Skip to main content

Reuters: Fisker lost $35,000 on each Karma plug-in hybrid it built

fisker karma motionThe Fisker Karma plug-in hybrid sedan sounded like a dream car. It was supposed to posses the performance, luxury, and style of the world’s finest automobiles, and the economy of its most frugal.

The dream seems to be over. The Karma has been plagued with problems, and so is the company that made it. Having shut down production months ago, Fisker laid off most of its employees and is currently seeking a buyer. Company founder and namesake Henrik Fisker jumped ship in March after a dispute with Fisker Automotive’s Board of Directors.

That sounds pretty bad, but a new report by Reuters shows that things were much worse behind the doors of Fisker’s California headquarters. Delving through the company’s records, Reuters found that Fisker lost at least $35,000 on each of the 2,450 Karmas it built from 2011 to 2012.

Speaking anonymously, a former Fisker executive said the Karma “cost far more to produce than we could ever charge for it.”

That high price was the result of a convoluted development process. In addition to overcoming the obvious complexities of the Karma’s plug-in powertrain, engineers also had to take pains to preserve Henrik Fisker’s original design.

When it became apparent that the Karma’s unorthodox forward-mounted exhaust was hurting power and making too much noise, engineers encased it in a steel box called the “Pizza Box,” which added millions of dollars in development costs.

The need for unusual fixes like this meant Fisker had to ask suppliers to hand build parts, increasing the price of individual components as much as threefold.

Consequently, Fisker was often cash strapped. After the company failed to meet development milestones, the U.S. Department of Energy stopped payments on its $529 million loan to Fisker, a fact that was kept secret from investors for months. The company only saw $192 million of the DOE loan.

No story about a failed company would be complete without some capitalistic excess, and Fisker is no exception. Even as cash dried up and employees were laid off, Henrik Fisker and partner Barny Koehler continued to draw salaries of $600,000 to $700,000 each.

Fisker also threw a pre-race party onboard a 146-foot yacht for the 2011 Monaco Grand Prix. “Guests drank glasses of champagne served with flecks of gold,” the Reuters report said.

The event cost between $80,000 and $100,000 which “wasn’t lavish by auto-marketing standards, but by this point every penny mattered. Within weeks, the Energy Department stopped payments on its loan.”

Fisker is estimated to have lost $1.4 billion total. With a buyer nowhere in sight, the Karma is officially an orphaned car.

Editors' Recommendations

Stephen Edelstein
Stephen is a freelance automotive journalist covering all things cars. He likes anything with four wheels, from classic cars…
Mercedes-AMG GT 73 plug-in hybrid will unleash 805 hp, report says
2019 Mercedes-AMG GT 4-Door Coupe

The Mercedes-AMG GT 4-Door is already pretty fast, but Mercedes may be planning an even faster version. Autocar reports that the GT 4-Door will get a plug-in hybrid powertrain anchored by a twin-turbocharged V8 that makes an impressive 805 horsepower. The British magazine published purported spy photos of this car, expected to be dubbed Mercedes-AMG GT 73 4Matic, undergoing testing. AMG may have other high-performance plug-in hybrids in the pipeline as well.

The plug-in hybrid powertrain could be a production version of the one used in the original GT concept from the 2017 Geneva Motor Show, according to Autocar. That car married a plug-in hybrid system with the 4.0-liter twin-turbocharged V8 used in numerous current Mercedes-AMG models. It also had all-wheel drive (4Matic, in Mercedes speak) so the production version will likely have that, too. Autocar predicts an electric-only range of 31 miles, although that's likely based on the European WLTP testing cycle, not the U.S. EPA cycle.

Read more
Karma Automotive unveils two head-turning concept cars, quicker 2020 Revero GT
Karma SC1 Vision concept



Read more
Boutique carmaker Karma Automotive, legendary design firm Pininfarina team up
Karma Automotive and Pininfarina teaser

Boutique automaker Karma Automotive is teaming up with one of the greatest names in car design for its future luxury cars. During the Automotive News World Congress at the 2019 Detroit Auto Show, Karma CEO Lance Zhou announced a partnership with Pininfarina, the Italian design firm that has likely shaped more of history's best-looking cars than any other.

"Karma is united in spirit with Pininfarina through our shared commitment to stunning design, and we are excited about the reaction we anticipate the end result of our partnership will generate," Zhou said in a statement. The first tangible result of the partnership is a concept car that will be unveiled at the 2019 Shanghai Auto Show in April. Karma will also unveil a second concept car designed in-house, as well as an updated version of its only current production car, the Revero sedan.

Read more