The Obama administration has just announced that the Department of Energy and Fisker Automotive have closed a $528.7 million loan agreement that will be used to help the startup launch its luxury plug-in hybrid model, the Fisker Karma, and set up manufacturing in Delaware for a line of lower-cost plug-in hybrids. Today’s announcement, which comes seven months after Fisker first won a conditional commitment for the low-interest government loan, marks the fourth agreement to reach this stage under the DOE’s highly competitive Advanced Technology Vehicles Manufacturing, or ATVM program.
Between June and October of last year, the DOE announced conditional loan agreements with Tesla Motors, Nissan, Ford, Fisker and parts maker Tenneco under the $25 billion program. No awards have been announced in the months since the program got a new director, a former venture capitalist brought on partly to help streamline the operations. Tesla, Ford, Nissan and now Fisker’s loan agreements have been finalized.
As we’ve written before, startups like Fisker face a long road to bring green cars to market in large numbers after winning a nod from the DOE. Among other milestones, companies have to line up manufacturing plans and U.S. suppliers, and meet the DOE’s equity requirements. The ATVM loans can cover only 80 percent of the project costs — which means startups have to come up with hefty capital before tapping the government cash.
For Tesla, it took at least seven months between the time of the initial loan announcement (late June 2009) and the first funds actually rolling out the door (February 2010). For Fisker, finalizing the loan and accessing funds has taken longer than Fisker and one of its chief backers and suppliers expected.