Fisker Automotive, maker of the Karma luxury plug-in hybrid, may have found a way out of its recent financial problems. According to Bloomberg, the company has raised $100 million from private sources to fix quality issues with the Karma and finish development on a second model, the Atlantic.
Fisker CEO Tony Posawatz called the influx of funds “another major vote of confidence in Fisker’s pioneering technology and business model,” and said details on the Atlantic’s launch will be announced by December.
The $100 million will provide Fisker with most of the cash it needs to finish work on the Atlantic; the company previously said it needed $150 million to get the car ready for sale. The Atlantic will need more funding because, unlike the Karma, Fisker will be building the car itself, possibly at an ex-General Motors plant in Delaware.
Fisker has raised $1.2 billion in capital, but has otherwise had a rough year. In August, it recalled all 1,900 Karmas after a cooling fan set one on fire in a California parking lot, the second time this year that a Karma caught fire.
Fisker also had issues with battery supplier A123 Systems. An improperly-placed hose clamp led to a recall of 247 cars earlier this year, and other faulty components caused embarrassment when a Karma owned by Consumer Reports died during testing.
Consequently, Fisker needs full coffers to continue ironing out any wrinkles in the Karma and to launch the Atlantic, which will give the company a larger pool of potential customers.
The Atlantic will keep the Karma’s gorgeous looks and “EV-ER” plug-in powertrain, but it will be smaller and will sell at a lower price point. A Karma costs around $100,000, but the Atlantic will probably be in the $50,000 range, competing with the Audi A5 and base Tesla Model S.
As the intense competition between Audi, BMW, and Mercedes-Benz attests, there are plenty of people willing to spend $50,000 on a luxury car, while the $100,000 range is more rarefied territory.
This fundraising windfall is the first good news to come out of Fisker in months, and that’s really good news for anyone who wants a car that is both luxurious and green.
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