How Fisker Failed, and Why the Karma Deserves Respect

Fisker Karma Front Quarter

What began as one of the greatest experiments in modern automobile manufacturing has sadly turned into one of the industry’s greatest failures. Last week, Fisker Automotive announced that the struggling automaker’s namesake and co-founder, Henrik Fisker, resigned over “several major disagreements…[with] executive management on the business strategy.” Geely, the Chinese owners of Volvo and favored bidder for the struggling automaker, has announced it will not attempt to acquire a majority stake in Fisker. This is distressful, as the small number of good potential owners is dwindling; Dongfeng Motor Corp is the only other big-name suitor rumored to make an offer.

2012 was a difficult year for the California-based carmaker. In January, defects in the infotainment system software led to a recall as well as halted sales. In March, the supplier of the Fisker Karma’s batteries, A123 Systems, announced that batteries produced in its Livonia, Michigan plant would need to be recalled due to “defective prismatic cells”; the recall cost A123 $55 million and would eventually lead to its purchase by Chinese-owned Wanxiang Group in August. These cells were reportedly the same ones that caused the Karma purchased by Consumer Reports to die almost immediately after delivery. July saw production halted due to excess inventory, a stoppage that continues to this day. In August, the Karma was recalled again following a fire in Woodside, CA, which may have been caused by faulty cooling fans. The recall that ensued led to some Karmas waiting at Port Newark for replacement fans in October when Superstorm Sandy hit the area. The saltwater that soaked the electrical systems started a fire in the hybrid sports sedans that destroyed 16 Karmas and a Toyota Prius. Roughly 330 more Karmas that were being shipped from Europe were also flooded, resulting in a total loss of nearly $33 million for Fisker. Insurance agent XL Insurance denied the claim, leading Fisker to sue the agency but ultimately drop the suit last month. Also in October, A123 declared bankruptcy, which would have been a major concern to Fisker if Karma production were to ever be restarted. The same month, Fisker announced that the Atlantic, which would have sat below the Karma, would be delayed for at least two years.

2013 will likely see Fisker’s last gasp for air, as the automaker is struggling on life support without anybody willing to switch out its oxygen tank. When both Geely and Dongfeng were in talks, a Chinese takeover seemed imminent, as Geely had not only the capital to back up the purchase, but was also the preferred suitor over Dongfeng. Now that Geely is out of the picture, Fisker is unlikely to accept a bid from government-owned Dongfeng, whose complicated, layered management structure is ill-suited for a car existing in a segment that requires quick thinking and innovation. Henrik Fisker’s sudden departure is a death knell for the company, as it is a sign that even its co-founder has lost hope in its future. He does, however, believe in his car, as he immediately rushed over to a nearby dealer in Santa Monica and purchased one himself.

Fisker also has experienced a good deal of resistance in Washington after securing a $529 million loan from the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program in April 2010. Fisker received $193 million of the loan before the DoE froze funding after Fisker failed to reach required sales goals. This led to several Republican senators, including John Thune and Chuck Grassley, to publicly decry the use of taxpayer funds in risky green projects, as well as grumble about the Karma’s production, headquartered in Finland rather than the US. The recent planned sale of Fisker to Chinese manufacturers has only intensified the debate.

Fisker Karma Interior 1

The real victim in this entire fiasco is the Karma and its buyers. Disregarding the problems with its battery manufacturer, the Kamra itself is a worthy competitor in the sports sedan segment. The Karma is a beautiful sedan whose curvaceous shape was penned by Fisker himself; he also designed the BMW Z8 and Aston Martin DB9 before venturing out on his own. It has an absolutely gorgeous, nonconventional steering wheel, and the interior can even be tuned for the environmentally conscious, with wood salvaged from burned trees and seats made of fabric-based suede rather than the standard leather. At more than 2 1/2 tons, the car isn’t exactly light but with 403hp and 959 lb-ft of instantly available torque sorts out the weight problem rather nicely.

It’s really too bad that the Fisker and its suppliers couldn’t keep the Karma free from defects, because it truly is an incredible piece of machinery that deserves more than what it got. Fisker’s primary competitor, Tesla Motors, once faced a period of extraordinary doubt in between discontinuing its sole offering, the Tesla Roadster, and ramping up production of the Model S. The difference between the two is that Tesla was able to utilize the bottomless pockets of co-founder and CEO Elon Musk to save it from the doldrums, a lifeline that Fisker does not have.


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About Cameron Rogers

Cameron Rogers is the founder and lead writer at Downshift Autos, the only automotive blog on the Internet*. Born in the back of an AMC Gremlin, Cameron vowed to never let this extraordinarily embarrassing detail define him, so help him God. He drives a GTI but absolutely will not shut up about it if somebody asks. He will not hesitate to let people know that no, they shouldn't get a Porsche 911 when a Morgan 3 Wheeler is so obviously the superior choice. He is obsessed with the seats of a Carrera GT and the steering wheel of a Fisker Karma. He once sat in the driver's seat of a Tesla Model S, his greatest accomplishment to date. He is just now realizing that writing an autobiography, however miniscule, in the third person is odd and unnerving. *As of this writing, Cameron has been informed that there are, in fact, many websites and blogs centered around cars and car culture. He regrets his grievous error.

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