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Summary:

Fisker’s founders will testify before a House Committee in Washington D.C. this afternoon, while Fisker Karma customers come out of the wood work about how the cars aren’t working properly.

Ray Lane's Fisker Karma

Today is the day that Fisker founder Henrik Fisker, his co-founder Bernhard Koehler, and a couple others will testify before the House Committee on Oversight and Government Reform (they have a live stream video at 2PM EST). If you didn’t catch the Solyndra hearings, the whole thing is a spectacle; all of the testimony is drafted and circulated in advance, and the committee members use the time after the testimony to publicly grill the panelists.

FiskerKarmas2

It’s scripted to the extent that the Oversight and Government Reform Committee already sent me a quote that’s supposed to sum up the hearing before it occurs. Committee Chairman Jim Jordan, R-Ohio, said:

It is hard to understand why the Department of Energy ever thought Fisker was a viable company that should receive taxpayer money. The Obama Administration owes the American taxpayer an explanation as to why this bad loan was made in the first place, and what they are going to do to minimize the loss that taxpayers face.

Well, I do agree with that statement, even if I don’t agree with the need to conduct a long hunt for some political cronysism between Fisker and the DOE over the loan. As I said in my piece on Fisker published last week (A Look Under the Hood: Why Electric Car Startup Fisker Crashed and Burned), I think the search for political cronyism is actually distracting from the disturbing financial story of Fisker’s now defunct broker Advanced Equities, which worked with Fisker’s VCs to raise over $1 billion without much value to show at the end of the company.

Fisker Automotive Adds on $21.5M in Loans from Delaware

Reading through Henrik Fisker’s prepared testimony this morning, it’s also interesting to see his perspective on Fisker now that he’s not working with the company any more. He mentions numerous times in his testimonial that the company sold 2,000 Fisker Karmas that “perform well and customers love them,” and are “operating smoothly and continue to receive fantastic customer reviews.”

That’s not necessarily true. Fisker customers have been coming out of the woodwork and complaining about problems with the cars, and how they’re having trouble dealing with these problems now that the company is in financial dire straits. In March, Karma customer Kelly Stewart actually filed a lawsuit against Fisker and a dealership in Greenbelt, Maryland called Capital Cadillac Company claiming that the car was not performing as expected (the complaint and an exhibit letter embedded below).

Ms. Stewart bought a Karma in March 2012, and three weeks later she said she had electrical, battery, alignment, and heating and cooling problems. In the letter (Exihibit B) from the Maryland dealership to Fisker the dealership exec wrote:

It [the Karma] has been out of service for 87 days even though it is less than 9 months old and has less than 8,000 miles on it. To date the dealer has been unable to correct the problems and it is out understanding that these problems are systemic with these cars.

Problems with the Karma cars have also been documented by Consumer Reports’ second review (the one it did again after the first Karma car it bought almost immediately died), and Consumer Report’s review gave the Karma a failing grade.

  1. Katie – the way you framed this makes it sound like it was a tremendous amount of money that US taxpayers are on the hook for due to Fisker alone. Actually Fisker is a tiny drop in the bucket, and there are drastically more expensive needless subsidies to oil companies, mining companies, agricultural companies, etc. This happens because corporations have too much influence because they can bundle campaign contributions.

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    1. “subsidies” = individuals and companies income NOT appropriated by the government. There a big difference between that and taxpayer money directly lost in these Fisker et al schemes.

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    2. @Barry Clark. This is just a short blog post on this topic. I am aware the loan was just less than $200M that was drawn down. I wrote an extensive story on Fisker here:
      http://gigaom.com/2013/04/17/a-look-under-the-hood-why-electric-car-startup-fisker-crashed-and-burned/

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    3. You are so correct. Thank you

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  2. Karma is a beautiful car, Atlantic, wow. Should have contracted Tesla to build it.

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  3. Iraq only cost US taxpayers about $2 Trillion could go up to $6 Trillion. But oh my god, Tesla and Fisker?

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  4. Peter M. Einstein Wednesday, April 24, 2013

    Once again, Katie, you’ve taken the opportunity to kick Fisker when they’re down — twisting the facts to serve your agenda, without mentioning the fact that (according to what I’ve heard, at least) you apparently have some personal interest in seeing Tesla succeed and Fisker fail. If there were hundreds of reports of Karma’s having major problems, then report on that fact — rather than just make a big deal about one disgruntled owner with an axe to grind. How many times have you covered all the early problems with Tesla’s? Especially the serious problems with “bricking” that cost owners a fortune.

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    1. Once again, @Peter M Einstein, you’re making something up in that I have some personal interest in seeing Tesla succeed and Fisker fail. Are you talking about that rumor that I’m married to someone from Tesla again? And once again, that’s not true at all. This is the second time I’ve had to debunk that. And you’re questioning my facts?

      There’s also more than one disgruntled customer of Fisker Karmas.

      Also I covered the problems with Tesla’s Roadster extensively when they happened:
      http://gigaom.com/2010/10/04/uh-oh-tesla-recalls-439-roadsters-for-fire-concern/
      http://gigaom.com/2009/05/28/more-bad-news-tesla-recalling-hundreds-of-roadsters-for-safety-issue/

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  5. I received car #9 back in Dec 2011. After a few software glitches in the first couple months I have had absolutely no problems with my Fisker. I have put 29 gallons of gas in the car and now have about 9,300 miles. If A123 had not gone bankrupt, Fisker would have continued building and selling cars. That event more than anything else led to Fiskers demise. I believe the Atlantic would have been a big seller. Best design out there for the money. Too bad.

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  6. Ms Fahrenbacher you have a clear axe to grind with Fisker. I even heard that you were banned from their journalist drives because you had an overtly negative bias towards Fisker, and you refused to see the positive side and continually found areas to write something negative or blow things out of proportion.

    Your article has an interesting choice of words: “Publicly grill the panelists”. do you knwo witnesses go this hearing voluntarily and it is an opportunity for all sides to present their story. Lets look at this public video: http://www.youtube.com/watch?v=tjOPN1fKnUY.

    Who do we think got grilled on presenting out of date, irrelevant documents. Looks like Rep Meadows could not hold his Q&A and quickly stated that his Q&A time was up!!!

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  7. Ms Fahrenbacher you have a clear axe to grind with Fisker. I even heard that you were banned from their journalist drives because you had an overtly negative bias towards Fisker, and you refused to see the positive side and continually found areas to write something negative or blow things out of proportion.

    Your article has an interesting choice of words: “Publicly grill the panelists”. do you knwo witnesses go this hearing voluntarily and it is an opportunity for all sides to present their story. Lets look at this public video: http://www.youtube.com/watch?v=tjOPN1fKnUY.

    Who do we think got grilled on presenting out of date, irrelevant documents. Looks like Rep Meadows could not hold his Q&A and quickly stated that his Q&A time was up!!!

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  8. Ms Fehrenbacher, don’t let these spammers/trollers (Nic/John/What?) take up your time. It’s the old “attack the messenger” trick. I love your reporting.

    FWIW, I would have loved for Fisker to succeed.

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  9. Katie,,Fisker is a great automobile. The technology is very advanced, the cars have been well received by the majority of owners….as can be seen by the comments, but the PR battle was lost do to the, relatively speaking, minor set backs that were blown out of proportion by the right wing media. And then knucklehead Romney started beating them even harder. It is unfortunate but the Media has a way of striking down new green programs. Be it wind power, solar power, innovative design in buildings or autos some in the media just have to try and kill it. Is is any wonder why the United States is falling behind in green technology… ? Fisker made mistakes but name me one car maker that hasn’t? They were literally just beat to death and you paricipated…thanks alot!!

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  10. My fiancee bought my Fisker Karma last year in Sept. for my birthday. I have it for a few weeks and then back to the shop. The list of problems are quite lengthy. I have truly had it in the shop more than I have on the road. It stays in the shop at Land Rover in Orlando FL for weeks at a time. Several major parts have been replaced and I get it home this last time and the check engine light is on after only 2days. I really wanted to keep this car, but I can’t see driving a rental more than I drive a car that has a 100k + sticker. It really sucks for those who are making monthly payments on a car that they can’t drive and pay another several hundred a month on a crappy rental. It’s not just politics guys or a pissing match. They have left people stuck with no way out. My Fisker has been at the dealership for the last month with more than likely a “battery issue”. I’m told the parts warehouse is on “lock down”. So I sit wondering what kind of company leaves its customers hanging like they have. Just bailout right…that’s the good ole AMERICAN WAY. I wonder how much money the “big guys” sucked out of the company before they decide to get out! Maybe we should garnish their taxes next year or Levy their bank accounts like the IRS does the taxpayers when we owe them?

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