Updated: Could the Solyndra of the automotive world be just around the corner (see my prediction story on Fisker from September 2011 on this)? Electric vehicle maker Fisker Automotive announced on Monday that it has halted work on its second electric car called Project Nina at its factory in Delaware, has laid off 26 workers, and is attempting to renegotiate the terms of its loan with the U.S. government.
In late 2009 Fisker was awarded a $528.7 million loan from the Department of Energy that it planned to use to both build its first plug-in car, the Fisker Karma, and start working on its second car to be “Made in the U.S.A” called Project Nina. The company recently launched the Karma — which is manufactured in Finland and assembled in the U.S. — but that car was significantly delayed to market.
Fisker tells me it has drawn down on $193 million of the $529 million loan mostly for the Karma program, and that it received its last reimbursement in May of 2011. Fisker says it is currently “renegotiating some terms of the DOE agreement for the $336 million balance of the loan related to the Project Nina program,” but that it “continues to pursue alternative funding sources.”
If you recall, solar maker Solyndra had the terms of its loan guarantee renegotiated by the DOE, which caused much political backlash after Solyndra went bankrupt. So you can be sure that the DOE will be particularly cautious in how (and if) it works with Fisker on the remainder of its loan.
As I reported last month, following some of its hurdles, Fisker quietly decided to double its current Series D fund-raising round from $150 million to $300 million, and the company has now raised $850 million in private equity. Fisker’s investors include Valley venture firms Kleiner Perkins Caufield & Byers and NEA and private equity firm Advanced Equities.
Fisker says with Project Nina, it has “completed Phase One of the re-commissioning of a former General Motors plant in Wilmington, Delaware,” and will first focus on selling the Karma in 2012, and then later on focus on the Nina. Fisker was originally shooting to manufacture Project Nina electric cars at a volume of 75,000 to 100,000 per year starting in 2012.
Update: A DOE spokesperson says: “Our loan guarantees have strict conditions in place to protect taxpayers. The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results. As has been widely reported, Fisker has experienced some delays in its sales and production schedule — which is common for start-ups. As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the Department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America.”