tapped into — the at least $1.2 billion it raised and the close to $200 million loan it received from the government.

When Fisker first showed off the Karma at the Detroit Auto Show in January 2008, Kleiner Perkins investors were front and center. Lane told the Wall Street Journal that their early investment in Fisker was more than $10 million and was one of the firm’s bigger investments at the time. Lane also said that the Fisker deal was one of the first in which former Vice President and Kleiner advisor Al Gore provided advice.

But those funds were just the initial drop in the bucket for what Fisker would ask for to grow and produce its cars. In the following years, Fisker raised venture rounds of around $65 million and $86 million. But venture firms couldn’t supply all of the funds for building an electric car, which can cost a billion dollars.

Part of the answer came from the U.S. government. When President Obama took office in 2009, he pledged to support electric cars and low-emission vehicles. His administration used the massive stimulus package to create green jobs and build a so-called clean energy economy. But even before that, a program called the Advanced Technology Vehicles Manufacturing, or ATVM, was created in 2007 and funded by Congress in 2008 and offered loans for companies making vehicles in the U.S. that had better mileage or reduced dependency on foreign oil.

In the summer of 2009, the first wave of ATVM conditional loans were announced, and went to Nissan, Ford and Tesla. Soon after, Fisker itself got approval for a conditional loan of $529 million. Fisker’s goal at that time was to produce 11,000 to 15,000 Karmas per year by September 2011, and 75,000 to 100,000 Project Ninas (later called the Atlantic) in 2012. The DOE ended up only delivering about $200 million of that loan after Fisker didn’t meet milestones for its Karma. Fisker delivered none of its Ninas, later called the Atlantic.

Fisker targets vs. deliveries
Targets Deliveries
Karma 11,000 to 15,000 cars by late 2011 2,000
Atlantic 75,000 to 100,000 cars in 2012 0

Much of the political reporting that will come out on Fisker, as well as a planned upcoming hearing on April 24, will likely focus on how Fisker got approval from the DOE. Was there cronysim, and did Gore play a role? In the past I’ve looked into rumors suggesting Fisker got the loan because it agreed to build a factory in Vice President Joe Biden’s home state and deliver Delaware green jobs. I’ve never found a direct connection there.

But I would imagine that, as with Solyndra, the DOE and the administration trusted the company’s backers and liked the idea of a beautifully designed, American-made electric car. Fisker fit into their thesis of using public funds to stimulate the clean-energy economy and create green jobs.

Joe Biden speaking at Solyndra's ground breaking in August 2010

Joe Biden speaking at Solyndra’s ground breaking in August 2010

The broker

Getting the conditional loan was a key turning point for Fisker. It gave the company clout and the ability to raise additional funds. Soon after Fisker received the loan agreement, it started working more closely with a broker in Chicago called Advanced Equities.

Over the course of three years, according to my sources, brokers at Advanced Equities raised somewhere between $600 million and $800 million of Fisker’s over $1 billion in funding. The sources say Advanced Equities sold Fisker shares to over a thousand wealthy individuals. These aren’t professional investors that are used to taking on startup risk; they are people who did well in life and wanted to invest in the tech-driven dream of a sleek electric car.

One of those investors was DiCaprio, and numerous sources close to the company have told me that Kleiner Perkins partners Doerr and Lane put millions of dollars of their own money into Fisker. Another person that Fisker listed as a Director on a funding filing in late 2011 was Timothy Shriver. In a recorded internal sales call with Advanced Equity brokers from early 2010 that we’ve obtained, Advanced Equities co-founders tell their brokers that the Fisker opportunity is such a good one that they should bring the deal to their best customers.

Of course, many of the investors through Advanced Equities weren’t household names in San Francisco or Los Angeles. Chicago’s prepaid college saving’s fund, the Illinois Student Assistance Commission, invested $10 million. An investor named Daniel Wray invested $210,000, and later sued the company and its broker.

Fisker’s venture backers commonly pitched in to help Advanced Equities. Sources tell me that it wasn’t unusual for investment calls with Advanced Equities and potential investors to feature Kleiner’s Lane, as well as NEA’s Scott Sandell, sharing Fisker’s vision.

If you asked venture capitalists in the Valley around that time what they thought about Advanced Equities, a common response was that it didn’t have a very good reputation — “snake oil salesmen” was the term often used. I’ve long wondered why Kleiner and NEA would actively work with a broker that had a weak reputation. Advanced Equities brokers, for their part, made millions of dollars in sales commissions from these deals.

Chicago skyline

It wasn’t until December 2011 and into 2012 that the more dubious efforts of Advanced Equities became clearer to Fisker’s hundreds of investors. The last few hundred million dollars of Advanced Equities’ fund raising for Fisker, starting with the D-1 round, was what brokers call “pay to play.” As Fisker was running into technical, delivery and political problems, its valuation was quickly declining. But the company still needed more money, so the brokers went back to its current investors and said: Unless you give this more, your current shares will be diluted and your preferred stock will be converted to common stock.

It was essentially a gun to their heads. This is why investor Wray sued Fisker in February 2012, alleging he was on the receiving end of this tactic. In his lawsuit, he says Advanced Equities sent him a letter dated Jan. 18, 2012, stating that he needed to decide if he wanted to invest in Fisker’s next round, and pay around $84,000 by Jan. 27, 2012 — a little over a week from receiving the letter. He also says that Advanced Equities assured him that he would have anti-dilution protection. According to the audio clip from Advanced Equities’ internal sales call in early 2010, Advanced Equity leaders say that the Fisker deal will “suffer no dilution,” and was “a dream scenario.”

That dream would soon end. In September 2012 after Fisker closed on $1.2 billion in funding, the bulk of it organized by Advanced Equities, the SEC charged the broker with misleading investors when it raised money for another company back in 2009 and 2010 (Bloom Energy). Advanced settled, agreeing to pay $1 million, and its co-founders were personally fined. Two months later Advanced Equities closed up shop.

The public problems start

In the summer of 2011, Fisker cars finally start rolling off the production line — Lane got one of the first, and so did DiCaprio, Gore and other luminaries. By October, Fisker said about 40 Karmas had been shipped to the U.S. from the factory in Finland, and before the year was out, at least 200 people had Karmas.

But this was still a lower number than expected — delayed regulatory approval was part of the problem. As a result of the delays, Fisker’s battery supplier, A123 Systems, had to lower its yearly revenue guidance.

Ray Lane's Fisker Karma

Ray Lane’s Fisker Karma, Summer 2011

At the end of the year, a dark cloud appeared over Fisker’s celebrity parade. In December, 239 Fiskers were recalled because of a faulty battery hose clamp. The news was alarming, but Tesla had faced the same type of recalls in its early days, and so customers and the media were somewhat forgiving.

Then another red flag: As the ball dropped on 2011, I noticed that Fisker was quietly raising more money using Advanced Equities. That seemed unusual because the company was now delivering its cars, meaning it could bring in revenue, and it had already raised so much. It would take another month for me to figure out why.

Fisker in February 2012 confirmed media reports that its DOE loan had been frozen after $192 million because it hadn’t hit the milestones with its Karma. The last payment Fisker had received was all the way back in May 2011. Many of Fisker’s investors are now wondering why the DOE wasn’t more vocal about the frozen loan when it happened back then, as they had continued to fund the company based on the assumption that the DOE loan was still moving forward.

Regardless, the confirmation of the frozen loan kicked off one of the worst years — both self-inflicted and just plain bad luck — for a startup I have ever seen.

Founder Henrik Fisker stepped down as CEO, and he was replaced by an auto executive from Chrysler. Six months later that executive was replaced by a third CEO, who previously worked on the Volt at GM. Fisker stopped work on its second car and laid off all the workers in its Delaware factory. (When this story was published, the DOE still has a note on its ATVM page saying Fisker created 2,000 permanent jobs in Wilmington, Del.)

In the spring of 2012, Consumer Reports bought a Karma, and when it broke down after less than 200 miles, the magazine understandably gave it one of the worst reviews in automotive history. One of the problems with the Consumer Reports’ test car involved the battery. But the battery issue turned out to be much more widespread that just the review car, and Fisker’s battery supplier decided to replace faulty battery cells to the tune of $55 million.

Later that year, A123 Systems itself went bankrupt, causing more problems for Fisker. Fisker claimed that A123 Systems owed it $140 million, but a bankruptcy settlement reduced that to a paltry $15 million. Chinese giant Wanxiang wound up buying A123 Systems; adding insult to injury for Fisker, sources have told me that Wanxiang also looked at, but seems to have passed on investing in or buying the electric car company.

That summer, Fisker also recalled a cooling fan after it caused a slow-burning fire in a Karma in Woodside, Calif. Watch the disturbing video of a fireman putting out the flames. In hindsight, Fisker is lucky no one was killed while driving its vehicles.

Then there was the just plain terrible luck for the ironically named Karma: Super Storm Sandy wiped out 338 of its Karmas in storage in New Jersey. The cars first drowned, and then caught on fire — salt water damage caused a short circuit that was spread to other cars by high winds, Fisker said at the time.

With all of this happening in public — and in a presidential election year — Fisker’s struggles became highly politicized. The company was mentioned numerous times in presidential debates and speeches leading up to the election. Republican nominee Romney called Fisker and other DOE-supported companies losers.

Where did all the money go?

Fisker had a phenomenal amount of funding in its coffers — so where did all the money go? It’s no doubt expensive to launch a car company, but the way Fisker spent the money didn’t seem to create much lasting value.

The company didn’t seem to invest substantially in technology innovation or tech IP, and seemed to spend a disproportionate amount on suppliers. For example, numerous sources have told me that the company paid upfront for 15,000 of some of the parts for its planned 15,000 Karmas. It ended up only selling around 2,000 of the cars. I’ve also heard that Fisker paid some funds upfront to have BMW make engines for the 100,000 Nina cars it hoped to produce — in the end, Fisker didn’t deliver a single Nina.

Costs to build each Karma also creeped up because the company missed its volume targets, and because engineering had to change designs around supplier constraints. No wonder the company ended up adding $20,000 to its initial sale price.

Expensive hires may also have sucked away chunks of Fisker’s funding: Sources I’ve talked to say that Fisker filled the upper levels of the company with seasoned auto executives from Detroit. At the high point of Fisker, the company had around 300 employees, plus dozens of contract staff. Bringing in a certain amount of the old guard could help a car startup ramp up quickly, and also impress potential investors with “industry names.” But those people are also used to big auto-industry budgets that included extensive travel and salaries — that’s the opposite life of a tech startup.

The end

The bottom line for Fisker: It sucked down over a billion dollars and delivered around 2,000 cars to customers that now have few places to turn if those cars have mechanical problems.

At Kleiner Perkins, the dust is still settling. Reuters reported earlier this year that Kleiner partner Doerr apologized to his limited partners (groups that put money into VC funds) for a weak fund performance and promised to do better in the future. Lane has transitioned away from bringing in new investments for Kleiner’s future fund. Spooked by bad deals, venture firms across the board pulled back on cleantech investing by a third in 2012.

There are political repercussions, too. The DOE was on the hot seat when Solyndra went bankrupt, and now will be equally under scrutiny over Fisker. The ATVM program has essentially been frozen, and the DOE says that despite the fact that it has $16.6 billion remaining in the fund and seven applications pending, it will not award any more loans.

The worst part of the Fisker story could be the fallout for electric cars. Helping reduce America’s dependence on foreign oil and lowering the carbon emissions of personal transportation is necessary. Introducing more electric cars is one way to do that. But with the industry in such a fragile, nascent stage, Fisker could wind up delivering the knock-out blow.


Craig C

Tesla is next, they only made money because of credit sales to other manufacturers. They expect those credit sales to end next year. They are still dependant on panasonic laptop batteries. Some day maybe, but not tomorrow.


Tesla is nothing more than Mazda lookalike! Sorry but all that for $70,000 plus. Nothing special about the design,limited range, constant technology hiccups, pay per mile to get your car fixed. Which company that makes $11m in profit ($85m from credit sales), unprofitable car, sold 5,000 cars trades at 10bn valuation..2 times the valuation of FIAT that sells 2m cars…not normal. How can a car company claim to trade on tech multiple since the output is a car that is limited in sales due to being electric and no real lease???

Hardley T Whipsnade III

Well I’ll place a little wager about TESLA . I’ll bet that within the next three years … or at least by the time Obama’s out of office …. that TESLA will have gone down in a ball of fire that’ll make the Fisker fiasco look like a Disney movie script in comparison

Any takers ?


Not only is Tesla not going down in a ball of fire in 3 years, but it will redefine the auto industry. Go test drive a Model S, and you will never want to drive a gasoline car again. Instant, powerful acceleration with no gear changes that makes a Panamera GTS feel slow. The interior is spacious with seating for 7, or tons of storage. On top of that, the car is gorgeous. You never have to go to a gas station again. You leave your house with a full charge and over 260 miles of range every morning. If you want to go farther, you get 150 miles of range in 30 minutes at a SuperCharger for FREE. After test driving it, my 2012 Porsche 911S is going up for sale. The forums are full of BMW M3, M5, Audi S7, and Porsche owners who couldn’t believe what they just experienced after a test drive, and immediately switched. There is a reason multiple car reviewers have awarded it car of the year and Consumer Reports gave it the highest rating of any sedan ever. Before you knock Tesla, go take a test drive. You will either buy the car or the stock after that….


What you forgot is the bad role of YOU – the media – in the whole story. Instead of cheering for the courage of an entrepreneur who proved that an electric car with range extender is a possible bridge technology while all the established carmakers say it’s NOT possible yet, the media only reported about the initially smaller problems which caused minor sales and increased the chance to get into real trouble.
Example: Did you ever read anything about a Porsche or a Mercedes who burned on a random parking lot somewhere for what reason ever? No – that’s no news!
But when a Fisker burns down (not caused by the electrical powertrain) it is news – bad news. Got it ???
BTW: I drive a Fisker and it’s an absolutely reliable and extremely efficient car!
Very sad that the once more the media was able to crush the destiny of future technology only by seeking for the bad (news)
Mathias Berkel

Alex Ziegler

I find it so interesting this article and most all of the comments have no input from “real” owners” and drivers of the car. I took delivery at the end of 2011 and have loved every minute of driving my Karma since more than 5,500 miles averaging 114 miles per gallon. Yes, I plug in to my simple 110 volt outlet each evening when I need a charge, but I can go nearly 300 miles w/o stopping should I need to. Less than 6 stops for gasoline in 16 months. Has anyone noticed that there were 16 million cars recalled for defects this past yer alone? So, the author makes big deal over a couple of cars with defects out of 1600 produced. Realistically, for a brand new car this is a very small percentage of cars with a real problem. My wife’s BMW 328 is less than 2 years old and just was part of a huge campaign to replace a battery cable that could cause the computer module to fail while driving the car. Only last year BMW sent out an Urgent notice to ALL M cars produced over a year period to stop driving the car immediately until they had the dealer make a repair. Didn’t make headlines did it. I think the company could have been better run, but the product is way better than than this author is painting the picture.

troy johnson

Part of the answer came from the U.S. government. When President Obama took office in 2009, he pledged to support electric cars and low-emission vehicles. His administration used the massive stimulus package to create green jobs and build a so-called clean energy economy.

really? did that actually happen, or was that the good intention? sometimes I think that this entire industry is built on good intentions…

dale G

I love My 150 mpg Fisker… Get stopped by kids on skateboards , old ladies, and yes, hotties! Good job media and big oil burying a great vehicle. Try to start your own business in our critical society. IMPOSSSIBLE for cars as you have proven. My hat is off to Mr. Fisker for trying. My wife and I LOVE our vehicle and we have owned many sports cars. Keep writing your critical articles…that’s easy. Try and develop your own freking hot car…GOOD LUCK! Thanks Henrik, we love our car!


Totally agreed !!!
Thanks and have a look to my comment below….

lisa runnels


Richard Stein

Ok fans, the Fisker experiment, from the standpoint of automotive engineering, component sourcing, or even high school physics, was pretty wrong in concept and execution, but maybe that’s not the point. The screaming “success’ is how the company was able to get their hands on this much money without having to prove anything related to the product.

Low-end outfits like mine, trying to snag an SBIR (federal small money grants) have to submit to both a fiscal, personal and technical strip-search, where hand-waving arguments simply don’t cut it, and each stage of (still small) money requires verifiable performance. If I had a decent innovation in an automotive component, or a complete design, I’d still have to proceed through lab demos to prototypes before daring to say I had a product. A billion bucks may not seem to be a huge deal in either federal expenditure or in the context of a major car company, but an amount in that range, spread in the legitimate R&D world has significance, and can result in verifiable innovation.

Admittedly, a sexy, expensive loss-leader on wheels, even in low production numbers, may be a great marketing idea, and valuable in the political sense as well, but gosh, didn’t anyone care about content? The fallout from this, Solyndra, and quite possibly several other heavily-funded grand ideas is not just the loss of big pots of public and private money, but the creation of a snake-bit and conservative economic paralysis in exactly those technological areas that are and will be vital in the near future.


Huh? PrivCo release this yesterday at 5am to my inbox with uploaded links to 11,00 pgs of government docs they filed Freedom of Information Act lawsuit for. You’re jumping on that ;linking to blogs like you always happened to do a story on Fisker 12 hrs later following their roadmap?

And giga just deleted my post on this 2 hours ago. Dare you to delete this one too. I subscribe to GagoOm Pro and you do great research…why stoop to pretending you did Freedom of Information Act lawsuits and months of legal fees like privco then delete your paying users for calling you out on it? Delete this (screenshot taken) and it’s on every blog on the web.

Get your values together.

Katie Fehrenbacher

No one deleted your comment. I didn’t use freedom of information act documents. I used my own reporting from 5 years. And Ive been working on this story, as they have too, since the news of the potential bankruptcy came out the other week.


All original Fisker government docs – Loan Agreements, Delaware Loan, FTC Recalls, Fisker A123 (battery supplier) docs, all on PrivCo last night – I was stunned reading them. Also a Infographic Timeline of Key Events and doc screenshots. Amazing research. Government should NOT be VCs. And if they are and massive loan is in default THEY HAVE TO F-ING ANNOUNCE IT, not secretly modify / extend/ waive production requirements etc. and wait until bankruptcy filing for all of us on hook for loan to find out for the 1st time.

FYI all the docs and great infographic here. I printed 3,000+ pages of docs, it’s sickening to read what our govt did (applies to Democrats AND Republicans too under Bush forking over billions to Wall St. In weekend meetings in 2008 too.) Not partisan. Read the Fisker original docs privco apparently had to force them to produce under Freedom of Information Act to release the truth yesterday morning:

Aaron Williams

I would be interested to see a comparison contrasting Tesla with Fisker. As an owner of a Tesla Model S I couldn’t be happier with the car or the company. From what I have been reading, it looks like Tesla is outselling most of the other auto manufacturers in their class.

I am very familiar with the Fisker Karma since a relative bought one. Whereas the Karma has excellent styling other areas of the car are lacking. The interior is quite cramped and there is little storage room. I, being 6’2″ can’t fit in the back seat and the trunk is tiny. Even the front is a bit cramped with a cockpit like feel.

The touch screen on the Fisker is problematic at best, and there have been many problems with the car. My relative has had to take the car in multiple times, sometimes towed in, to deal with various issues that have cropped up, all in under a year.

For a so-called environmental car the Fisker Karma gets terrible mileage on gasoline, only 20MPG. On battery, according to the EPA, it only gets 33 miles. Also, for a car with so much horsepower and torque, the acceleration is not that great, especially at freeway speeds. The car is extremely heavy as well (over 5300 LBS). It’s fun to drive, though.

The Karma was also released far too early. The early version had a lot of serious issues, with the software constantly crashing or otherwise being unusable.

I have had a few minor issues with my Tesla which were easily taken care of (it had a rattle in the glass panoramic roof and needed an alignment). While the Fisker Karma is bigger than my Tesla on the outside the interiors couldn’t be more different. My Tesla is quite roomy with an amazing amount of storage space. The user interface is well thought out and it is an absolute joy to drive.

Of course the biggest difference is how the two companies operate. I have a couple of friends at Tesla. Tesla worked hard to develop most of their IP in house. They designed their own motor, controller and battery technology and make more of their own parts than most other auto manufacturers, giving them much better control over their supply chain and quality. Tesla, also being born out of Silicon Valley, used its funds wisely, doing everything they could to save money.

When I took the factory tour they were proudly saying how they bought 10 used cranes for $60K rather than buying new at $100K each, for example. I think the fact that the top executives were not from Detroit is a good thing. They’re not afraid to try new things and


The cars are beautiful. I hate to see the story end this way. I wish someone would adopt the styling.

Jack Rivkin

AnAn accurate picture as usual.
The role of Advanced Equities should have been a bigger signal. Henrik Fisker was and is a designer. The car design came first. What went inside it was an afterthought and included no real innovation.
The role of the govt in both Tesla and Fisker is difficult to understand. The objective was supposed to be the creation of vehicles in a price range for the average consumer. When will that happen?
There is little understanding or incorporation of the ultimate evolution of power trains and fuel sources. Batteries as a way to power cars really makes no sense. Hybrids that simply use the battery as a pass-through for the energy being created make a lot more sense, particularly if the ultimate best fuel source for the environment and costs has to be hydrogen. Looks like the Japanese and German car manufacturers are moving in that direction with fuel-cell vehicles on the road with hydrogen fueling infrastructure in 2015.

Sean Scott

Very thoroughly researched piece. Although having driven both a Tesla and a Fisker the difference is night and day. While the Tesla feels like a product from another world, the Fisker’s charm is only skin deep.

While i get the sense that the article points to mismanagement and maybe some poor structural choices (source vs build) at the end of the day the Fisker product as a EV or Hybrid car was nothing to write home about beyond it’s outward appearance.

Frank A NYC

“But I would imagine that, as with Solyndra, the DOE and the administration trusted the company’s backers..”

Is that all is required to get government funding? How about some due diligence on the company, the principles and maybe, just maybe, the product?


Sad to see a company that is trying to innovate go down, but I never thought they could compete against Tesla.

Puneet Sinha

A nicely researched article Katie. Overhype with little substance behind the workings has undone many companies..and Fisker followed the suite. Although first profitability of Tesla is a shining star in the EV world, failures of Fiskers of the world definitely provide a big blow to the nascent EV market. The worst outcome of such things being a negative environment for other startups (many of them with sound technology and workings) in the cleantech area.
Tales of Fisker and Tesla should also highlight not to always “put all the eggs in one basket”. EV market is at best niche however there are other automotive applications for batteries with much larger scale such as start-stop vehicles/ plug-in hybrids. Such applications may not be the talking points for DOE or other funding agencies, they are very viable and have near-term applicability.


good story , not as good as the bricklin story, but similar, lots of promises to politicians, jobs, huge potential, same with Delorean, the car industry has many may such adventures.

Salik farber

Fisker problems started with a lack of understanding car business.Having received 10 million from Kleiner is a joke for this kind of industry.Receiving money in small drops even when it adds 1 billion is like a horse with enough water for its survival but not enough for it to be able to work.Fisker proves that the move the gov made with GM was the right one.Put in enough money so they can survive and work and the country didn’t lose years and years of engineering development(which price is impossible to add up).


While this is a very well written article that give a pretty good history and touches on some of the issues that led to Fisker’s demise, it left out the one issue that doomed it from the beginning:

The battery technology is just not there.


Exactly right and every smart EV insider will tell you this. Otherwise, excellent article.


“Just Not There” in every sense of what your average car buyer is looking for when making a purchase…

Range (energy density of current tech compares incredibly poorly to petrol), Reliability (refer to multiple recalls due to battery issues), Durability (10 years at best to replace the most expensive part of your car is not acceptable), Resale value (see durability above), Charging time/Convenience (you can get another 300 miles from a petrol engine in about 5 min, 8+hrs from EVs). It’s just not there…yet.

You say that “plenty of EVs are doing just fine”. Sure, but that depends on what your definition of “plenty” is. The current combined EV/Hybrid/Plug in/etc. cars on our roads is a miniscule number compared to the total.

The current, “satisfied” owners could mostly be described as: first adopters/enthusiasts/true believers. They are willing to put up with the short comings of their vehicles because they really want it to work. Good for them.

The remainder of EV owners that their car truly works for EVERYTHING that they need without any sacrifices, would be served just as well with a scooter, public transport, bicycle, or walking.

I want this technology to work, but it’s just not ready for prime time until there is a new generation of battery technology that addresses energy density, charging time, & longevity.

Until then it is and will remain a niche market.

Doug King

“Just not there” in what sense? Plenty of EVs are doing just fine with existing battery technology. While batteries continue to improve, the main hurdle at this point is cost. Plug-in hybrids like the Chevy Volt mitigate range concerns with a backup ICE generator. (This was also the approach Fisker attempted, but crudely in comparison.)

Perhaps one of Fisker’s many mistakes was partnering with a start-up battery maker that had problems scaling production. However, the state of battery technology is not what cause Fisker’s downfall.

Doug King

Great article, Katie. I was at that same Ray Lane event you were at back in July of 2011. (Here’s some vids I took: http://www.youtube.com/watch?v=weBtcZIWY00&list=UUKkmr9mBjwAmAquhDDtEMYg&index=13)

From the Fisker folks, I could sense that nervous excitement of finally delivering the first cars. It was fun. Though through a conversation I had with a Fisker engineer at the event, I could tell engineering of the car was rather compromised; performance and efficiency took a backseat to styling.

A few months later, when it became clear that Fisker had pushed the car out before it was ready, coupled with poor communication from the company, it was apparent their chances of success were rather low.

Really disappointing. The idea was pretty good, but the execution left much to be desired.


Can you say DE LOREAN !! Starting a car company from scratch is nye onto impossible. Hell…some already existing car companies struggle. Ferrari can build fewer than 10,000 cars because the get $ 200,000 a piece. Run of the mill priced cars need to sell a 100,000 to have a shot at succeeding. Quit wasting money on these fly by night auto startups.


Some of us went on record many times that the company had no chance to sell 15,000 Karmas in 2011 because an unheard of car company couldn’t possibly do that — especially given the market segment for such a car is nowhere near large enough to support such a number of sales.

One of the great mysteries surrounding Fisker was the credulity of “expert executives” touting such a figure and anyone outside the company believing it was ever plausible. You were talking a $110,000 (and up), 2+2 “sedan” with a minuscule trunk and some limited green credentials based on the Volt-like powertrain (and too-much-like-a-Volt performance, by the way).

I have no real idea why Fisker was being taken seriously in 2010 or why the execs weren’t forced out even then. Perhaps something good could’ve come of the company.

Brian W. Crumley

I think Tesla will keep the future of Electric Cars safe. The issue with Fisker is that it was all design and no engineering. It was great looking product that didn’t work that well. Look at its specs, its range with gasoline is less than the Model S. And its also has a slower acceleration.

John H.

The Fisker’s problem is no efforts to keep costs under control. Tesla in latest 10K filing claims that they do not maintain long time contracts with most of their suppliers. That mean that Tesla could ditch under-performing ones in a blink of a eye.

And look at all the vertical integration efforts Musk is trying to implement. Even service(and sales too) are done by company. So do motors, battery packs, bodies etc also produced by Tesla…

And work conditions at Tesla – lots of temps, high pressure environment promoting long hours plus demanding management.

As result Fisker by spending 1.4B $$$ got a car that got manufactured mostly by 3d party contractors. Tesla on the other hand, spent just a bit less then that, but got it own factory, it own network of service centers and was producing all major components by itself. Not to mention all the IP that development brought.

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