Fisker’s first car, the Karma, is being assembled by Valmet in Finland, but Fisker is already looking ahead. Following the Tesla model of offering a second sedan at around half the price of the brand’s flagship nameplate, Fisker is negotiating the purchase of the former Solstice/Sky plant where it plans on building a $48k “family-oriented” hybrid. The WSJ report Fisker is eying up to 100,000 units of production, employing 1,500 workers. Fisker is also following the Tesla example for funding; the EV company will spend most of its $528m in DOE ATVM loans developing its new lower-cost model (the Karma will retail for around $90k) and retooling the Delaware plant. Though companies like Fisker and Tesla surely appreciate these loans, one can’t help but wonder if they encourage an unhealthy level of optimism in a company that has yet to bring a vehicle to market, let alone record a sale. Though it’s understandable that fledgling EV companies would begin with a luxury model and work towards mainstream offerings, shouldn’t there be some indication of the flagship’s success (especially if it involves a more-complicated range-extending ICE) before going full-speed ahead for a 50 percent cheaper model?
Sounds like Preston Tucker is laughing from his high vantage point, if you ask me.
Only this time, the tables are turned and it’s the taxpayers getting screwed rather than Tucker and his private investors.
The more things change, the more they fundamentally stay the same.
“Bendover, Mr and Mrs Taxpayer”
big government or a revolution?!
So much for that Delorean rebadged Solstice.
https://www.thetruthaboutcars.com/wild-ass-rumor-of-the-day-delorean-plus-solstice-equals/
This guy’s prior car company, Fisker Coachbuilt, wasn’t a smashing success selling rebodied SLs and 6 Series. Only a few were sold.
I have a lot more faith in Fisker than Tesla, if only because they started with people who have been in the industry before rather than adding them after they flailed around for a few years. Fisker himself also seems far less egomaniacal than Musk. or keeps it to himself better.
if the EV makers end up making money, paying back the loans and employing people, it’s money well spent for the return. even if the products are luxury niche items in the US market, the need for (PH)EVs in Europe due to various regulations mean that Fisker’s hope of 50% export volumes would be a serious win for everyone involved, something which US-based manufacturing has not seen in a long time.
Contrary to faygo, I have more faith in Tesla than Fisker. Tesla actually sells cars, over 1000 by now. I’m very much looking forward to the Model S.
If the EV makers end up making money, paying back the loans and employing people, it’s money well spent for the return.
I disagree. Even if Tesla and Fisker pay back the money, the loans were a bad idea. Governments should not be using taxpayer money to fund private companies. If they do, they should take an ownership stake in the companies, as they did with GM.
Giving loans to one electric car company over another distorts the market. It makes winners based on how well they appeal to politicians, not how well they appeal to buyers.
I don’t care how poor the capital markets are. A good company can always find private capital. Giving Tesla and Fisker public capital was a big mistake.
This Fisker plant is a great example of the dangers of this. Our money is being used to buy it. But we won’t own it. How does that make sense?
Not sure how I feel about this overall, however I would have rather seen the $50B flushed down the GM cesspool go in $500M chunks to 100 start-ups and see 5 of them succeed and prosper.
Bunter
This is a good investment, very good for the Wilmington area as well. I’m excited about both Tesla and Fisker. Especially excited about the Model S (which I think has a much better chance of success than the Volt).
For those saying this is funding rich guy’s toys, remember that 100 years ago ICE cars were rich man’s toys, too. The technology will trickle down.
Wow. Companies achieving “success” through government handouts. Again. Ethanol, green energy, and now electric cars!
Explain to me how you can develop an all new vehicle, high-tech to boot, for $500 million??
More tax money being flushed down the toilet chasing sunshine and butterflies. But if we wish harder, it might actually happen!
Jerome10-Not saying I like the idea.
Just see it as more likely to have some value that keeping a proven wealth destroyer in operation. The $500M is not the only investment in these companies either. Unlike GovMo and Fiatsco, private capital will actually look at some of these guys.
On the whole I’d probably prefer the Gov just stay out of it.
Just some thoughts.
Bunter
I wonder how many people on here would have moaned about the government “wasting taxpayer money” back in the 1960s when it researched the technology that eventually created the internet?
And don’t tell me “it’s different! these are private companies!” Defense contractors are private companies, too.
For those saying this is funding rich guy’s toys, remember that 100 years ago ICE cars were rich man’s toys, too. The technology will trickle down.
That reminds me of a couple of quotes from car history.
A 1906 Harper’s Weekly article noted: “There are more than 200 persons in New York who have from five to ten cars apiece. John Jacob Astor alone is credited with thirty-two.”
Also in 1906, then Princeton-president Woodrow Wilson said: “Nothing has spread socialistic feeling more than the use of the automobile . . . a picture of the arrogance of wealth.”
For those saying this is funding rich guy’s toys, remember that 100 years ago ICE cars were rich man’s toys, too. The technology will trickle down.
That reminds me of a couple of quotes from car history.
A 1906 Harper’s Weekly article noted: “There are more than 200 persons in New York who have from five to ten cars apiece. John Jacob Astor alone is credited with thirty-two.”
Also in 1906, then Princeton-president Woodrow Wilson said: “Nothing has spread socialistic feeling more than the use of the automobile . . . a picture of the arrogance of wealth.”
The government has given money towards electric vehicle research for many years. More recently PNGV and the Future Car partnerships but to no avail. You can lead a horse to water…
In my cynical view the car industry is averse to building anything that has a good chance of exhibiting the longevity of a Hoover vacuum cleaner. Not enough wearout mechanisms to warrant replacement.
The only manufacturer of a viable electric vehicle dropped it while finding the resources to fund a niche sportscar. It has the Aveo as its entry level car ! Good long term thinking there.
We can at least expect the Fisker company to provide the motivation in the direction of low polluting vehicles if nothing else.
Starting any new business is risky today without including the government as a stakeholder since the government has so many ways to tax a startup out of business. Although I am against the use of taxpayer funds – it speaks to a form of slavery – clearly the venture capital route hasn’t worked either, Cerberus anyone ?
The american business model is broken. There is lack of shareholder democracy.
Companies are allowed to grow too large.
Then we say they are too large to fail, making the government the lender of last resort.
When the necessary housecleaning at the top looks too much like intervention from Big Brother it only makes sense that the government would turn around as it has done here and take an easier route by reaching out to become the lender of last resort to a company that is already “with the program”.
It is not that important for the government to be fixated about its ROI, unlike an investor, since it can expect immediate returns in the form of the income tax on those newly employed workers. Significant quantities of cash from paycheques also go back to municipal and county levies.To anyone who thinks that the local govt would always get its due from the citizens anyway, I would remind them that both Detroit, Michigan and Hamilton, Ontario are experiencing migrations to other areas.
BTW it is assumed the DOE is the only donor. It wouldn’t surprise me if Delaware and the local municipality are also chipping in, simply because at high taxation levels it is important to maintain a tax ‘balance’ so as not to allow any one of these government entities from benefitting at the expense of the others.
I live near this plant. Locally there is much fear over what will happen, especially after the Chrysler plant went down in Newark a few miles away. This facility is huge and there is no plan for what to do with it if they can’t make cars there.
If Fiskar wants to give it a shot then fine. The only other alternative is to shutter the building and watch it fall apart.
The picture above is actually Elsmere DE from the air not Wilmington. Although the plant is reported as being in Wilmington it is actually in this little unicorporated part of New Castle county. I had the plaesure of touring the plant in 1996 on the occasion of it’s 50th anniversary. The plant is much older than Chrysler’s in nearby Newark, which tells me that FIAT may have plans for it so it’s not for sale like GM’s facility on Boxwood Road.