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.

Recommended Videos

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.

Stephen Edelstein
Stephen is a freelance automotive journalist covering all things cars. He likes anything with four wheels, from classic cars…
Cheaper EVs ahead? GM and LG say new battery cells are the key
2025 Chevrolet Equinox EV front quarter view.

General Motors and LG Energy Solution have announced a new phase in their ongoing partnership: developing a new battery cell chemistry that could significantly lower the cost of electric vehicles. The joint effort centers on lithium manganese iron phosphate (LMFP) battery cells, a variation of lithium iron phosphate (LFP) that’s gaining popularity for being more affordable and less reliant on expensive materials like nickel and cobalt.

This is a big deal because battery costs are still the single largest expense in producing EVs. According to GM and industry experts, LMFP cells could help bring the cost of electric vehicles close to — or even on par with — gas-powered cars. The goal? Making EVs accessible to a broader range of drivers without sacrificing range or performance.

Read more
Waymo recalled 1,200 robotaxis following collisions with road barriers
Waymo Jaguar I-Pace

Waymo’s autonomous-car technology has made great advances over the years to the point where it’s now allowed to offer paid robotaxi rides in select locations in the U.S.

But the development of the technology is ongoing, and the robotaxi rides continue to gather valuable data for Waymo engineers to pore over as they further refine the driverless system to make it as reliable and efficient as possible. Which is why glitches will sometimes occur.

Read more
Apple CarPlay Ultra looks stunning in Aston Martin supercar debut
Apple CarPlay Ultra

Apple CarPlay Ultra is the next generation of the Cupertino, California-based firm's smartphone projection system for your car, and it's available in new vehicles in the US and Canada.

When we say "new cars", your options are very much limited to one brand... Aston Martin. So you'll need deep pockets if you want to experience CarPlay Ultra for yourself.

Read more