Fisker Karma

[ipdamages]

I agree Dollars are Fungible, but all it takes is a pissed of Senator, a Senator trying to make a name for him/herself, or a senator with another agenda (personal vindetta etc) to propose a forensic audit and that could spell a world of trouble. I'm not saying it is going to happen, but it's a distinct possibility that shouldn't be ignored.

Look at it this way. The US is doing furloughs because of the sequester, what senator wouldn't look like a champion for taking down someone/company that "stole" tax payer money? That jumps right out at me as an agenda for a senator to have.

I'm a forensic accountant, and having done a substantial number of investigations, I expect that a lot of the spending can be interpreted to improve technology that would eventually be used in the Atlantic. Henrik is a smart guy, as he has repeatedly shown to investors and others who have listened to his pitch. I attended one of his presentations when he was raising money soon after the DOE loan and he and the Fisker team were very aware of the limits to the DOE loan, which is why they sought money from investors to get the Karma released. That was still close to a year before the car was actually released. So they knew, and I would be surprised if there was a trail to show that meaningful amounts of money were improperly spent.

As to Doug's comment about Henrik's and Fisker's motivations: "I think the 'green' angle was only used to pull in investors. What Fisker really wanted to do was design his "ideal" car without any constraints, e.g. little things like engineering." That is a stretch. Fisker was always about no compromises with green and style and performance. Unfortunately, they ended up compromising on green and performance, and a bit on style (e.g., large center channel, large chassis). But as others have written, when having to compromise, Henrik generally resisted the style compromises the most and was willing to sacrific elsewhere first.

If Fisker had really only cared about style (and performance) he would have jettisoned the Karma and made the Destino early on. He was a dreamer, and the sobering reality was that the dream wasn't attainable. But the dream was as he regularly espoused - no compromises. Don't have to be dorky to be green. Built to make you get hot, not the planet.

All the way to the end, that was the pitch. And "if we can just get to the Atlantic, then we'll be good." That was the pitch I got when they were looking for my money. But when I saw the pro formas and asked a few questions I knew it was a bust.

 

[brianman]

I also don't agree that the Chevy Volt was a bad idea.

I don't think that's what he said, Doug. I think he was critiquing the Fisker investment not the Volt one. At least my interpretation of what he wrote.

Unfortunately the Fisker Karma was not well executed, and really wasn't compelling. If someone offered me a choice of a free Fisker Karma or a free Chevy Volt, I'd take the Volt. Or I'd take the Fisker, sell it, buy two Volts, and give one to my Mom.

... and I think you're agreeing with him here.

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I think the "green" angle was only used to pull in investors. What Fisker really wanted to do was design his "ideal" car without any constraints, e.g. little things like engineering.

When investors include (for some of us) unwilling taxpayers, that's where the politics come into play.

 

[Matthew049]

I don't think that's what he said, Doug. I think he was critiquing the Fisker investment not the Volt one. At least my interpretation of what he wrote.

... and I think you're agreeing with him here.

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When investors include (for some of us) unwilling taxpayers, that's where the politics come into play.

exactly. thank you.

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I'm pretty sure by "fancy Chevy Volt" he was referring to the Karma.

I tend to think Fisker would've been better off without the loan program.

yes to both, thank you.

 

[Zythryn]

Another article, this time from Scientific American.
Three Thoughts on the Fisker Debacle | Observations, Scientific American Blog Network

 

[Doug_G]

Another article, this time from Scientific American.
Three Thoughts on the Fisker Debacle | Observations, Scientific American Blog Network

Nicely done. Really hits it on the head.

 

[Tharo]

Fisker Automotive's Website Vanishes…Dreaded 404 Error Pops Up…Is This the End?

Fisker AutomotiveIs This the End?)

 

[doug]

I think this is wrong information. According to the DOE agreement with Fisker located here:

http://www.lgprogram.energy.gov/wp-content/uploads/2010/09/FiskerConditionalCom.pdf

Section 9 Shows that the Maximum Karma Loan amount is $169,300,000.

That's just for the Karma. Fisker had another ~$360M loan for Project Nina, later named the Atlantic. They only managed to draw ~$20M of that before the DOE cut them off.

 

[jeff_adams]

I think there is one powerful way that Tesla can use the Fisker situation to it's advantage. If I were Elon and company, I would be researching all the stories of dealerships that have screwed over Fisker owners. I've heard plenty of stories about people bringing their cars in for "warranty" work and the dealers not honoring them. There is no "consumer protection" in how they are treating Fisker customers. If dealerships had really "helped" Fisker, they would have sold more cars and stood behind the product.

Use this argument in the states that are battling the Tesla stores. Dealerships protect their own interests, not the consumers.....

 

[AnOutsider]

I think there is one powerful way that Tesla can use the Fisker situation to it's advantage. If I were Elon and company, I would be researching all the stories of dealerships that have screwed over Fisker owners. I've heard plenty of stories about people bringing their cars in for "warranty" work and the dealers not honoring them. There is no "consumer protection" in how they are treating Fisker customers. If dealerships had really "helped" Fisker, they would have sold more cars and stood behind the product.

Use this argument in the states that are battling the Tesla stores. Dealerships protect their own interests, not the consumers.....

Actually, aren't those examples of Fisker screwing the dealers? As I understand it from postings on FB, the dealers aren't being paid by Fisker to perform warranty work. Fisker has clammed up, and some of the dealers who are continuing to provide work are charging for it. If Fisker owned all their service centers and closed up, the customer would be screwed.

 

[doug]

Well in 20 minutes you can watch the hearings live here: Committee On Oversight Government Reform

You can go head and read written testimony of the witnesses now:

• Mr. Nicholas Whitcombe (testimony) Supervisory Senior Investment Officer, Loan Programs Office, U.S. Department of Energy
  
• Mr. Henrik Fisker (testimony) Former Executive Chairman & Founder, Fisker Automotive
  
• Mr. Bernhard Koehler (testimony) Chief Operating Officer, Fisker Automotive
  
• Mr. Nicolas Loris (testimony) Herbert and Joyce Morgan Fellow, The Heritage Foundation
  
• Ms. Zoe Lipman (testimony) Former Senior Manager for New Energy Solutions, Climate and Energy Program, National Advocacy Center, National Wildlife Federation

Interestingly, current CEO Tony Posawatz is no longer on the witness list.

 

[vfx]

Another article, this time from Scientific American.
Three Thoughts on the Fisker Debacle | Observations, Scientific American Blog Network

Harsh. After reading this, for the first time I thought, Fisker=Edsel.

 

[dsm363]

Harsh. After reading this, for the first time I thought, Fisker=Edsel.

Billy Joel said it best

Buddy Holly, "Ben Hur", space monkey, Mafia,
Hula hoops, Castro, Edsel is a no-go,
U-2, Syngman Rhee, payola and Kennedy,
Chubby Checker, "Psycho", Belgians in the Congo,
We didn't start the fire


It's a shame all of this negative press will rub off on Tesla at least in the general public's mind.

 

[doug]

Anyone else watching these hearings? This Mr. Whitcombe guy the DOE sent is such a lightweight. You'd think they would have sent someone better.

 

[jeff_adams]

This could have been Musk and Tesla. It was pretty dire for a while. Saw "Revenge of the Electric Car" last night.

 

[dsm363]

It could well have been Tesla. Tesla had a much more compelling and practical product in the Model S which helps.

 

[Nin ja]

Anyone else watching these hearings? This Mr. Whitcombe guy the DOE sent is such a lightweight. You'd think they would have sent someone better.

When the circus has trouble, then send in the clowns -- Tony P must be connected, he was spared.

 

[doug]

Well at least my youtube clip of Ray Lane in his Karma got a shoutout when this Washington Post article was read into the record:
4 Pinocchios for an unproven Romney claim of 'crony capitalism' - Washington Post

There were a few interesting points that were lost in all the political noise and feigned anger.

• It appears Fisker's initial application for a loan just for the Karma was rejected. They were only able to get a loan for the Karma if they got one for the Atlantic as well.
  
• Barney Koehler wrote an email to the DOE saying needed the loan approved ASAP to stay in business and to keep up with competitors (i.e. Tesla).
  
• The majority of private investment that Fisker got came after the announcement of their being granted a DOE loan.
  
• After the loan was frozen, the DOE made no public announcement and Fisker continued to raise private funds while investors assumed Fisker was still getting DOE loan disbursements.

 

[doug]

U.S. government, Fisker grilled over loans to green carmaker - Reuters

 

[doug]

So far it doesn't look like the entire hearing is available to watch online. There are only some clips on the Oversight and Reform YouTube channel, but those are selected to fit Jordan and Issa's agenda.

This vid was played in the committee chamber at the opening of the hearing:

A few other clips:

Harsh. After reading this, for the first time I thought, Fisker=Edsel.

In the following clip, Issa tells Fisker that his place in history is secure; keeping company with Tucker, Bricklin, and Delorean.

 

[doug]

What Fisker's failure tells us about Obama's clean-energy programs - Washington Post

Fisker’s real legacy may be the damage it has done to federal support for other electric vehicles. The Energy Department still has $16.6 billion available for green car funding under its Loan Guarantee Program and its Advanced Technology Vehicles Manufacturing program.

But those resources have basically been frozen. As a recent report from the Government Accountability Office found, the Energy Department hasn’t ”closed on a loan or loan guarantee or conditionally committed to do so under either program since September 2011.” The reasons? Applicants are skittish about going through a “lengthy and burdensome” application process and facing the same pressures that faced companies like Solyndra and Fisker.

In other words, even if Fisker is an outlier, it’s casting a long-shadow over electric-car policy.