A123 has been put through the ringer in recent history, most notably with its massive battery recall, and now it is just about belly up. Things were starting to look up for the battery make when it announced that a $450 million deal had been reached with Wanxiang Group Corp, but that deal recently fell through.
Now the inevitable is upon A123, as news came across the board that A123 had filed for bankruptcy protection, despite having received a $249 million government grant. With this bankruptcy filing also comes the likely liquidation of its assets. It appears as if A123 has already gotten a head start on this liquidation by negotiating to sell off its automotive business to Johnson Controls – well-known for building nearly every lead-acid and gel battery sold.
The deal is not yet done, but it is reportedly for the sum of $125 million and will include the Fisker, GM, and BMW contracts that A123 has already inked. Part of the proposed deal includes Johnson Controls fronting A123 $72.5 million in “debtor possession” funds to keep the bankrupt company running while the sale is being completed. There is no timetable for the completion of the deal, but per the press release, things will continue as usual for A123 during the entire sale process.
All we can hope for is a full turnaround once this technology gets in the hands of Johnson Controls, as the fate of the EV realm rests heavily on the technologies developed by A123. This could possibly be part of the reason that Fisker wasn’t shy about announcing that the upcoming Atlantic was delayed. We’ll also keep an eye on the Chevy Spark EV project to see if that is put on hold until this situation is resolved.
We’ll keep you updated.
Click past the jump to read A123’s press release.
So, for anyone that watched the Debate last night – I did and I am suffering today thanks to the late evening – you saw presidential hopeful, Mitt Romney, hit our sector a few times. One time, he took a direct swipe at two alternative-energy car companies in one statement. If you missed the statement, here it is:
"Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives," Romney said during the first of three Presidential debates. "You put $90 billion — like 50 years’ worth of breaks — into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said, you don’t just pick the winners and losers; you pick the losers."
Now, we’re not here to debate politics, but to call Tesla and Fisker “losers” is not quite fair. As a matter of fact, Tesla announced on Wednesday – the same day that Romney labeled it a “Loser” – that despite its struggles meeting delivery goals, which are due to supplier issues, it will become “cash-flow positive” by next month and will hit the 500-unit mark in just a few weeks.
Hitting that black in the ledger is a huge step for an upstart company and to see Tesla hitting it this soon is impressive. Musk also announced that despite criticisms of the DOE loan to Tesla, the company has always paid the loan installments on time and has never even given a thought to postponing the payments.
We are not too sure exactly what will come of Tesla in the long run, but it is already prepping the release of its second vehicle, the Model X SUV, and there is a light at the end of the very long upstart tunnel for Musk and Tesla. We’ll keep an eye on the ledger sheet and let you know if Tesla meets this anticipated milestone on time or not.
Click past the jump to read Mr. Musk’s blogged press release.
A life lesson that most auto buffs learned from their parents is never buy a first-release vehicle, especially if it is bearing new technology. It is bound to have tons of bugs that will drive you insane. Well, when you dump $100K on a new car, you kind of expect it to be about as bug-free as possible. In the last year, we have seen two new cars come out bearing very new technologies, the Fisker Karma and Tesla Model S.
The Model S has moved along relatively unscathed with only minor complaints here and there. The Karma, on the other hand, has had a slew of issues and complaints. Oh, and this nasty little habit of spontaneously combusting when it’s parked.
Some of these bugs are being addressed in a very lukewarm sort of way, via a Fisker-created document called the “Customer Town Hall FAQ.” Some of the highlights include Fisker admitting that its navigation system pretty much stinks and they will “investigate ways to improve system performance” and Fisker realizing that they forgot to include a mute feature for the oft-error-filled navigation system. So, not only do you have a navi system that’s incorrect, but one that constantly blurts out “Left turn ahead” in the wrong places without the ability to mute it... Hmmm.
An odd one is a complaint that the engine still comes on when the car is in “Stealth” mode — a mode where it’s supposed to be noiseless. Fisker answered this by basically saying “the engine needs lubed,” “the emissions system runs with the fuel door open,” and “the high-voltage battery may ask for a charge when it really doesn’t need one.”
The biggest FAQ is when asked about software upgrades becoming free, Fisker simply says only warranty items will be free; anything that improves the functionality of existing will always carry a fee. Nearly every other car manufacturer performs these types of upgrades free of charge, what makes Fisker think they don’t need to? If GM will update my sister’s 160,000-mile Saturn’s computer for free (done a few weeks ago), why won’t Fisker update its year-old Karma’s unsatisfactory systems?
We guess Fisker needs a few more investors before they can afford that.
Click past the jump to read the entire “Customer Town Hall FAQ.”
Fisker has been one of the more exciting rollercoaster rides in the automotive industry, as of late. In 2010, it was developing an extended range hybrid, then known as the Nina, and the Department of Energy was interested enough to provide the struggling company with a $529 million loan. This loan was three fold; part of it was for additional research for the Karma, part was for the Nina’s development, and the final portion was to renovate the old GM plant in Delaware.
Apparently Fisker didn’t meet the DOE’s expectations and they froze the loan in 2011, due to “unmet milestones.” Fisker then insisted that production of the Atlantic (the production name of the Nina) will commence at the Delaware plant, despite laying off 26 employees in early-February.
Well, the layoffs are still coming, as Fisker just let go of an additional 12 employees, including engineers and maintenance technicians, from its Delaware plant, which one laid off engineer called “absolutely empty.”
This is really making it look as if the Atlantic will not be produced in the Delaware plant. For that matter, it is starting to look like the Fisker brand as a whole may be in some significant trouble. The true question here is will the DOE see that Fisker’s recent progress is good enough to thaw out those loan funds and allow the company to continue its renovation of the Delaware plant and research on the Atlantic project? Or will the DOE watch Fisker squirm as it gasps for air wherever it can?
Chances are releasing the loan funds will never happen and it is looking like Fisker may fizzle out and end up amongst the heap of failed car companies, alongside Packard, Oldsmobile, and Pontiac. Only time will tell, but seeing the Atlantic – an affordable hybrid sports sedan – hit the market would be a great thing for the environment and the entire hybrid realm.
The electric vehicle builder Fisker already has the lithium-ion powered Karma sedan and soon to be Karma Sunset convertible. But for 2010 the Tesla Motors competitor would like to offer something different, a more compact plug-in vehicle.
"We’re first doing the four-door and then we’re doing the convertible and then we’re planning some third derivative off the Karma platform. Then we’re planning a high-volume vehicle for a lower price. We’ve applied for a Department of Energy grant. If that loan comes through, we’ll have this vehicle on the road in 29 months" said Fisker himself.