Even though Fisker Automotive Inc. is not hurting for cash, with more than $300 million in private funding and a $529 million federal loan, the hybrid electric car manufacturer is looking for funding from the old-school car manufacturers that many might think are its enemy.
Some say taking money from an established competitor with the stodgy old technology of an internal combustion engine is heresy for the new breed of electric vehicle makers. Kevin Czinger, chief executive of electric car start-up Coda Automotive Inc., in a recent interview with VentureWire questioned the true commitment such companies have to electric and alternative vehicles.
But, he added, one should never say never. Meanwhile, Tesla Motors Inc. recently signed a deal in which Toyota Motors Corp. may buy up to $50 million worth of Tesla shares, in another sign of the new school and the old school sharing the road.
As for Fisker, the maker of a plug-in hybrid sedan called the Karma, it is talking to some gas-engine automakers about investments, said Chief Executive Henrik Fisker in an interview on the sidelines of the Lazard Capital Markets Alternative Energy Summit in New York on Wednesday.
In an email exchange after the conference, Fisker said electric-vehicle companies could see several benefits from teaming up with traditional car companies, including partnerships around gasoline engines for future models (a gas engine developed by General Motors Corp. is already integrated into the Karma).
“Of course, joint volume in purchase of batteries, etc., is a cost advantage for both sides as well,” he said. “Other future joint development and plug-in hybrid specific platforms and production could also be a possibility.”
The traditional companies could also learn something from the upstarts, Fisker suggested. During a panel discussion at the conference, Fisker said his company has done a few things very differently in the design of its cars and in its manufacturing that cut “hundreds of millions of dollars” and years from the process of making a new car. “We have very low overhead and we can move extremely fast,” he added.
Fisker declined to say which automakers he’s talked to, though the company does have a relationship with GM from its use of GM’s engine. Fisker also has made an offer to buy one of GM’s unused factories in Wilmington, Del., and GM holds an equity stake in one of Fisker’s partners and investors, Quantum Fuel Systems Woldwide Inc.
Fisker has already pre-sold several thousand of its luxury Karma vehicles, with customers paying $5,000 each in down payments. The car, which sells for around $88,000, is now on a dealer tour, going through 45 dealerships in the U.S. and 50 in Europe.
COMMENTARY: I have covered both Fisker Automotive and Tesla Motors, and if either is going to survive they will have to joint venture with the big automotive carmakers in order to survive. It will work to Fisker and Tesla's advantage to distribute their automobiles through major Detroit and Japanese automatkers. Vehicles are going electrical slowly, but surely, and Fisker and Tesla's electric vehicles are not bad, at least in the sportscar segment. My main concern is that the sports car sector is not very large. Both Fisker and Tesla realize this and either have or coming out with sedan's to meet the demands of the larger consumer market.
Courtesy of an article dated June 9, 2010 appearing in The Wall Street Journal's Venture Capital Dispatch
Comments