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Fisker Raises $1 Billion; Now Its Car Better Be Good

After several delays, production of the $96,850 Fisker Karma plug-in hybrid began at a Finnish factory in late March. But that's somewhat deceiving, because the first cars this summer will be dealer demonstrators, and the company says its very patient customers won't be behind the wheel until June or July. But the prospect of cars -- any cars -- actually rolling off the assembly line has been a big help in Fisker's ongoing fundraising: The company has now raised more than $1 billion, with $190 million of that arriving in the last three months.

Now Fisker just has to deliver a car that accomplishes the voodoo trick of being both a blistering high-performer and super green (a claimed 100 mpg, with low emissions). And it needs to get moving, because cars are still just trickling out of Finland's Valmet (which also builds Porsches).

Eating those words
Founder and CEO Henrik Fisker is no John DeLorean, but he has said some similarly inflated things about building a better auto company that would show a complacent auto industry how to turn out a world-beating design in just a year or two. Fisker had to eat some of those words as the Karma faced years of delays, but all will be forgiven if he delivers a game changer. Since he and Tesla's Elon Musk are bitter rivals (who exchanged lawsuits), he's out to prove he can build a better green car than the all-electric Roadster.

Fisker is still tightly controlling access to the Karma, which is pretty unusual when it's actually reached production. And it's still not disclosing the car's weight, which is an issue because pre-production prototypes tipped the scales at over 5,000 pounds.

It's really fast
With many reservation holders (who paid $5,000) waiting more than two years after the initially promised date for their cars to be delivered, it really has to be good. Fortunately for Fisker, the lucky few who've driven it offer variations on "oh my god it's really fast," though there are complaints about the noisy turbocharged GM-sourced engine that acts as a generator, and heavy steering at low speeds.

Fisker announced a $150 million private equity funding round in February, but the company's most recent securities disclosure adds another $40 million to that. Its haul includes investments from long-time clean-tech supporters Kleiner Perkins (Karma customer Al Gore is a partner) and SeventySix Capital. A123 Systems, Fisker's own battery supplier, put in up to $23 million last year at a time when the company was looking hard for working capital.

All told that's half the money. The other half is a $528 million Department of Energy loan that came with strings attached (it needs to be spent in the U.S., for one thing, and it has to be paid back).

Speeding up the assembly lines
If it's going to achieve the planned 15,000 annual sales, Fisker better start rolling out cars that are 100 percent customer-ready. A generally happy Road & Track reviewer pointed out that the car still has some rough edges, which may explain the go-slow pace in Finland. Fisker spokesman Roger Ormisher told me:

Currently, we are ramping up production at a slow rate to ensure top quality. Demonstrator cars will be shipped to retailers in the May/June timeframe.
The first 80 to 125 cars will go to Fisker's network of 45 dealers, some of whom have long been sitting on finished, but empty, specialized showrooms. "The dealers are very keen to drive it," Ormisher said. No doubt about that.

The Karma looks spectacular, and has a plethora of unusual features, from a rooftop solar panel to interior wood salvaged from lake bottoms. The BBC show Top Gear, which savaged the Tesla Roadster, was largely ecstatic about the Fisker in its magazine, praising its willingness to "play at the absolute limit." That's what the green gearheads -- and Fisker's investors -- want to hear.


Photo: Jim Motavalli
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