IRVINE, CA (WWJ) – The government has seized $21 million from electric carmaker Fisker, after the company failed to make a scheduled payment on its $192 million federal loan.
With Fisker’s growing financial problems, it was widely expected that the company wouldn’t be able to make Monday’s scheduled payment. The funds seized came from an account set up as collateral, when Fisker was granted the loan.
This comes amid increasing speculation that a Fisker bankruptcy filing could be imminent.
“The electric vehicle market is very limited, less than one percent of the market, well less than one percent,” says auto analyst Rebecca Lindland, now a consultant with Rebel 3 Media. “The market for vehicles that are over $100,000 — and Fiskers are $103,000 — is also very limited.”
So, Lindland says high expenses and low volumes have caught up to create problems for Fisker.
“It can be a recipe for disaster, and — unfortunately — that’s what Fisker has run into.”
Fisker was launched amid much fanfare at the 2008 North American International Auto Show. Founder Henrik Fisker was a well-known car designer, with a dream of making sporty, luxury cars, with extended range electric drive systems. When his original vehicle, the Fisker Karma, hit the market, it was scooped up by many Hollywood celebrities.
However, costs ran higher than expected, and a plan to build a second electric vehicle at a former Chrysler plant in Delaware never got off the ground. Fisker has gone through several CEOs, and founder Henrik Fisker recently left the company.
The federal loan money received by Fisker was part of a government program to loan car companies money to help them build more fuel efficient products. Fisker executives have been called to Washington for a Thursday hearing, where they will be grilled on how they used that loan money.
“Research and development certainly needs to happen in these circumstances,” said Lindland. “But, I think, also, when we look at the demands we are putting on the consumer tax dollar, there may be better uses of those funds.”
Recent attempts by Fisker to raise new funds have not been successful. The company hasn’t built a car since last summer, and recently laid off most of its work force.
To Lindland, this harkens back memories of another company started by a high profile auto executive back in the 1980s that made conventionally powered luxury sports cars. The DeLorean became one of the industry’s best known failures.
“It’s the same kind of approach. It’s the same kind of investment that’s needed. And, unfortunately, I fear it’s going to be the same type of outcome.”