Chinese firm steps in with A123 Systems loan

A loan from the Chinese firm Wanziang Group to A123 Systems has put the fate of electric car maker Fisker in question.

Electric vehicle battery maker A123 Systems filed for bankruptcy recently, and now a fight over the company’s assets is heating up. The Chinese firm Wanxiang Group Corp. has been circling for some time, and will now lend A123 Systems $50 million for continued operation, thus keeping the company from losing its value ahead of any bidding for its assets. This loan put Wanxiang in a more advantageous position to acquire A123 Systems, and this move has made some people nervous.

Wanxiang had originally offered, just a month ago, to buy an 80% stake in A123 Systems for a sum of $465 million, according to a report in The Wall Street Journal. This offer was blocked by lawmakers because A123 Systems had taken $132 million in federal grant money, and therefore couldn’t be simply handed over to a foreign company. This loan buys A123 Systems the time to secure federal approval of a Wanxiang buyout.

Among those hoping Wanxiang doesn’t get approval is Johnson Controls, who are also after A123 Systems’ assets, and had originally put in their own bid to offer a loan. But the most worried are the automakers who use A123 System’s batteries. These include GM and BMW, but it is Fisker with the biggest commitment. All of Fisker’s cars use batteries from A123 Systems, and with the fate of the battery maker  unclear, Fisker is becoming increasingly unsure about their own future. Even if a new battery supplier could be found tomorrow, A123 Systems still has warranty obligations to Fisker estimated to be as much as $100 million. Fisker has a hard enough time as start-up automotive company, and with the loss of some $30 million worth of vehicles to hurricane Sandy, Fisker could really use a break when it comes to the question of batteries.

It’s unclear what exactly will happen to A123 Systems, but the loan from Wanxiang doesn’t look good for Fisker. The company could lose their battery supplier and also be on the line for millions in warranty obligations. It only remains to be seen if the makers of as beautiful a car as the Karma will be done in by another company’s inability to turn a profit.

Source : digitaltrends[dot]com

Tesla CEO calls Fisker Karma “mediocre”

Tesla CEO Elon Musk criticized rival Fisker Automotive's Karma sedan, saying the company had farmed out the most important development work.

Tesla Motors and Fisker Automotive are both building green luxury cars, but each has gone their own way. The Tesla Model S is fully electric, while the Fisker Karma has a gasoline engine-generator to charge its batteries. That seems like the makings of a rivalry, something Tesla CEO Elon Musk confirmed in a recent interview with Automobile Magazine.

“I don’t think very highly of Henrik Fisker,” Musk said of Fisker’s eponymous founder. He called Fisker’s $105,000 Karma a “mediocre product at a high price,” saying that the sedan lacked interior and trunk space yet was physically larger than his company’s Model S.

Musk also criticized Fisker for “outsourcing” what he considers the most important parts of car design: engineering and manufacturing. He said Fisker only cares about the way a car looks, but nothing more substantive.

The Karma is built by Valmet Automotive in Finland, the same company that assembles the Porsche Boxster and Cayman. The company talked about opening its own plant to produce a new car, the Atlantic, but those plans are now in limbo.

The Karma’s powertrain was developed by Quantum Technologies, and it uses a 2.0-liter, four-cylinder engine from General Motors. The Atlantic will use a gasoline engine from BMW.

Tesla did outsource a significant amount of the engineering work on its first car, the Roadster, which essentially an electric Lotus Elise. However, almost every part of the Model S was developed in-house.

Musk does think his competitor designed a nice car. “It looks good. Particularly from the side it looks good. I don’t love the front. It looks too much like a caricature of a Mexican Bandito—the grille,” he said.

Design is where the rivalry began. Back when Fisker was re-skinning BMWs and Mercedes-Benzes, Musk hired him to style the Model S. At some point, Fisker had the idea for the Karma, and Musk sued him for working on his car while he was under contract to Tesla. Fisker won the suit.

Fisker’s response to Musk’s attack was casual. He noted that he had won the suit, thanked Musk for complementing the Karma’s styling, and wished him well.

Despite differences in size and technology, Tesla and Fisker produce the only truly green luxury vehicles on the market, so comparisons are inevitable.

The EPA rates the Karma at 54 MPGe, while the Model S with the biggest battery pack is rated at 89 MPGe.

The Karma will accelerate from 0 to 60 mph in 5.9 seconds, and hit a top speed of 125 mph. Tesla claims a 0 to 60 time of 5.6 seconds, 4.4 seconds with the Signature Performance Package.

A loaded Model S Signature Performance with the largest battery pack costs $105,400, before a $7,500 Federal tax credit. The Karma starts at $105,000, although most models will roll out of showrooms with $115,000 stickers. Tesla does offer a base Model S with a $57,400 sticker, but the Fisker Atlantic, which will be closer to the Model S in size, is expected to cost roughly the same.

Source : digitaltrends[dot]com

Show us the money: $150 million needed for Fisker Atlantic development

With a lot riding on Fisker's next mode, the Atlantic, it appears the company will need to find $150 million before it can get things off the ground.

If you haven’t been keeping pace, Fisker recently announced the appointment of its new CEO Tony Posawatz. Coming from General Motors, the newly appointed chief is no stranger to the green car scene, having been instrumental in the development of the Chevrolet Volt and enjoying a career that spanned 32 years.

Of course, jumping from GM to Fisker Automotive will be no easy task for Posawatz, and it appears the new boss already has an uphill battle on his hands. He will be charged with steering the company out of murky waters and part of that plan will include successfully generating the funds needed for the  eye-catching  Fisker Atlantic plug-in hybrid, which debuted just ahead of the  New York Auto Show last earlier this year. According to recent Reuters report, Poswatz will be tasked with ensuring the company is able to generate the requisite $150 million needed to begin production on the Atlantic.

Evidently, though there seems to be a lot riding on the bolstering of its finances, with one of Fisker’s key investors telling Reuters that strengthening the company’s financial position is crucial not only for covering the operating expenses of the new model, but for the development of future products in the pipeline as well.

Despite the fact that California-based auto start-up has managed to build some rather handsome vehicles with both the Karma and now the Atlantic, it’s no secret that Fisker is going through a seemingly endless  rough patch. The beleaguered automaker’s run of bad luck extends not only to the Fisker Karma, which can’t seem to stop mysteriously catching fire,  its A123 systems supplied batteries, the poor taste of some of its owners, and what has always been an issue in the background: its finances. No doubt Fisker’s financial woes stem from many of the  setbacks and problems it had to deal with along the development process, but perhaps most hard hitting was losing more than half of its $529 million loan from the Department of Energy.

Still, the company is looking to persevere despite its difficulties and has stated it will seek out private funding in order to enhance its financial position. With Posawatz at the helm, Fisker will undoubtedly hope to put the issues surrounding its batteries and finances firmly in its rearview. According to company documents filed with the U.S. Securities and Exchange Commission, Fisker has raised $1.01 billion from more than 100 private investors over the past five years. 

Source : digitaltrends[dot]com