What followed those milestones has been an interesting mix of attention on Tesla from the media and bloggers — including surprise, extreme 180-degree about-face, and a general lovefest — as well as attention from Wall Street, which bifurcated into newly won-over Tesla-believers and disturbed Tesla shorters. What most of these people fail to realize is that the road to true innovation in the auto industry takes a very long time.

On the blogging front, for example, in a Business Insider post on Wednesday called What Everyone Got Wrong About Tesla, a writer chronicles the criticism of Tesla over the years. The writer didn’t include my least favorite article from all of 2013 written on Tesla, by Henry Blodget, editor-in-chief of Business Insider, called “The Tesla Nightmare Shows Why Today’s All-Electric Cars Are (Basically) Dead On Arrival.”

It’s not that electric cars won’t struggle (see my long investigative piece on Fisker), but that many people just don’t get how the ecosystem, technology, and marketplace work and are so quick to make declarations about electric cars for the sole purpose of getting attention and — if you’re a blogger — page views. Tesla has actually emerged as a success story, not in the last week, but gradually over a decade by overcoming hurdles every day.

Another company took a very long time to twist and turn, and finally come out on top, too: Apple. And some of Tesla’s most gushy recent love-fest posts are about its comparison to the design-centric gadget maker: Tesla is the new Apple, Would Apple really buy Tesla? (no), and Elon Musk is the new Steve Jobs. Like the legions of Apple and Jobs fanboys, Tesla and Musk are now on the way to developing their own fanboys that will track their every move and product.

When it comes to investors, short interest (the amount of shares that investors have sold short, expecting the stock to drop in price) in Tesla since the company went public in 2010 has been nothing short of remarkable. According to Bloomberg, “short interest in Tesla was 40 percent of available shares as recently as April 19, more than 11 times the average of companies in the Russell 1000.”

But following Tesla’s milestone’s last week, short interest dropped by 17 percent in the five days through May 13, noted Bloomberg — Tesla shorters were forced to “buy $276 million worth of the automaker’s shares, pushing the company toward the biggest rally in the Russell 1000 Index (RIY) this year.”

I don’t remember a company in recent years, other than maybe Apple, that has had such massive skepticism from media and investors, followed by such intense love. This week there’s Apple-style product rumors buzzing about Tesla showing off a self-driving Model S, and launching a battery-swapping service (that would actually be cool). Usually it’s the love-hate relationship unfolds the other way around. The internet is a weird place.

Tesla actually made it past its most recent dangerous startup phase over half a year ago. Back in November 2012 Tesla CEO Elon Musk said that Tesla had “made it through the Valley of Death,” and reached its goals for scaling up Model S production.

Musk might be a media and stock puppeteer (see the 5 lessons from the NYT, Tesla dust up) but as a leader of a public company it’s not in his best interest to publicly lie. Tesla was clearly on its way to success back then — after nine years of overcoming hurdles. The earnings and stock are just a delayed sign of that performance. And before that Musk made it through the darker periods of the company in 2008, by personally floating the company and even borrowing money from friends.

The reality is that Tesla has just started on its full court press on announcements, media coverage, and stock growth, and is hoping for a marketcap that rivals the big auto companies. These are 10 milestones that Tesla hopes will enable it to hit a $43 billion marketcap.

Tesla will also no doubt hit some hurdles as it tries to transition into a larger auto maker — if anyone remembers it delayed its Model X launch by a year to the end of 2014. But it’s actually pretty hard to be an independent new automaker, and true game-changing innovation is even harder and takes a very long time.

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Adding energy storage reflects the evolution of the company, which started off as a solar cell and panel maker before it entered the power plant development business. SunPower has carried out pilot energy storage projects in recent years and worked with different energy storage technologies, including advanced lead acid and zinc bromide batteries.

But lithium-ion batteries “will likely be the first technology to have an impact,” said Jack Peurach, executive vice president of products. The emergence of electric cars plays a role in making lithium-ion battery the front runner for being paired with solar, he added.

SunPower & Flextronics Factory in Milpitas, CA

SunPower executives didn’t provide details, such as the timing and battery suppliers, for its energy storage plans. But the discussion puts SunPower on a growing roster of solar energy companies that are offering or plan to offer energy storage.

SolarCity, for example,  has been bundling lithium-ion batteries from Tesla Motors with its solar energy systems and applying for a California program that subsidizes energy storage installations. One Roof Energy is working with battery maker Silent Power to roll out products. Korean conglomerate Hanwha Group, which runs a solar panel manufacturing subsidiary, is an investor in both OneRoof and Silent Power. SunEdison has done a pilot project with a battery system from startup Seeo.

Energy storage will be part of SunPower’s plan to expand its reach in the commercial and residential market, where it sells power purchase agreements or leases via its dealers or its own project development business. The company designs the power purchase agreements for its commercial and government customers and leases for homeowners. Power purchase agreements and leases work in similar ways: business or home owners sign a long-term contract of up to 20 years and pay a monthly fee for the solar electricity from the SunPower solar energy systems on their rooftops.

SunPower’s foray into the energy storage business will prompt more comparison with SolarCity, which started in 2006 as purely a solar installer. SolarCity is most active in the residential and commercial markets, but it scored the first utility project last year. As a result, the two companies have been competing more intensely in recent years.

In fact, a lawsuit filed by SunPower against SolarCity and five people last year highlighted that rivalry. The lawsuit accused five former SunPower employees of stealing confidential data and brought the data with them when they went to work for SolarCity. The two companies settled on Dec. 31, 2012, and a judge dismissed the lawsuit in January, SolarCity said in its 2012 annual report. It didn’t disclose the amount of the settlement.

SunPower executives didn’t say whether they will sell energy storage in the United States first or in other regions. Werner said that, for now, energy storage makes financial sense only in markets that offers government incentives. That would include California, Germany and Japan.

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On top of that Tesla says CEO Elon Musk plans to buy $100 million worth of common stock, of which $45 million will be bought in the offering, and $55 million will be bought directly from Tesla.

Tesla says it will use part of these funds — the notes specifically — to pay back the entirety of the loan to the Department of Energy early, and will also use some of the funds for other general corporate purposes. Tesla raised a $465 million loan from the DOE and has previously said it will pay that back in half the time it’s been allotted. So, that goal of half the time, has now been condensed even further.

Tesla has talked about raising more money for awhile, and many have speculated that company would want more funds to grow. This will be Tesla’s fourth offering (an S-3!). Back in 2011, Tesla also used a follow-on offering combined with a private placement to raise funds, and did so again, raising $221 million, in late 2012. The company went public in the Summer of 2010.

Tesla’s shares have been on a tear recently, and traded over $90 per share this week. On this news, Tesla stock was up 5.49 percent in after hours trading.

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Tesla’s shares rose at one point almost 30 percent in after hour trading to over $70 per share. Earlier this week Tesla’s shares had hit an all-time high of over $60 per share.

When Tesla held its IPO and started trading back in the summer of 2010, it went public at $17 per share. It’s $70-per-share milestone in after hours trading is more than four times that initial IPO price.

Tesla and CEO Elon Musk have ambitions far higher than this current marketcap and stock price. Musk has a payout package that allocates shares when Tesla’s marketcap adds $4 billion up until it reaches $43.2 billion, along with accompanying operating milestones.

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• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013
• Electric vehicle outlook: 2012–2017

For the quarter, Tesla generated $11.25 million in income, compared to a net loss of $89.87 million for the year for the first quarter of 2012. On a non-GAAP basis Tesla said net income for the quarter was $15.42 million.

Ten-year-old Tesla also set a revenue record for the quarter, which isn’t surprising given this was the first quarter where it had a full three months of full-scale Model S production. Tesla generated $561.8 million in revenue for the quarter, compared with revenue of just $30.17 million for the first quarter of 2012.

There’s been a lot of talk about how much of Tesla’s revenue and profit for this quarter would come from the sales of zero emission vehicle (ZEV) credits to automakers. The LA Times reported that Tesla can make $35,000 per Model S car sold in ZEV credits, which could generate up to $250 million for Tesla this year.

Tesla addressed that point in its shareholder letter and said that Tesla generated $68 million from ZEV credits for the quarter, or 12 percent of revenues. If Tesla generated that amount for each quarter it could bring in $272 million from ZEV credits for the year. However, Tesla said that it expects its use of ZEV credits to decline because the ZEV credits only apply to a sixth of international sales, compared to half of U.S. sales.

Tesla is so confident of its manufacturing capabilities this quarter that it raised its guidance for the year by 1,000 cars. Tesla now says it expects to ship 21,000 Model S cars, instead of 20,000. Tesla says it is receiving orders of over 20,000 cars per year.

Tesla’s margins are also improving significantly, and the company has a target of 25 percent gross margin by the end of 2013. This quarter Tesla delivered 17 percent gross margin, up from 8 percent in the last quarter of 2012. That 25 percent margin is without ZEV credit, Tesla noted.

Tesla shares jumped almost 30 percent in after hours trading on Wednesday to over $70 per share.

Tesla CEO Elon Musk said in the call with analyst and media:

• On ZEV credits: Musk said he expects a decline of ZEV credits in Q2, and Q3 and potentially no ZEV credits in Q4.
• Tesla plans to spend $200 million in capital expenses in 2013, and that includes things like Model S factory tooling, new product development, and building out the Super Charger Network.
• Musk said Tesla has no plans right now to raise more funding.
• Tesla has a seen a meaningful improvement on demand because of the financing product.
• 10,000 Model S sales are expected from Europe, 5,000 are expected in Asia. “China is a wild card,” said Musk. Up until the second quarter of 2013, all of Model S sales have been in the U.S.
• Tesla’s top focus this year is on improving the efficiency of production of the Model S.

Updated at 3:10PM PST, with information from Tesla’s call and the stock price.

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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.

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, 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 and Amazon, 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.

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.

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.

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

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.

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, 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.

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Tesla will guarantee the resale value of the three-year-old Model S (at the same price as a Mercedes S Class), and Tesla CEO Elon Musk said he will personally stand behind the guarantee. The monthly payment for the three-year term could be between $500 and $600 per month, and Tesla says the tax credit can cover the upfront cost in many markets. Already some are pointing out that it could be much higher than that.

Musk has been talking about the potential for leases for awhile. In the company’s earnings call last month Musk said that in 2014, “leasing will be a big factor” in the U.S., and will be a moderate part of revenue in 2013 in Europe.

Customers who accept the leasing deal can also decide to own the car after the three-year period. If customers want to keep the car after three years, they can continue to make the monthly payments and would own it around year five, Musk said on the call.

The financing option is sort of a hybrid between leasing and ownership, and Tesla describes it as “a new kind of financing product that combines the surety and comfort of ownership with all the advantages of a traditional lease.”

The leasing option is interesting because it could help more mainstream car buyers, and customers that don’t want to put down as much money upfront to purchase an electric car. Leasing deals have helped deliver solar panels on rooftops, and a third of the new solar panels installed in 2012 were owned by third parties.

We’ll update this with more information from the company’s call this afternoon.

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Tesla will continue to sell the Model S with 60 kWh (230 miles) and 85 kWh (300 miles) battery packs. Customers that already purchased the base Model S will get a 60 kWh version, but with software that will maintain the battery level to its 160 miles range.

The decision means that Tesla’s least expensive Model S will start at $62,400, instead of in the $50,000 range. Perhaps the move could also help boost Tesla’s margins on the Model S, which was around 8 percent at the end of 2012, and which Tesla is hoping will be closer to 25 percent later this year.

Clearly Tesla’s early customers, at this stage, care more about having a larger range for the car than shaving off $10,000 from the car. Perhaps that could change for Tesla’s third electric car, which is supposed to be a more low cost mainstream car.

At the same time that it streamlined its product line up, Tesla also announced that it has boosted its earnings guidance for the first quarter of 2013, due to 250 more Model S cars being delivered than expected. While Tesla had already reported that it expected to reach profitability on a non-GAAP basis (excluding non-cash options and warrant-related expenses) for the first quarter of 2013, Tesla now says that it expects to be profitable on a GAAP basis, too.

The fourth quarter of 2012 was a breakthrough time for Tesla. The company moved into volume production, and started producing 400 Model S cars per week. Now Tesla just needs to continue to produce Model S cars at that volume and push up its margin to meet 25 percent so that it can morph into a profitable company on a recurring basis.

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Tesla Motors CEO Elon Musk says that the company has completed building the 1,000th body of its Model S electric cars, according to a tweet (hat tip Green Car Reports). Musk included a photo of the 1,000th car shell surrounded by Tesla employees and said: “V proud of Tesla team for completing 1000th Model S body. More cars made this month than entire rest of year.”

Tesla is currently going through a difficult period where it needs to scale up production of the Model S at a pretty rapid rate. Tesla said about a month ago that it was about four to five weeks behind schedule for its 2012 delivery goals for the Model S. As of September 23, Tesla said it had produced 255 completed Model S cars, delivered 132 of those cars to customers, and estimated it will be able to make 300 Model S cars in the third quarter, and deliver 200 to 225 of those to customers. Tesla also estimated it can eventually get to a weekly production rate of 400 Model S vehicles before the end of 2012, which could lead to between 2,500 to 3,000 cars made in the fourth quarter.

Those new figures are a downgrade from the company’s previous plan to produce and deliver 5,000 of the Model S cars before the end of the year. Because of the slower schedule Tesla had to cut its revenue forecast. Reservations are high for Model S, though, and Tesla says as of September 23 it had 13,000 reservations minus its deliveries.

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Last month Tesla announced that it had kicked off its plan to offer free fast charging (30 minutes) at select locations throughout the U.S. The Superchargers are powered by solar technology, developed by solar installer SolarCity (Tesla CEO Elon Musk also is an investor and the Chairman of SolarCity). The chargers will enable Model S owners to drive from San Francisco to L.A., or the Bay Area to Tahoe, just stopping once to charge for 30 minutes.

Musk has been discussing the idea of a Tesla-bankrolled Supercharger for almost a year and I first heard about the plan back in November 2011. The idea is that because the market for electric cars is so new, Tesla wants (and needs) to help build out the charging infrastructure, which is one of the industry’s biggest barriers.

Here’s the address of the Superchargers, and below a handy map to see if one is near you:

• Folsom, CA: Folsom Premium Outlets: 13000 Folsom Blvd, Folsom, CA 95630 (Near main entrance)
• Gilroy, CA: Gilroy Premium Outlets, near Sony: 681 Leavesley Road, Gilroy, CA 95020 (Near Sony store)
• Tejon Ranch, CA: 5602 Dennis McCarthy Dr., Lebec, CA 93243 (Near Yogurtland)
• Barstow, CA: 2812 Lenwood Rd., Barstow, CA 92311 (Between Chili’s and Country Inn & Suites)
• Harris Ranch, Coalinga, CA: 24505 W Dorris Ave Coalinga, California 93210 (Near Harris Ranch Inn and Restaurant)
• Hawthorne, CA: 3203 Jack Northrop Avenue, Hawthorne, CA 90250

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