Two Chinese automakers, Dongfeng and Geely, appear ready to adopt the beleaguered U.S.  electric vehicle maker Fisker Automotive into their respective electric vehicle (EV) portfolios.  For Fisker, the acquisition cannot come soon enough, as multiple failures with its battery supplier, the destruction of more than 300 Fisker Karmas in hurricane Sandy, and bad press thanks to vehicle fires have left the company’s production lines idle and money tight.  When the dust settles, Fisker will most likely join the ranks of the western EV companies who on the precipice of failure were bought by Chinese companies.  For the Chinese automakers, the acquisition of Fisker may be the country’s best chance to finally sell a full speed EV outside the Asia Pacific region.

China leads the world in terms of total EV production, but most Chinese-produced EVs are bicycles, motorcycles, low- to medium-speed vehicles, or buses.  The vast majority are sold to the country’s massive domestic market. Meanwhile, the Chinese government has announced lofty targets for production and adoption of full-speed EVs – targets that look out of reach, for now.  Chinese automakers have tried to live up to the targets, but sales have been exceedingly more dismal than markets in Europe, North America, and Japan.  Additionally, efforts to develop a robust export market for the country’s EVs outside of Asia Pacific have been disappointing.

One of the problems is that the market for EVs isn’t large enough to provide Chinese firms the opportunity to compete against domestic and Japanese automakers that have led both North America and Europe for the last century.  In addition, China’s EVs have had difficulty meeting safety standards in the United States and aren’t priced competitively with any EV in their respective classes outside of China.

Made in China

CODA is the first and most productive effort to date.  A remake of the Chinese Hafei Saibo, the car has a 31 kWh battery pack, a range of 125 miles, and a price almost $10,000 more than the Nissan LEAF.  The CODA went on sale in mid-2012 and reportedly sold less than 100 vehicles by the end of the year.  A more visible effort has come from BYD, a Chinese company backed by Berkshire Hathaway, Warren Buffett’s investment firm.  The company has long aspired to make a beachhead in the major European and U.S. markets but has only been able to sell its EV, the E6, to taxi fleets in New York City and London.  The E6 has a range of 185 miles on a battery of 60 kWh.  It costs $58,000 in China and would have a hard time competing against the growing class of EVs with shorter ranges and price points below $30,000.

Buying Fisker wouldn’t mean that a competitive Chinese-built EV has finally made it to the United States or Europe (the Karma is produced in Finland).  However, it would give the Chinese owner the unique opportunity to finally enter the PEV markets in the States and Europe with a vehicle that, despite its problems, has made a decent showing at a reasonable price.  The Karma couldalso  make quite a splash in China where the luxury car market is booming.