Stick a fork in `em, because Fisker’s about as cooked as it can get. As much as it saddens us, we have to admit that the once promising brand is set to be sold or head into bankruptcy. So far, Fisker has two interested parties, per a report from Reuters, that are looking to buy it out.
The most aggressive team is headed up by Bob Lutz’s VL Automotive and China’s Wanxiang Group, as they reportedly put in a bid of $20 million for the spiraling company. $20 million may sound like a big number for a nearly bankrupt company, but it is a far cry from the $2.2 billion valuation given to Fisker in the spring of 2012.
Of course, no one involved in the process is confirming the report of this super-low bid, but folks close to the situation are claiming that it is true and that Fisker is considering the offer.
There is one other team that is interested in purchasing the company outright, but there aren’t any reports of them bidding. However, there are reports that a third investment group is interested in buying out DOE’s $171 million interest in the company, which came as a result of the loan Fisker received in its infancy that was later frozen.
This is all we have for now, but we’ll keep an eye out for more reports as time goes on.
Click past the jump to read more about VL Automotive’s interest in Fisker
It’s no surprise to anyone that Fisker is on life support and is nearing its final breath, as it has had way too many issues over the years. Even with the company likely organizing its affairs for bankruptcy, no one could have ever anticipated seeing a Karma for sale at less than half of the sticker price.
Well, we can now see that the unexpected is a reality, as Karmas are starting to trickle onto Ebay at massive discounts. When we drove the Karma, we found that it drive like a far more expensive car than its $100K price tag and later found that it actually costs more to develop and advertise than Fisker was actually selling the model for.
As of May 17th, we found four Karmas for auction on Ebay with current bids that run from $50,000 to $79,995 with less than 10,000 miles on their odometers. In fact, the $50,000 model only has 550 miles and it is 1 of 100 Signature Editions. Business Insider actually managed to dig one up for $40,200, which adds up to 60 percent off of the MSRP.
From the looks of it, Karma owners are getting spooked by Fisker’s financial trouble and the fact that if the company goes under, there is no large backer to cover warranty and service issues. Unlike when Pontiac and Saturn closed up shop, Fisker doesn’t have GM behind it to provide post-mortem support.
But things are continuing to spiral out of control for the company. Back in 2009, Fisker received a $529 million loan – only $193 million of it was actually given to Fisker – and the lack of sales mixed with abundance of troubles with the Karma have drained the company’s coffers, making the possibility of it paying that loan very slim. In fact, it was found that for each Karma sold, the company lost a total of $560k.
Today, the U.S. House Oversight and Government Reform committee are meeting to examine that huge loan received by Fisker, and Henrik Fisker will be there to testify for the failing company. That is not the real news here, as what’s really odd is that Fisker has taken its commercial and press sites off line in anticipation of the hearing. We are wondering what the site has to do with the hearings, but this is definitely not a positive sign. So, stay tuned for more details.
When we went out for a test drive in the Fisker Karma last year, we thought that it felt a little more high-tech than the $100,000 price tag led us to believe. Everything operated smoothly, the interior was plush, the performance was admirable and its look was downright stunning. With all of this technology and design comes a hefty price, and boy did Fisker feel its belt tightening with each and every Karma it produced.
With its bankruptcy proceedings pretty mu inevitable, PrivCo dug up all the public record s it could to have a look at Fisker’s financial goings on, and it found that the each Karma produced cost a total of $660,000 but sold for only about $100k – that’s just bad business, folks. Now, we’re not saying that each car it built literally cost $660k, what this means is that when you take all of the research and development cost, advertising costs and the other costs associated with the car and divided it by the number of Karma’s sold, you get roughly $660k.
At that rate, there was no way Fisker could have survived anyways, but the fact that it was the victim of management that would likely make Lotus’ former management look good just accelerated things. In fact, PrivCo has released a detailed review of Fisker $1.3 billion debacle, which really opens our eyes to just how promising the model was and outlines exactly where things completely fell apart. You can see this study here.
The fortunate thing is that Fisker’s advanced EVer system will likely be bought out during the bankruptcy process, so even though we will not see another Karma on the road, it may live on in spirit through future models using this awesome drive system.
Okay, we’ve held off on publishing this news for the majority of the day, as we awaited some form of confirmation from our contact at Fisker, but that confirmation didn’t come before a source reported it to Bloomberg.
Well, if you haven’t heard already, Fisker has laid off nearly 75 percent of its workforce, including its PR and communications team. This leaves only a skeleton crew of roughly 50 employees left over, most of whom are likely assemblers and upper-level executives.
This report comes on the heels of rumors that Fisker had secured attorneys to start the bankruptcy process. We cannot say that this shocks us at all, given the downward spiral that the EV builder has been in for the last year, or so. However, the fact that it all happened so quickly really makes us wonder if the company was in a lot worse shape than we were informed of when we gave Fisker the opportunity to clear the air and reintroduce themselves to prospective buyers.
Fisker is in some serious trouble, as disagreements between management and its founder resulted in Henrik Fisker to step down from his position. Fiskers only real hope at this point is to find a buyer or a strategic partner to help alleviate its financial issues. For a long time, Geely – Volvo’s owner – would end up being the high bidder, mostly due to their interest in Fisker’s Delaware assembly plant. According to a report from Reuters, Geely has pulled out of the bidding process because of the DOE loan conditions.
This leaves only one bidder in the running for Fisker and that bidder is China-owned Dongfeng Motor Group Co. It is unclear at this time whether Fisker will automatically accept Dongfeng’s offer, but at this point, that look like the only real option. Depending on the terms of a potential deal, this could result in Fisker becoming partially owned by China – creepy…
Regardless of how things pan out, we really want to see Fisker survive all of this. We’ll continue to keep you updated.
Fisker’s been in serious issues for some time now and despite having a wonderful overall product, it continues to spiral further into a black hole. The EV builder has already hired an outside consultant to handle its affairs and try to find money under any rock that has yet been overturned and now the latest news really starts the door-closing procedure for the once promising company.
This latest announcement, which comes courtesy of Automotive News is that Fisker’s chairman, founder and namesake, Henrik Fisker, has resigned amid what Fisker reps are labeling “major disagreements” with its executive management on business strategy. In layman’s terms: he didn’t agree with the direction the consultant and other levels of management were planning to take the automaker.
With the resignation of this visionary, we can only see two remaining directions for Fisker: complete closure and fire sale or sale of the entire company to a foreign body, like Geely. No investors are likely to take on the risk of a company that has lost its chairman in combination with all of the other recent issues.
Unfortunately, we aren’t too sure which end result we will see, but with each passing day and gloomy announcement, the former seems the frontrunner.
Following the damaged caused to a slew of Fisker Karmas by Hurricane Sandy, Fisker’s insurer denied the claim and the EV builder almost immediately filed a $33 million lawsuit against the insurer. According to a report, the two companies have settled the lawsuit and all legal action was dropped.
There is no mention of who started the settlement process, but this does seem like strange timing. See, only weeks ago Fisker hired a consultant to help the struggling manufacturer save a little money and to search for a potential partner or buyer. It’s common knowledge that a pending legal battle makes it much harder to talk a potential partner into joining forces and even tougher to find a buyer.
This leads us to believe that Fisker may have a partner or buyer that is interested, but wanted the legal battle settled before moving forward. This is all multiplied by the recent report from Reuters that Geeley, the Chinese automaker and owner of Volvo, was more than just a little interested in purchasing majority stake in Fisker.
All of this is coming together all too well for us to ignore the possibility of Fisker selling sooner rather than later.
We’ll keep an eye on this situation and update you.
Oh boy, Fisker has been run through the ringer in the past year, or so, but Henrik Fisker remains optimistic that everything’s going to be all right. During the Chicago Auto Show, Mr. Fisker was heard saying that he anticipates the Karma’s production to restart “fairly soon” after its recent halt.
To recap the recent struggles: Fisker first had tons of cars destroyed by Hurricane Sandy; their insurance company denied the claim for said damaged vehicles; A123 – their battery supplier – went belly up; and the aforementioned temporary cessation of the Karma’s production. We’re not even going to get into the fire issues that marred the company’s image for a period of time.
With the approval of the sale of A123 to Wanxiang Group – a Chinese firm – one step in the restart process for the Karma is nearly complete. Fisker is still relying on an outside consultant to straighten out its business practices to save it a little cash and for an investor or strategic partner to bring in a little extra operating capital.
We are thoroughly convinced that the Karma is a quality luxury sedan, despite its earlier issues, so we are hoping that its production will restart without a hitch and that it will ultimately succeed. We’ll continue following the Karma saga and update you as more details emerge.
When we reviewed the Fisker Karma back in November 2012, we were pretty sure that this was a model with a promising future in the U.S. market. Apparently, we were wrong. It looks like Fisker hasn’t produced any vehicles in more than six months, and the problems do not stop here.
Apparently the company is still having big problems with cash, which really took off when the U.S. Department of Energy decided to freeze about $300 million of the $529 million loan Fisker was supposed to receive. Our contact at Fisker confirmed through several news outlets that the electric vehicle manufacturer has hired a consultant to oversee day-to-day operations in an attempt to conserve cash. The other detail to emerge is that sources close to the company are reporting that Fisker is seeking bidders to enter a partnership with or a possible acquisition.
Fisker officials confirmed that the company already attracted interest from companies like the Swedish vendor Valmet and a few others companies in China that may be interested in either being strategic partners or in the technology developed by Fisker. However, problems for Fisker do not stop here: recently battery supplier A123 Systems Inc. filed for bankruptcy and Fisker remains without the most important part of Karma model. Wanxiang – the likely buyer of A123’s assets – has interest in providing Fisker the batteries it so badly needs, so that part may work itself out.
We’re just hoping they will find a solution pretty soon; it will be a shame not to see them on the market in the future!
If you remember the Bobs from Office Space, then you know what it means when a company hires an outside consultant.