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Richard Read
A couple of weeks ago, Fisker gleefully announced fuel efficiency stats for its upcoming extended-range Karma sedan (67 mpg, though the math is a little fuzzy). Now the upstart automaker has another reason to celebrate: the U.S. Department of Energy has awarded Fisker a $529 million low-interest loan, which will help the company develop the $87,000 Karma and the upcoming Nina, a lower-priced sedan that will ring in around $45,000.
Roughly $169 million of Fisker's loan will be applied toward development of the Fisker Karma. Those funds will go toward the design of tools, equipment for manufacturing, and coordination of materials from U.S. auto suppliers to build the vehicle. The final product should arrive at dealerships by next summer.
The remaining sum -- just under $340 million -- will be applied to the company's Project Nina. Unlike the Karma, which will consist of mostly U.S. parts but be assembled overseas, the extended-range Nina is expected to be manufactured here in the U.S. The hybrid EV will likely appear in showrooms in late 2012, and Fisker currently anticipates a production run of 100,000 vehicles per year. Both models will be distributed via Fisker's network, which so far consists of 45 dealers in 20 states, though the company hopes to increase that number to 100 by 2012.
The DOE's loan to Fisker is slightly larger than the one it gave to Tesla -- a $465 million package intended to facilitate the roll-out of Tesla's own lower-priced sedan, the Model S, which should have a sticker price around $57,000. However, both amounts pale in comparison to the DOE loans given to Ford ($5.9 billion) and Nissan ($1.6 billion) during the first round of funding from the $25 billion program.
It may seem odd for the federal government to offer these low-interest loans to such vastly different programs. After all, Ford's loan will be used to help develop the Ford Focus EV (among other things), and Nissan's is being put toward the development of the Leaf EV at a Nissan facility in Smyrna, Tennessee. Both of those models are expected to be far more affordable than the Tesla Model S, the Fisker Karma, or the Fisker Nina. However, one could aruge that by funding a range of vehicles, the DOE will encourage (a) interest in EVs from a corresponding range of buyers and (b) development of cheaper, more efficient EV technology. Not that we'd never presume to speak for DOE chair Dr. Steven Chu, but he's a smart guy, so we'll give him the benefit of the doubt for now.
For additional details and perspective, check John Voelcker's article at GreenCarReports.
[DetNews]
Fisker KarmaEnlarge Photo A couple of weeks ago, Fisker gleefully announced fuel efficiency stats for its upcoming extended-range Karma sedan (67 mpg, though the math is a little fuzzy). Now the upstart automaker has another reason to celebrate: the U.S. Department of Energy has awarded Fisker a $529 million low-interest loan, which will help the company develop the $87,000 Karma and the upcoming Nina, a lower-priced sedan that will ring in around $45,000. Roughly $169 million of Fisker's loan will be applied toward development of the Fisker Karma. Those funds will go toward the design of tools, equipment for manufacturing, and coordination of materials from U.S. auto suppliers to build the vehicle. The final product should arrive at dealerships by next summer. The remaining sum -- just under $340 million -- will be applied to the company's Project Nina. Unlike the Karma, which will consist of mostly U.S. parts but be assembled overseas, the extended-range Nina is expected to be manufactured here in the U.S. The hybrid EV will likely appear in showrooms in late 2012, and Fisker currently anticipates a production run of 100,000 vehicles per year. Both models will be distributed via Fisker's network, which so far consists of 45 dealers in 20 states, though the company hopes to increase that number to 100 by 2012. The DOE's loan to Fisker is slightly larger than the one it gave to Tesla -- a $465 million package intended to facilitate the roll-out of Tesla's own lower-priced sedan, the Model S, which should have a sticker price around $57,000. However, both amounts pale in comparison to the DOE loans given to Ford ($5.9 billion) and Nissan ($1.6 billion) during the first round of funding from the $25 billion program. It may seem odd for the federal government to offer these low-interest loans to such vastly different programs. After all, Ford's loan will be used to help develop the Ford Focus EV (among other things), and Nissan's is being put toward the development of the Leaf EV at a Nissan facility in Smyrna, Tennessee. Both of those models are expected to be far more affordable than the Tesla Model S, the Fisker Karma, or the Fisker Nina. However, one could aruge that by funding a range of vehicles, the DOE will encourage (a) interest in EVs from a corresponding range of buyers and (b) development of cheaper, more efficient EV technology. Not that we'd never presume to speak for DOE chair Dr. Steven Chu, but he's a smart guy, so we'll give him the benefit of the doubt for now. For additional details and perspective, check John Voelcker's article at GreenCarReports. [DetNews]
Responses (14 total)
By AutoBoy #2, Posted: 9/23/2009
struggling a bit with the federal government giving loans for pretty high-end sports car development projects. very much appreciate the overall logic between helping kickstart green projects. feels like things could be a bit more discerning. regardless, great article.
@AutoBoy: It's definitely a concern -- although even the Ford Focus and the Nissan Leaf are projected to debut on the pricey end of things. Until the EV segment picks up some steam, the technology is going to remain fairly expensive.
_
That said, as someone who deals with government programs a good bit, I think the smaller loans given to Tesla and Fisker seem fair, in light of the much larger sums awarded for much more mainstream vehicles. And again: the cash arrives in the form of loans, which the companies will have to repay, unless they go bankrupt -- but really, what are the chances of that happening? Oh, wait...
By Jason #4, Posted: 9/23/2009
This is really bad using money that was printed out of thin air to loan to a company people hardly know anything about and a luxury company that may not even be able to stay in business.
The Dept of Energy, Stephen Chu must not have read Economics In One Lesson by Henry Hazlitt or doesnt care if this will cause more problems. The government should NOT be in the business of loaning money because goverment never lends by the strict standards that private lenders do. When a private lender lends out money they are risking thier own money so they will be more careful who they lend it to, because if they are3 not careful they will drive themselves out of business. When the government lends out money they are handeling other peoples money so they wont be as carefull who they lend it to because they dont have to worry about driving themselves out of business because they are not a business and the Federal Reserve is always be ready to bail them out. Since this is in effect our money we shoulve had a say into how the money is used. Most of the public didnt now about this until after it happened.
By elon musk #5, Posted: 9/23/2009
I am happy that Fisker got to join the free money party. It wouldn't have been fair that Fisker didn't get their hand out too. Once we are bailing out all car companies it might as well be fair.
By Jim #6, Posted: 9/23/2009
I'm sure Obama will prevent it in the future - if he knew...
By Elon musk Jr. #7, Posted: 9/23/2009
What can I tell @Elon Musk...
Don't you have enough money from pay-pal? why you need us to help you with this crazy idea of electric sport car for super rich people?!
By nebraska #8, Posted: 9/23/2009
@autoboy -- hard to see how we can bail out i-banks which simply move numbers around and not fund some actual development that can lead to cascades of jobs (if it works). your concern is well founded from the point of view of "why are wefunding anything" but at a minimum, compared to banks -- here there is at least a chance of something tangible beinbg created.
By greedo #9, Posted: 9/23/2009
I'm really glad to se. These cars coming to production. Anything we can do to help keep their development and production in the US is a good thing for our future, too.
By Javajunkie #10, Posted: 9/23/2009
What is the market for a $57,000 car? I don't care how green it is-the government backed this when the country is in a recession millions have lost jobs. And of course they pale in comparison to the loans to Ford and Nissan-those automakers serve a much larger sector.
By Jezza #11, Posted: 9/23/2009
Glad to hear Fisker got the money. They will be outsourcing production to Finland I believe, in the same factory that Porsche gets its Boxsters and Caymans built.
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