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3 Thoughts on the Fisker Debacle

The views expressed are those of the author and are not necessarily those of Scientific American.

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electric carOn April 24, executives from the grievously wounded plug-in-hybrid firm Fisker Automotive will face a House of Representatives oversight committee. The question of the day: Why did the Department of Energy loan nearly $200 million to a company that is now facing bankruptcy? (Secondary purpose: to allow grandstanding congressmen to repeat, as many times as possible, the phrase “Solyndra on Wheels.”)

I was on the showroom floor at the 2008 Detroit auto show when Fisker pulled the cloth off the concept version of its Karma sedan. I’m a strong supporter of government funding for clean energy research and deployment. Yet for years, I’ve wondered why anyone, public or private, would put money into Fisker Automotive. Maybe tomorrow’s hearing will help us understand the Department of Energy’s motivation. More likely, it’ll simply yield a lot of demagoguing. Either way, we’ll have a reporter on the scene to find out, so check this space. In the meantime, three quick thoughts about the Fisker drama:

1. Plenty of people have seen this disaster coming for years.
I’m frankly astonished it has taken this long for Fisker to unravel. The red flags began appearing almost immediately after Fisker unveiled the concept version of the Karma in 2008. One month after the car’s debut, Henrik Fisker’s former employer, Elon Musk at Tesla Automotive, sued him for fraud, breach of contract, and theft of trade secrets. Tesla lost the case, but the warning signs kept appearing. The company churned through three battery suppliers in three years. As PrivCo notes in this amazing timeline, Fisker established a pattern of awarding supply contracts “not necessarily to the best supplier, or the supplier who offers the best price…but rather to companies that were owners and investors in Fisker.” For a full account of Fisker’s stumbles, see Katie Fehrenbacher’s excellent piece at GigaOm.

As the years rolled by, Fisker observers became increasingly suspicious that the company didn’t even possess a working car. At the 2008 debut, Fisker announced that the Karma would go on sale in late 2009. Yet by early 2010, when Bill Gifford profiled the company for Popular Science, no one but the chauffeur for the Crown Prince of Denmark had driven even an early prototype. (By contrast, General Motors, in an effort to prove that the Chevy Volt project was real, was giving just about anyone who would ask rides in prototypes of all stages).

The delays, the secrecy, and the general sketchiness surrounding the company alienated plenty of potential industry allies and electric-vehicle advocates. None of this would matter much if Fisker had finally emerged from the garage with a fantastic car. But….

2. Fisker Automotive’s sole product—the Karma plug-in hybrid—is not a good car.
That’s putting it politely. Almost as soon as Karmas hit the road, some of them started catching on fire. Last September, Consumer Reports gave the car a “failing grade.” The $107,850 test model died on the track; Fisker hauled it away on a flatbed truck. “We buy about 80 cars a year,” Tom Mutchler wrote on the Consumer Reports web site, “and this is the first time in memory that we have had a car that is undriveable before it has finished our check-in process.”

For sake of argument, let’s assume there were no huge technical glitches, no catastrophic failures. Even then the car falls short. For one, this eco-car isn’t particularly efficient. By the EPA’s calculations, the Karma gets 32 miles of electric-only driving range; in that mode, it averages 52 mpge (miles per gallon equivalent). Once the battery is depleted and the gas engine kicks in, fuel economy plummets to 20 mpg. The Chevy Volt is a small sedan, not a luxury barge, so it’s not really a Karma competitor, but because it uses the same type of series-hybrid drivetrain, it’s a useful point of contrast. The Volt gets 98 mpge running on electricity, 37 mpg running on gas.

Disappointing fuel economy aside, the Karma is cramped inside, with so little interior space that the EPA actually classified the enormous sedan as a “subcompact” car. And at 5,300 pounds, the car is leaden. Cutting weight down is critical for a plug-in hybrid, because every additional pound saps that much more driving range from the battery. Yet it’s entirely possible to find an armored Benz that weighs less than the Karma. Last year, Fisker brought a few finished cars to town for journalists to take on a spin through Manhattan. Rolling through Times Square, the Karma felt more like a Lenco Bearcat than a hyperefficient car of the future.

3. The sad tale of Fisker portends little or nothing for the future of electric and hybrid vehicles.
At the New Yorker, James Surowiecki has a smart analysis of Fisker’s downfall under the headline “What Killed the New Electric Car?” The headline is an irresistible reference to Chris Paine’s 2006 documentary, about the rise and fall of the General Motors EV1. The thing is, the Fisker Karma isn’t representative of the New Electric Car, and it would be a shame if people began to think so.

As in any product category, there are good specimens and bad ones. The Chevy Volt, the Nissan Leaf, and the Tesla Model S are all quick, quiet, well-engineered, technically sophisticated vehicles that point the way toward the future of the auto industry—a future in which drivers can choose what fuel they want to rely on for transportation. The Fisker Karma is just kind of a dud.

Ultimately, the Fisker debacle, by itself, isn’t enough forestall the electrification of the automobile. The important variables are the price of oil and the cost of batteries. The big carmakers—the ones with the scale and the power to move the market—have all realized that they need to learn how to build cars that run on something other than gasoline. Most of them are moving very slowly. But if oil prices spike again, or carbon pollution is finally assigned a price, they’ll start moving much faster, and the story of Fisker Automotive will become a half-forgotten cautionary tale.

Image courtesy of or IFCAR, via WikiMedia Commons

Seth Fletcher About the Author: Seth Fletcher is a senior editor. Follow on Twitter @seth_fletcher.

The views expressed are those of the author and are not necessarily those of Scientific American.

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  1. 1. truittjs 10:02 pm 04/23/2013

    Really, you say “I’m a strong supporter of government funding for clean energy research and deployment. Yet for years, I’ve wondered why anyone, public or private, would put money into Fisker Automotive.”. Did you miss the part about Delaware losing GM and having a big empty plant which Fisker promised to turn into a job machine for the state. Oh yeah and this happens to be our Vice President’s state. I’m sure that’s just a coincident and had nothing to do with the Energy Department handing them all that money, ya think?

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  2. 2. syzygyygyzys 5:49 am 04/24/2013

    Red flags went up with the design concept of this car for anyone with business or technical competence. When people, who approve taxpayer backed loans, have neither business nor technical competence, this is what you get. Putting the money on Red in Vegas is a better bet. If those with more money than sense want to invest private money in these projects, I wish them the best.

    Samuel Taylor Coleridge coined the term “willing suspension of disbelief” a couple of hundred years ago. (Someone else’s speech writers may have used it more recently.) Anyway, it amazes me how that concept comes into play when electric cars are touted as “green”. Coal power accounts for 42% of electricity generated in this country. Until that changes, these are substantially coal-fired cars and overwhelmingly fossil-fueled cars. As long as people understand that, it’s peachy keen with me. Just quit trying to tell me how “green” they are. “Will no one hear these stifled groans and wake me?”

    High mileage hybrids that pay their own way are just swell, dandy and spiffy.

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  3. 3. Carlyle 6:20 am 04/24/2013

    A drop in the bucket compared to the tens of billions spent on alternative energy schemes that never deliver what they promise. who gets held to account when extravagant projections are made, government funding is provided & even if something gets built.

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  4. 4. Carlyle 6:24 am 04/24/2013

    Sorry. Posted the above accidentally & incomplete.
    A drop in the bucket compared to the tens of billions spent on alternative energy schemes that never deliver what they promise. Who gets held to account when extravagant projections are made, government funding is provided & even if something gets built it performs at a fraction of its supposed potential?

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  5. 5. Denswei 9:38 am 04/24/2013

    Also a drop in the bucket compared to the many, many billions of tax dollars spent on subsidizing & propping up conventional fuels. Not only direct investments like R&D to create the nuclear industry, but a large part of the US military to defend oil supplies, public–not corporate–liability for nuclear accidents, etc.

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  6. 6. Denswei 9:44 am 04/24/2013

    Carlyle raises a good point: when is someone going to held accountable for the sorry performance of nuclear power, after so many promises of cheap, clean energy to get $billions (possibly a $trillion by now) of government subsidies into research, construction, etc.
    When is someone going to be held accountable for the $1-2 trillion cost of invading Iraq? I remember well the promises that the invasion would pay for itself in oil.

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  7. 7. N a g n o s t i c 9:55 am 04/24/2013

    Skyrocketing labor, medical and education costs, the housing bubble, green energy companies such as Solyndra and Fisker… admittedly I’m mixing in examples already corrected by the market (not government), but the common denominator is clear – political involvement by vote-buying officials.

    We prescribe ourselves – through our all too accommodating representatives – treatments of egalitarianism and fairness which ultimately leave us in worse shape, blaming the wealthy for this result because they only pay 83% instead of %100 of federal income tax revenue… or corn subsidies.

    If there’s a better product or way to accomplish something, people in general and businesses in particular are usually bright enough to offer their recognition and put money in it. No ideology, other than the belief in making a buck or doing and paying for what you think is best for yourself is required – as long as theft isn’t involved. I consider environmental degradation a form of theft, so don’t think I’m going laissez-faire on you, except for the length and rambling nature of this comment.

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  8. 8. N a g n o s t i c 10:00 am 04/24/2013

    Denswei, is someone to be held accountable for US means-tested welfare program costs since 1964 equalling 3 times what we’ve spent on all our wars, going back to 1776?

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  9. 9. methos1999 10:17 am 04/24/2013

    Ok, first let me say I am no fan of Fisker or the Karma, as I know a little bit about the technology used in it and have ridden in it. That being said, to those of you who continuously complain about the government money being spent on such companies – what are your thoughts on the 100s of billions that have been spent on oil subsidies over the decades? If you’re going to complain about how the government spends money, why not start there? Given the enormous profits oil companies enjoy, why are we subsidizing them to the point that the losses on Fisker & Solyndra look like pennies in comparison?

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  10. 10. syzygyygyzys 10:26 am 04/24/2013

    Government shouldn’t subsidize anything.

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  11. 11. TheBartBarton 12:49 pm 04/24/2013

    All subjective opinion on your part Seth. You fail to grasp the entire picture. You’re trying to come out looking like you have all the answers, after the fact. And this is freakin’ Scientific American, not Autoweek or Politics Today, give me a break, I read this pub for Science, not some clown with an ‘I told ya so’ article on a car. Blag off dude.

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  12. 12. syzygyygyzys 1:42 pm 04/24/2013

    I don’t know what “Blag off” means, but it sounds uncomfortable. Other bloggers would tell you that I’m not shy about criticizing them, but I thought this blog post was written objectively. There seemed to be some sadness that it didn’t go well and that some would complain about the waste of taxpayer money. Since they aren’t getting rich maintaining this site, can’t we allow them to express a little personal opinion?

    Blag off unto others as you would have them Blag off unto you.

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  13. 13. sinz58 2:35 pm 04/24/2013

    Some here have asked about subsidies to the oil industry.

    To begin with, oil subsidies are much smaller relative to the size of the industry than the subsidies to the “green” industries are. If all oil subsidies ended overnight, the oil industry would survive (though the price of gasoline and heating oil would rise). If all government subsidies to the “green” industries ended overnight, the “green” industries would collapse.

    Secondly, these “green” companies were betting on an even bigger subsidy: The hamstringing of their fossil fuel competition by cap-and-trade. Solar and wind power simply cannot compete on a large scale against natural gas unless the Government hamstrings or even destroys the natural gas industry.

    Thirdly, at least those oil subsidies have produced products that actually work. Here in New England where I live, I have a wide choice of gasoline-powered SUVs that can cope with the severe snowstorms we tend to get. Filling stations are everywhere. No homeowner has to worry about availability of heating oil or natural gas. (We haven’t had severe shortages of those since Jimmy Carter was President.)

    In contrast, electric-powered cars are virtually unusable by tens of millions of folks like me, since I don’t live in a house with a garage. How am I supposed to recharge an electric car, with a 200 foot long extension cord coming out of my apartment???

    I don’t like Government subsidies generally. But at least the subsidies to the oil industry have produced a winner that is nationally scalable and ubiquitous. The subsidies to the electric car industry have produced nothing so far except a very few cars for a very few people.

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  14. 14. Carlyle 5:09 pm 04/24/2013

    The vast majority of so called subsidies to the oil industry are in fact tax concessions to encourage new or difficult developments. Not grants. Unlike the special treatment given to alternatives, oil companies & consumers pay massive taxes on oil & oil products.

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  15. 15. lindylopper 6:28 pm 04/24/2013

    This is another pathetic rehash of the Consumer Reports criticisms, which were mis-comparisons with the typical cars Consumer Reports reviewed– they know nothing about and never previously reviewed the luxury supercar market where the Karma stands uniquely. What comparable super car has significantly more interior space than the Karma? It has exactly the same visibility constraints, small trunk space, and quite a bit better rear seat room than an Aston Martin DB9 or Rapide. Same for Maseratis. Obviously it’s not competitive with a Prius or minivan.

    The Karma is a great car gives me a super comfy electric commute with the carbon efficiency of a Prius and style of a DB9. No other car on the road can do that! The owners looking for that love it! Obviously if you don’t make a big enough salary to imagine buying one it will seem stupid to you but then so probably will a Lamborghini. After the initial round of fixes last summer, it’s also been highly reliable for the owners.

    I’m SO sick of reading the same trash written about the Karma when you journalists are obviously too much a bunch of groupies to drive one every day and form an original, up to date opinion.

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  16. 16. syzygyygyzys 8:36 pm 04/24/2013

    Uh lindylopper,

    It’s already gone.

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  17. 17. Sisko 11:19 am 04/25/2013

    If government invests in specific companies it influences the market in many ways and should expect many business failures and a few successes. Government is a poor judge of evaluating whether a specific company will be successful on a long term basis. Venture capitalists perform that function much better. Government involvement skews the marketplace and may actually slow the deployment of new technologies by putting investment in poorly managed ventures and thereby discouraging venture capital from wishing to invest in alternative companies.

    Government should help industry by investing in basic research that may over a long term basis lead to new technologies being deployed to the advantage of their citizens. Government should not be investing in specific companies in an attempt to deploy a favored technology more rapidly. The process change was something implemented by the Obama administration and it is a very poor policy.

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  18. 18. joepoppa 7:39 pm 04/25/2013

    The way I see it, there are two possibilities, here. Either someone with knee pads and a round mouth made someone at the EPA very very happy, or someone similarly equipped at the EPA wanted to make Biden just as happy. That’s the way government is run. It’s not their money, so WTF? What do they care?

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  19. 19. Moneta 2:52 pm 04/26/2013

    Great discussion, and it’s remained fairly civil. Bottom line: the market takes care of all of this. An idea needs to hold its own on practicality, affordability, consumer demand, and be ecologically safe to make it economically viable. This process, by definition, excludes governmental intervention. Considering the robust economies the fossil energy companies fuel, I would say any subsidies are a pittance. The research I’ve done on the subject of subsides pretty much coincides with previous comments by the informed. There are NO payments to the companies. Most of it is spent on our military services, primarily the US Navy, to protect the sea lane delivery routes. I’d love to have an electric car, and power my home largely with solar cells. Any public money spent on “Green” schemes should be concentrated in research, primarily BATTERY/Energy Storage developments. These are clearly the weak link. Subsidies yield the rate of return taxpayers saw in the ‘A123′ fiasco. We’ll probably get there eventually but in the mean-time we have plenty of fossil fuels to support our lavish lifestyles.

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  20. 20. Quinn the Eskimo 9:47 pm 05/12/2013

    Government should not be allowed to invest in any private corporation. By definition; Tax Dollars infer zero risk. So no accountability.

    Has any Department of Energy or Transportation executive been fired? Ever???

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