Cleantech Market Intelligence
Fisker, Like Other EV Makers, Loses Its Founder
Henrik Fisker, the co-founder of EV maker Fisker Automotive, has resigned his post as executive chairman. The move is not uncommon, especially in the plug-in electric vehicle (PEV) industry. Fisker joins Martin Eberhard of Tesla, Kevin Czinger of CODA, and Shai Agassi of Better Place as founders of next-generation automakers who are no longer part of the company they created. The departure of the founder is often a necessary function of the company’s growth, as visionary perspectives of the market and the product must eventually give way to more market-driven and realistic outlooks. Little information concerning the specific differences Henrik Fisker had with management is available; however, the circumstances that led to the split are well documented.
Fisker Automotive was founded in 2007 by Fisker and Bernhard Koehler in association with Quantum Technologies, which designed the plug-in hybrid (PHEV) drivetrain for the company’s first vehicle, the Karma. The company’s goal was to bring the Karma to market by late 2009. Fisker got a federal loan from the Advanced Technologies Vehicle Manufacturing (ATVM) loan program in 2009 to develop the company’s second vehicle, a lower-cost PHEV, the Atlantic.
The company’s product strategy and business model seemed sound. Like Tesla, Fisker aimed to dilute the premium price of electric vehicles into the costs of a high class luxury vehicle. The Karma developed a cult-like following, high profile investors, like Leonardo DiCaprio, and drivers, including Justin Bieber. Where things went wrong for Fisker was the company’s inability to execute on its ambitious plans, plus a string of misfortune.
The company launched into the teeth of the financial crash and the ensuing recession. After drawing $193 million on the ATVM loan, Fisker’s credit line froze after it failed to meet specific milestones set as conditions of the loan. Nevertheless, Fisker powered through and began deliveries of the first Karmas to customers in July of 2011, missing its launch date by a 1.5 years. Unfortunately the loan and the late start were not the end of the company’s problems.
Fisker announced a recall at the end of 2011 because of problems concerning the vehicle’s battery pack supplied by A123. Then, two Karmas mysteriously caught fire in mid-2012 – one while sitting in a garage, the other while parked in a grocery store parking lot. The fires sparked the second recall to replace the low-temperature cooling fan that caused the fires. Then the company lost over 300 vehicles to hurricane Sandy in November 2012, not long before its battery supplier, A123, declared bankruptcy. Production of the Karma was halted indefinitely.
Unfortunately for Henrik Fisker, the company’s troubles are a reflection of the state of affairs in the PEV industry: it’s all about the battery. Now, like A123, Fisker will most likely become a Chinese subsidiary. The car and the business model aren’t likely to change; if anything the Karma and possibly the Atlantic could be in store for some much needed good news concerning production. The luster and appeal of the vehicle, however, could fade along with the company’s founder and champion.