The Fisker Karma production not dependent on DOE loans

Last week when it was announced that the US Department of Energy loans had been put on hold, many began to question the long term future of the Fisker brand. This was bolstered by the fact that the budding auto company halted their current work at the Delaware production facility where the upcoming compact currently named Project Nina has been taking place. Henrik Fisker explained to us that while the delay in receiving the Department of Energy loans had slowed things down, the current negotiations were agreed upon by both the DOE and Fisker, as the automaker works to come to terms with the feds on milestones on which to base the future of their loan agreement. Most importantly, Henrik Fisker stated that the continued production of their gorgeous Fisker Karma sedan is not dependent on these DOE loans as the sales of the Karma are allowing the new production model to pay for itself. In short, the money coming in from the early sales of the new Karma sedan have been enough money (coupled with investment funds, of course), to continue production of the extended range electric vehicle.

Henrik Fisker went on to explain the full situation behind the current DOE loan discussions. When the company first entered into the agreement with the US government, like many US federal business dealings, Fisker was given certain “milestones” that they were to meet in order to continue their acceptance of the DOE loans. (An example of government milestones are the requirements set forth to Fiat when they took over at Chrysler.) Fisker admitted that some of those milestones were overly ambitious and while business has been good for the new automaker, they weren’t able to meet some of those required measures. Because of the company falling short on some of those expectations, Fisker has entered into talks with the US Department of Energy to attempt to agree upon new milestones on which the future of the loans will be based.

Mr. Fisker didn’t go into any detail, but he also explained that there was a “Plan B” for their financial future in case talks with the US government run long. However, the most important fact mentioned by Henrik Fisker during our discussion with him was that the Fisker Karma, which is currently heading to dealerships around the world, is bringing in enough money to cover the costs incurred by producing and selling the cars.

The Department of Energy loans aren’t crucial to the company’s future at this point but an extra $400 million would go a long way in bringing along the upcoming Project Nina – which is planned to be built at Fisker’s production facility in Delaware. The Nina is expected to be a compact sedan based on a similar drivetrain architecture to that found in the Fisker Karma but the Nina is expected to be a little easier on the budget than the $100k+ super luxury Karma sedan.