Fisker Puts Brave Face on Poor Karma Sales, Looks To Atlantic For Future

MAY 30 2012 BY JAY COLE 3

Fisker Automotive put out their “inaugural business update”, and attempted to put their best foot forward.  Amongst the highlights were:

  • $100 million revenue generated in four months to April 30
  • 1000 Karmas delivered to customers since launch
  • Private equity funding exceeds $170 million in 2012…passing 1 billion in total
  • New Atlantic model unveiled in New York
  • Record sales in Netherlands signal European progress
  • Distribution deal agreed in Middle East

Realistically looking at these points, there is one exceptional accomplishment, one terrible one, and four points of meaningless chatter.

The Good:  Over a billion dollars raised!  Quite simply Henrik Fisker is a player when it comes to raising money.   Compare this accomplishment to the fact that Elon Musk over at Tesla had to fund the first two rounds of financing completely on his own, and you understand how significant this was.

The Bad:  1,000 Karmas delivered since launch.  This is a hideous result for Fisker.  About this time last year  they expected to ship 7.000 Karmas in 2011 alone.  Then by November of 2011, they had changed 2011 estimates to 1,500, but maintain moving 15,000 units  in 2012.  This is an abject failure to meet goals by Fisker.

What is interesting in this update is what is missing.  Namely excuses.  Gone are the reasons for lack of production on the Karma.  No more ‘government slowed the approval process’ or ‘battery supply issues’.

Tom LaSorda, Chief Executive Officer of Fisker Automotive, said this of the Karma and upcoming Atlantic:

“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.”

To say Mr. LaSorda is putting a brave face on the Karma would be an understatement.   The demand for the car is no where near what the company had said previously, or is what they are still trying to portray.

Orders with battery supplier A123 have been slashed, and the lithium battery maker is constantly writing down the value of the contract.  Internally, the company hopes to sell about 5,000 copies of the Karma per year going forward if possible.

But none of the bad news matters:

Hi. I’m Henrik Fisker, and I Can Sell Anything!

Why?  Because the Karma is old news now to Fisker.  The Karma was never build to make money or be a wide commercial success, its job was to put Fisker on the map, to give them credibility, and thereby enabling the start-up to raise money…and it did that in spades.  In this regard the Karma is/was a raging success.

Henrik Fisker, Executive Chairman of the company, didn’t say much, but this snippet is really the heart of the press release “There is great confidence from the investment community…”  In fact, this probably should have been the only thing in the business update, because this is all that matters.

Where the company will ultimately be successful or fail, is with the Atlantic and the government’s DoE loan money, which after more than a few delays and hiccups of its own should be out in mid-2014.

Read Fisker’s Inaugural Business Update HERE

Fisker Atlantic – Hope for the Future

Categories: Fisker / Karma

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3 Comments on "Fisker Puts Brave Face on Poor Karma Sales, Looks To Atlantic For Future"

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Good report Jay. So I guess Fisker will continue to scramble to get the Atlantic to market, and hopefully the investors will be patient enough to see it through.

Question for you…do you see Fisker as a potential takeover target by another company? There’s a risk in losing corporate identity for sure, but it might be the only thing that may ultimately save their hides.

If the Atlantic is not received well, and an IPO doesn’t go well/isn’t a practical option, Fisker may need some kind of “strategic alliance” with another company, but right now, not at all. Henrik has dreams of being an independent auto maker (akin to BMW) and I guess to some extent he is one now.

If you look at the Karma as a vehicle built to secure funding for the company, it is a tremendous success.

I am very familiar with the internal workings of the company and their financial state, and I can tell you that right now, Fisker has a luxury many do not, they have cash in the bank to not only bridge the gap to their next vehicle, but most likely, enough cash to fully fund it (can’t say for sure without know the hard costs in Delaware).

Where their numbers breakdown (IMO) is in 2015, and 2016. Fisker (as a company) certainly has a little “Volt-mentality” in regards to estimates of demand on the Atlantic pre-release. I don’t think Henrik is an unaware guy, so I’d wager an IPO roadshow in 2014.

That’s interesting. I wouldn’t have imagined that they are, at least in a sense, successful and doing fine. Personally I think the Atlantic is a beauty, and barring any further problem spots, will be a worthy competitor to any other Plug-in out there. The instinct for me is to always compare Fisker to Tesla. And Tesla with their partnership with Toyota seems to be doing well, or as well as a small start-up can be. I could envision a day when Toyota or even Mercedes would plunk the cash on the table and buy Tesla out-right. That would be probably Tesla’s best day and worst day all at once, but it would insure its survival. No more going hat in hand to DOE or investors. A huge player like Toyota could fold a little Tesla into it’s Lexus franchises and barely break a sweat. Your article seems to point to Tesla being in worse financial shape then Fisker. All along, I’ve been thinking it’s the other way around. But your point of Fisker being a better fund raiser than Tesla, seems like a solid argument. Why do you think Fisker is better at getting investors than Tesla? Is it the… Read more »