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Fisker Raises Cash, Readies Plan for Second EV

Fisker Automotive brings in an additional $100 million which it needs to expand sales and plan production of its second car.
September 26, 2012

Fisker Automotive today said it has raised an additional $100 million and will announce production plans for its second extended-range electric vehicle in December.

Famed designer and former CEO Henrik Fisker with a design prototype of the Atlantic. Credit: Fisker Automotive.

To date, Irvine, Calif.-based Fisker has raised $1.2 billion, making it one of the most heavily funded startups. The money will be used to expand its sales channel internationally and further develop the Atlantic, a mid-size sedan with the same hybrid powertrain as the Fisker Karma luxury sports car.

The funding is certainly good news for Fisker, but it comes amid events this week which point to some of the challenges facing electric vehicles.

Competitor Tesla Motors said yesterday that it has not been able to meet production targets for its Model S all-electric sedan, which will result in it missing sales targets. As a startup, Fisker, too, faces challenges in manufacturing a new product and developing its supply chain. (See, Tesla Blames New Delays on Production.)

Toyota this week said it is scaling back plans for its electric minicar, called the EQ, and beefed up its commitment to parallel hybrids, which the company says deliver fuel economy without adding significant costs. (See, Toyota Scales Back Electric Vehicles Plans.) Fisker’s cars don’t have the range limitations of all-electric vehicles, but it series hybrid design relies on larger expensive batteries. 

Fisker itself, meanwhile, received an overall negative review of the Karma from Consumer Reports. Its reviewer lauded the car’s bold styling and relatively good mileage but said the car is cramped inside and lacks the fit and finish of cars in its luxury class.

In August, the company recruited former Chevy Volt vehicle line director Tony Posawatz from General Motors to be its CEO, the third CEO for Fisker in a year. Like the Volt, Fisker cars run on electric motors and have a gas engine to maintain battery charge for longer trips.

So far, Fisker has sold 1,500 of its Fisker Karmas, which cost more than $100,000, in the U.S. and Europe. In December, it will announce a timeline for producing the Atlantic, the company said in a statement. The Atlantic is expected to cost between $50,000 and $60,000.

To build the Atlantic, the company intends to draw on a loan approved under the Department of Energy’s Advanced Technology Vehicle Manufacturing program. It has already borrowed $193 million but a former GM factory in Delaware purchased to make the Atlantic has been plagued with delays, according to an article this week in Delaware Online

The Karma suffered from delays and technical glitches as well. During a Consumer Reports test, batteries supplied by A123 Systems failed. There is at least one case of a fire from faulty equipment but it was not linked to the battery.

In a statement, Posawatz said the $100 million E round is “another major vote of confidence in Fisker’s pioneering technology and business model. We are grateful to both our investors and our initial customers who have supported our company and are quickly becoming our biggest advocates.”

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