Fisker Karma EVer

Image

Henrik Fisker’s goal was to build a beautiful “green” car that could compete with exclusive European brands like Maserati and Aston Martin. His vision was to design and develop the world’s first line of premium plug-in electric hybrid vehicles, currently, only the Karma exists. Planned expansion included two additional models; the Fisker Sunset a luxury convertible and the Fisker Surf which is a shooting brake. Unfortunately, Fisker’s dream came to a screeching halt. Design and production issues, vehicle recalls, and cash flow problems plagued this new entity. Production ceased and now the company faces default with a Department of Energy green loan in the amount of $192 million dollars.Image

Henrik Fisker was previously Design Director for Aston Martin. He was also President and CEO for BMW’s Design Works USA. His brilliant work includes the BMW Z8, Aston Martin DB9 and the Aston Martin V8 Vantage. His illustrious past combined with the idea for this new luxury hybrid created a flood of investors wanting to get in on this ground floor opportunity.Image

The Company logo represents the Fisker brand being an American company. The orange and blue represent the California sunset over the Pacific Ocean. The vertical bars represent the designer’s pen (Henrik Fisker) and the creator’s tools (Bernard Koehler).

The Fisker Karma EVer was introduced at the 2008 North American International Auto Show in Detroit, Michigan. Fisker Automotive based in Anaheim, California was founded in September 2007 by Henrik Fisker. Pre-orders for the Karma in the US and Europe began in 2008. By 2009, Henrik Fisker had 1,300 orders for the car. In October 2011, the first Karma produced was auctioned in the UK to benefit Pratham UK for $220,000.Image

Image

Fisker Automotive & Valmet Automotive partnered to build the Karma in Uusikaupunki, Finland. The Valmet factory built the Porsche Boxster and Cayman models (until 2012) and also previously produced various Saab models. Fisker faced numerous issues from the start, production was rescheduled to launch September 2010 and missed its target to build 70 to 100 test cars. The actual production began officially July 2011. The Valmet plant began production of the Karma completing five units per week. By December 2011 production was up to 25 units per day. The first vehicles were sold for $95,900 for the base model and $109,850 for the top model. In December of 2011 the prices increased to $102,000 for the base and $116,000 for the top of the line model.Image

The Fisker Karma EVer (Electric Vehicle with extended range) Powertrain consists of a GM 2.0 litre in-line 4 cylinder 16 valve gasoline powered generator engine that produces 260 hp, an electric generator (AC magnet synchronous type producing 235 hp), a Lithium-ion battery pack, and twin AC  electric motors at the rear wheels delivering 402 hp of thrust. The Karma has two modes of operation; in “Stealth” mode it operates totally by the electric motor. “Sport” mode accesses the vehicle’s full power that combines both electric and gasoline motors for more aggressive performance and a higher top speed. It sprints from 0-60 in 5.9 seconds with a top speed of 125 mph. When operating in “Stealth” mode all electric operation provides up to 50 miles in range. The gasoline engine kicks in automatically when the battery is depleted to provide an additional 200 miles. An interesting case in point is the fact that the gasoline engine never directly drives the rear wheels.

The body sits on an aluminum space frame riveted together with 260 feet of welds with aluminum suspension components. Brembo brakes with 22 inch cast aluminum wheels are standard. The beautiful aluminum body has a composite deck lid with plastic bumpers. Image

The plot thickens. In addition to the limited cruising range of 50 miles from the electric motor, charging the battery pack is equally entertaining. A fully depleted battery pack requires six hours using a 220V/40A outlet which is standard in Europe and widely available in the US. However, the standard US household 110V outlet requires 14 hours! (OMG! Could you imagine your electric bill coming in two envelopes?) Fourteen hours just to drive up to 50 miles? The battery pack is located in the tunnel down the center of the vehicle which is the major part of the Karma’s structural integrity and with the placement of the battery pack, creates a near 50/50 weight distribution and a lower center of gravity.Image

With a new species such as this, one wonders about the maintenance costs right? Per Fisker: “We anticipate power train maintenance to be lower since the electric motors are simple and reliable. There will be a very little load on the gasoline engine. There is also no transmission.”Image

The Fisker Karma EVer does have some unique features. In its roof is an integrated solar panel. It is the world’s largest curved automotive solar panel. The roof produces energy to power the interior cooling system.

1800 Karmas were delivered to North America and Europe through December 2012. 200 Were delivered in 2011 and 1,600 in 2012. 247 Units were sold in Europe through December 2012. 166 Karmas were sold in the Netherlands through May 2013. 53 Were sold in Switzerland through May 2013.Image

December 2011, Fisker recalled the first 239 Karmas built from July through November 2011 delivered to the USA due to risk of fire caused by an improperly positioned radiator hose clamp. If coolant entered the battery compartment an electrical short could possibly start a fire. Of the 239 cars, less than 50 had been delivered and the balance was in dealer inventories. No fires had been involved in any of the units. The vehicles either had new battery packs installed or the replacement of the hose clamp assembly. On August 18, 2012 Fisker recalled about 2,400 Karmas to repair a faulty cooling fan unit. Production was suspended in November 2012 due to financial difficulties. 2,450 Karmas had been built by then.Image

Then came Hurricane Sandy, October 2012 and wreaked havoc with the already struggling auto maker when 16 Karmas caught fire and another 330 units were lost when a shipment from Europe was parked at the Port Newark Elizabeth Marine Terminal. This issue alone cost Fisker in excess of $30 million dollars.Image

The most embarrassing of Fisker’s problems came when Consumer Reports purchased a Karma for $107,850 to test drive. The Karma barely had 200 miles on the odometer and was taken out to the test track at Consumer Report’s 327 acre facility in Connecticut. The Karma stalled and could not be restarted while a routine speedometer calibration check was being performed.

Now this is PRIOR to the actual road testing. Consumer Reports purchase 80 test cars per year and never had one of them rendered undrivable BEFORE it finished their check-in procedure. The fault was linked to a misaligned weld in the battery pack caused by a malfunctioning robotic machine. The problem affected four other customers. Total cost for battery replacements was around $55 million dollars.Image

Per NBC News May 14, 2013, “Used Karmas which sold for $103,000 just one year ago as new models is now being sold for roughly half the price! In some instances the seller couldn’t get $50,000. There were MANY on eBay that either didn’t sell or sold for less than $45,000. Used Karmas are going for 50 cents on the dollar! A company that once touted as an example of how to start-up auto makers and were changing the auto industry now owes the federal government $192 million and is no longer building new models.

The Department of Energy had originally finalized the loan to the auto maker for $528.7 million dollars, but stopped the funding when Fisker missed milestones and deadlines in production along with design flaws combined with the recalls. Despite numerous problems and the fact that used Karmas are sold WITHOUT warranties, some still want this car.”

It is unclear how much longer the used Fisker market will offer so many cars. The Karma will always have unique appeal. Then there is the question of whether Fisker Automotive will survive. After laying off a sizable portion of its workers in April 2013, the company will need a major capital infusion to stay afloat. A crisis management firm is now representing Fisker Automotive……we all know what this means.Image

According the Reuters and their article dated June 17, 2013 titled “Bad Karma; how Fisker Automotive burned through $1.4 billion dollars on a green car”, here are excerpts: “The Dane’s start-up, Fisker Automotive hasn’t built a car in nearly a year. It fired most of its workforce, hired bankruptcy advisers and is seeking a buyer. Co-founder Henrik Fisker resigned after a dispute with some of the directors. And, despite raising $1.4 billion dollars in private and public funding since 2007……the company is out of cash. For months, key investors have been footing the car maker’s day to day expenses to keep it alive in diminished form.”Image

Reuters went on with: “An examination of the company’s rise and fall reveals Fisker’s finances started to unravel as early as June 2011 when the US Department of Energy cut off access to taxpayer funded loans…..a fact that was concealed by Fisker for nine months. Different stories were heard from the time the Energy Department suspended the loan in June 2011. Fisker faced a series of cash crisis telling the Energy Department that it was nearly broke in October and December of 2011, and again in August 2012. But the investors heard a different spin…..Fisker pegged its value at nearly $2 billion dollars and envisioned sales of more than $12 billion dollars within five years.”Image

 “Fisker told the government November 1, 2011 it would run out of cash in three days without additional loan funding or of private equity. On November 30, 2011 a modest investment increase of $37 million dollars at mid-month had nudged its cash pile to a still thin $20 million. Then, just weeks later on a December 14th letter to shareholders, Fisker told investors that the company had a capitalization approaching $2 billion dollars, that included $720 million in private equity (almost all of which had been previously spent).

Henrik Fisker and co-founder Koehler were pulling down some handsome salaries. They each got $600,000 to $700,000 a year according to several sources familiar with Fisker’s executive compensation. They were still collecting these salaries even after the company began laying off employees in late 2011 and early 2012.”Image

 “Fisker had raised $600 million before it ever sold a car. Despite the influx of cash, Fisker never turned a profit. From 2008 until 2012, the auto maker LOST an estimated $1 billion dollars. Fisker had built 2,450 Karmas from 2011 through 2012 but LOST at least $35,000 on each car according to internal financial statements and interviews with former Fisker executives. One former exec said that ‘The Karma cost far more to produce than we could ever charge.’ Maurice Gunderson, a managing partner at Runaway Capital Partners declined the opportunity to invest stating beneath the world-class skin was a rudimentary machine that needed several years of engineering refinement and testing before it could be ready to release.”Image

Gross mismanagement, production design flaws, and production delays…not to mention the deception presented to investors has brought the Fisker Karma dream to an end. It is like a modern day version of what happened to John Q. DeLorean and the DeLorean fiasco. They both were visionaries but their activities were poorly orchestrated. As for the $192 million dollar Department of Energy loan default by Fisker, right smack in the middle of present government woes is another hit for the American economy to suffer.Image

This advice goes out to the owners and potential owners of the Fisker Karma, start stock piling parts especially the exclusive made for Karma parts before they are depleted. DeLorean owners today are having problems finding parts, especially oil filters. Just think, when all parts are gone, if no one recreates them, you will have an expensive garage ornament, a piece of history that you could very well have lived without……….but it’s pretty. Maybe someone will find a way to convert them to either a GM or Ford drive train.

There are two things that my mind cannot accept. First, if this was an “American” company, why was production farmed out to Finland? And last, why would anyone want to go to all of that expense for an electric hybrid that only drives up to 50 miles on an electrical charge requiring 14 hours (110V), or the six hour charge (220V/40A)? Makes no sense to me…correct me if I am remiss at something here……The total cruising range of 250 miles seems dinky as well.  My brain crashed, I had to re-boot after writing this story!Image

I am dedicating this article to a good friend, Gerlinda Patton who dropped several SUBTLE hints for me to write about her favorite car. Here it is Gerlinda; I am sorry too, that the story has such a tragic ending; I know how you love this car. Cherish the memories, who knows, maybe the price will get ridiculously lower and one will find its place in your driveway….then don’t drive it, just polish it and look at it!Image

7 Responses to “Fisker Karma EVer”

  1. Greetings! Very useful advice within this post!

    It’s the little changes which will make the largest changes.
    Thanks a lot for sharing!

  2. You cause it to look quite simple with all your display however locate this kind of topic for being definitely something I do believe I’d personally in no way have an understanding of. Seems like very sophisticated and very broad personally. My business is having a look ahead in your next offered, I’ll try and purchase the hang on of it!

  3. Am new to blogging. So would like to know more about blogs..

  4. I love your blog.. very nice colors & theme. Did you make this website yourself or did you hire
    someone to do it for you? Plz respond as I’m looking to design my own blog and would like to find out where u got this from.
    thanks

  5. I know this if off topic but I’m looking into starting my
    own blog and was curious what all is needed to get set up?
    I’m assuming having a blog like yours would cost a pretty penny?

    I’m not very web smart so I’m not 100% positive. Any
    suggestions or advice would be greatly appreciated. Appreciate it

  6. Stromer Electric Bikes

    Fisker Karma EVer | NotoriousLuxury

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: