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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.
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.
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.