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Electric hybrid fizzles, burns before going bankrupt

Murvin Perry • Jul 15, 2013 at 9:03 AM

Fisker Automotive, maker of the much acclaimed Fisker Karma plug-in hybrid electric sedan, has filed for bankruptcy after spending $1.5 billion, $193 million of it being part of a half-billion dollar green energy credit line loan from the U.S. Department of Energy. Analysts calculated the company spent $660,000 for each of the approximately 2,500 cars it produced during its less than five year run. Fisker Automotive, based in Anaheim, Calif., was founded on Sept. 5, 2007. The Karma was revealed at the 2008 North American International Auto Show in Detroit. Arrangements were made for Valmet Automotive in Uusikaupunki, Finland, to produce the cars in the fall of 2008; the first delivery of cars was delayed until July 2011.The May 2011 issue of Car and Driver gushed, “Three years and a billion investment dollars after the Fisker Karma rolled forth as a stunning plug-in hybrid concept, it is finally ready to rock as a stunning production car — all in less time (and for far less money) than GM needed to produce the Chevy Volt. (The comparative investment and time figures were not documented.) The Fisker Karma was listed among the Green Design 100 of 2009 by Time magazine. Also, Time listed the Karma among The 50 Best Inventions of 2011. In November 2011, the Fisker Karma won Automobile Magazine’s 2012 Design of the Year Award. In December 2011, Karma was chosen as Luxury Car of The Year by Top Gear Magazine, and Car of The Year by James May of “Top Gear.” One of the claims made for the Karma at its introduction was “sustainability” referring primarily to the fact that in electric mode it used no petroleum products. The company boasted it was environmentally friendly because it used recycled wood for interior trim and less than perfect leather hides for upholstery. Reliability suffered. The 2,000 or so cars produced were plagued by defects and bad luck — fires in the battery pack and shorts in electrical circuits were blamed on coolant leaks and a misaligned welding robot at the factory. Replacements cost the company more than $55 million. On March 7, 2012, a Fisker Karma purchased for $107,850 by Consumer Reports magazine was taken for a test drive at the CR test track facility in Connecticut. While performing a routine speedometer calibration check prior to actual road testing, the car broke down and could not be restarted. Fisker had other troubles. On April 14, 2008, Tesla Motors filed a lawsuit against Fisker Automotive, alleging that Henrik Fisker stole Tesla’s Model S hybrid technology and was using it to develop the Karma. The court ruled for Fisker and ordered Tesla to pay $1,144,285 for court costs and lawyer fees. Some cars caught fire. A Fisker Karma was involved in a home fire that also burned two other cars in Texas in May 2012. The chief fire investigator said the Karma was the origin of the fire that spread to the house, but the exact cause is still unknown. The car was not plugged in when the fire started and it was reported that the Karma’s battery was intact. A second fire incident took place in August 2012 when a Karma caught fire while stopped at a parking lot in Woodside, Calif. The investigation conducted by Fisker engineers and an independent fire expert concluded the cause of the fire was a cooling fan at the front of the car. An internal fault was blamed. Fisker announced a recall to repair the faulty cooling fan unit. In separate incidents during the storm and flooding caused by Hurricane Sandy on the night of Oct. 29, 2012, 16 Karmas and one Toyota Prius Plug-in Hybrid caught fire while being parked at Port Newark-Elizabeth Marine Terminal. The vehicles were partially submerged by flash floods caused by the hurricane. An investigation concluded that corrosion from salt caused a short circuit in the control unit. Fisker reported a loss of around 330 additional Karmas when an entire shipment from Europe was flooded in the port terminal. The estimated value of the flood loss was in excess of $30 million.The half-billion EPA loan was frozen in February 2012, because the company was failing to meet preliminary goals. Should the name have been spelled Fizzzz-car? The public has been slow to accept the totally electric vehicle. Despite a government subsidy of a $7,500 tax credit for each vehicle, dealers last year sold only 12,000 of the purely electric, plug-in type of vehicles, far short of President Obama’s goal of putting a million plug-in vehicles on the road by 2015. Is it realistic to expect consumers to pay $40,000 to more than $100,000 for a car that will save pennies per gallon on gasoline, but be severely limited in convenience of range of operation? Murvin Perry of Johnson City is a retired journalism professor.

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