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Fisker puts U.S. workers on temporary leave

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Electric car startup Fisker Automotive has put its U.S. workers on furlough, or temporary unpaid leave, this week according to Reuters. The news follows reports last week in the Wall Street Journal that the Chinese auto tech companies that were bidding on an investment or acquisition of Fisker have now stalled.

There’s conflicting reports about why talks with the Chinese auto companies have grown cold. The WSJ says it’s because Fisker wants to try to get the remaining amount of the loan from the Department of Energy that was frozen, and restarting such a loan would mean Fisker’s next car would have to be built in the U.S. The Chinese companies would probably want to build the car in China where it would be lower cost. PluginCars says that the Chinese giants are less interested after looking under the hood of Fisker and realizing the company doesn’t own a lot of the technology in its vehicles.


Fisker hasn’t made one of its hybrid electric sports cars, the Karma, since the Summer of 2012. The company was plagued by problems in 2012, including the bankruptcy of its battery maker A123 Systems, hundreds of cars lost to superstorm Sandy, software glitches and recalls in the Karma cars that were made, and the loss of part of its loan from the Department of Energy for not meeting milestones with its Karma. The broker that was helping raising money for Fisker, Advanced Equities, also shut down after getting in trouble with the SEC.

Fisker founder and former CEO Henrik Fisker resigned earlier this month. The company has a loan repayment of part of the $192 million that it was able to secure from the DOE next month. Fisker raised over a billion dollars from private investors. It’s Karma car is owned by some well known customers including actor Leonardo DiCaprio, hip hop artist The Game, pop artist Justin Bieber, former Vice President Al Gore, and actor Matt Damon.

5 Responses to “Fisker puts U.S. workers on temporary leave”

  1. Jack Rivkin

    Not sure there is much to buy there. Is there really intellectual property or was this just a vanity design effort? It takes a lot to build a new auto company. I would rather be a supplier to than a producer of.

  2. Doug King

    “There’s conflicting reports about why talks with the Chinese auto companies have grown cold.”

    I wouldn’t say they’re conflicting since the two explanations aren’t mutually exclusive. However, the WSJ/Reuters explanation comes from unnamed sources supposedly familiar with the negotiations. Whereas the PlugInCars unnamed source is supposedly an auto executive from a different Chinese company who is likely speculating.

    Besides his explanation “that the Chenese giants are less interested after … realizing the company doesn’t own a lot of the technology in its vehicles” is a bit implausible. The fact that Fisker doesn’t own much useful drivetrain IP should be common knowledge, and thus something the Chinese would have known.

    • Doug King

      BTW, my guess is these Chinese companies learned a lesson from A123 and will let Fisker go through bankruptcy first and pick up what’s left at an even lower cost, free of liabilities.

  3. Bankruptcy of A123 was a big loss for US battery start ups. With Fisker in deep trouble and Coda automotive following the similar suit, one has to ask if too many eggs were put in one basket. What if some of the auto start ups have focused on less fancy but more commercially viable start-stop or plug-in vehicles.

  4. “It’s Karma car” => “its Karma car”.
    It’s is a contraction for “it is”, and in this case a sentence “It is Karma car is owned by some well known customers” would not make sense.
    Otherwise good one.