Fisker Automotive Inc. is tempering expectations among its investors as it continues to raise money for its bid to bring a more affordable luxury sedan to market.
The cautious shift could be seen last week, when Fisker Chief Executive Tony Posawatz told investors that the Anaheim-based automaker’s planned Atlantic model may not be available until 2015. Fisker’s first model is the Karma, a luxury hybrid sports car that sells for around $103,000. The Atlantic is expected to start at about half that price in a bid for a broader customer base.
Word of a possible delay on the Atlantic indicated that Posawatz—a Chevrolet veteran who took the helm at Fisker in August—is taking a realistic approach on expectations for the company. Fisker now appears set on promising less and striving to exceed expectations when it comes to production schedules going forward.
That’s a switch for the automaker, which benefited from a lot of hype at its outset, and has raised more than $1.2 billion in private investment to go with a $193 million borrowed from the U.S. Department of Energy.
Founder Henrik Fisker told the Business Journal in January he was confident the company would sell some 12,000 cars this year, zooming from startup to $1.2 billion in sales during its first 12 months in full production.
Fisker was already late in getting to market with the Karma by then, and it has sold only 1,500 vehicles to date. The company has had other stumbles since its founder’s initial sales projection, ranging from a hold-up on more than $300 million of its federal loan to recalls of the batteries in the Karma.
Fisker originally said it would begin producing the Atlantic by the end of this year and start sales sometime in 2013. The company got tight-lipped on production timetables and sales projections—both for the Karma and the Atlantic—after missing production and sales milestones laid out by the Department of Energy.
Internal company documents leaked to media outlets in May pushed production of the Atlantic to 2014.
The recent word from Posawatz about a possible 2015 start resets the outlook on the Atlantic and comes as the automaker seeks to raise more money for the vehicle’s launch.
Fisker had planned production of the Atlantic model at a former General Motors Co. plant in Delaware it purchased for $18 million, but the loan freeze has temporarily curtailed those plans.
Fisker plans to release some detailed information on the Atlantic production before the end of the year, said Roger Ormisher, the automaker’s global communications director.
The hybrid four-cylinder will have four seats, and a longer wheelbase and more trunk space than the Karma. The Atlantic is expected to sell for about $50,000 and is widely seen as a make or break model for Fisker and a bellwether for the electric-car industry.
According to company documents, the car will compete against the BMW 3 and 5 series, Mercedes C and E class, Jaguar XF and Audi S4/A6.
Supplier’s BK
The latest developments came in the wake of a bankruptcy reorganization filed early last week by Fisker battery supplier A123 Systems Inc.
The Waltham, Mass.-based company has a deal with Johnson Controls Inc. in Milwaukee to sell its automotive assets, including technology, products, customer contracts, plants in Livonia and Romulus, Mich., manufacturing facilities in China and equity interest in Shanghai Advanced Traction Battery Systems Co., its joint venture with Shanghai Automotive.
The transaction is valued at $125 million.
Johnson Controls, which sees annual revenue of $40.8 billion and a market value of more than $18 billion, could bring Fisker more credibility in the often-knocked clean technology sector.
“It’s an established global supplier and adds confidence,” Ormisher said.
Johnson Controls has supplied Fisker with 12-volt batteries that power windows and other electronics for the Karma since it went into production last year.
The vehicle parts maker is expected to take over lithium-ion battery production from A123, which received a $72.5 million commitment from Johnson Controls to continue operations during the sales process.
Fisker was A123’s largest customer in 2011, accounting for 26% of its $159 million in sales, according to the bankruptcy filing. That’s roughly $41.3 million in orders.
The reorganization was prompted by cash shortages, an inventory of defective products and a flurry of negative press for A123, which has receive about $140 million in federal grants and loans.
