To hear some pundits say it, Fisker Automotive is in death throes because the Dept of Energy froze the loans, and the company laid off some workers, instead the company’s inaugural business update paints the picture of a company successfully selling the Karma and raising investment dollars to launch production of the Atlantic.
Fisker Automotive issued a “business update” today saying the company’s business and funding is solid, with over $1 billion in equity investments, and sales of over 1000 Karma’s. The news release doesn’t say it, but this business update seems targeted at answering naysayers criticisms over the last couple months following the loss of the Dept of Energy loan and subsequent layoff of the workers preparing the factory for manufacturing the Atlantic.
The company has generated over $100 million in revenue in the last four months. Additionally the company has delivered over 1,000 Fisker Karma’s since the December 2011 launch of that vehicle. Demand is strong for the Karma, with brisk sales in the Netherlands and a distribution agreement in the Middle East.
While the company lost the Dept of Energy loan, and subsequently laid off the workers retooling the plant at which the Fisker Atlantic was due to be built, Fisker Automotive has continued raising equity investment. We noted this earlier, that the company was in the middle of its Series D financing round when the DOE froze the loans, and the response by Fisker’s management was to double down on raising private equity. The company has raised $174 million of additional private financing since the start of the year, reaching a milestone of raising over $1 billion in equity since the company’s launch in 2007.
In April when the company revealed the long-awaited Fisker Atlantic, company management kept a tight lip on whether the frozen DOE loans would delay manufacturing of the Atlantic. The loan program included $350 million earmarked to support production of the Atlantic, and losing that funding would obviously throw a kink into the business plan. The additional equity raised so far does not match the $350 frozen by the DOE, and while Fisker’s management is showing bravado in trumpeting their prowess at raising investment dollars, what will matter is when will the company raise enough to restart the production of the Atlantic. In February, Fisker’s spokespersons downplayed concerns over funding, saying the company was pursuing a “plan B” in raising private equity financing rather than relying on the DOE loan.
Originally the Atlantic was slated to begin production in late 2012 or early 2013. Clearly, because the layoff affected the workers preparing the factory at which the Atlantic was to be manufactured, production of the Atlantic will be delayed. The question is, by how much? Recently leaked internal Fisker documents say the Atlantic launch will slip until 2014.
Tom LaSorda, Chief Executive Officer of Fisker Automotive, said: “We are encouraged by solid demand for the Karma, our unique extended-range luxury model. Pending completion of investment sourcing, we are poised to press ahead with further market expansion and development of our higher volume model, the Fisker Atlantic.”
Another recent achievement is that Fisker became the first automaker to launch vehicle manufacturing under the Federal Government’s Advanced Technology Vehicle Manufacturing (ATVM) program. This Bush-era program of loans to promising advanced technology vehicle manufacturers is the source of the DOE loans. Fisker’s loan program supported both the Fisker Karma and Fisker Atlantic, and most of the DOE loan money received by Fisker went to pay for design and engineering of the Karma by Fisker’s staff in Los Angeles. What’s frozen is the $350 million slice of this loan program earmarked to the Atlantic.
The business update said nothing about some of the negative taint circulating around Fisker Automotive. For example a recent fire destroyed a garage in which a Fisker Karma was parked, and while Fisker denies the fire was caused by the Karma, the NHTSA has launched an investigation. The business update said nothing about this, nor did it discuss allegations some make that because of the frozen DOE loans and subsequent layoffs, that Fisker Automotive is in its death throes. While this “death throes” idea wasn’t directly addressed by the company, the business update paints the picture of a company that is successfully selling the Karma, and is successfully raising capital to build the Atlantic. This does not sound like a company in its death throes.
Henrik Fisker, Executive Chairman of the company, said: “There is great confidence from the investment community, our customers and the media in what we have achieved in bringing such a beautiful and innovative car to the marketplace in record time. Treading a new path in any industry is never easy, but we have set out to re-define and re-shape the way the world thinks about cars, and I am proud of what the Fisker team has achieved so far.”
Originally published at TorqueNews https://www.torquenews.com/1075/fisker-releases-business-update-showing-company-isnt-death-throes
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