U.S. Dept. of Energy to Auction Off Fisker Loan

TTAC Staff
by TTAC Staff

The United States Department of Energy has announced on its website that it will auction off the loan that it made to Fisker Automotive, a loan for which the hybrid luxury startup carmaker only repaid a small fraction of the principal. Peter Davidson, the executive director of the department’s Loan Program Office, told Automotive News that the DOE decided to auction off the loan, “after exhausting any realistic possibility for a sale that might have protected our entire investment.”

Fisker originally won a $529 million loan guarantee from the DOE’s Advanced Technology Vehicles Manufacturing Loan Program in September 2009, from which it drew down $192 million before defaulting. After the Energy department ruled that Fisker was not complying with terms of the loan, missing important deadlines and struggling to make its payments on the loan, it froze the rest of Fisker’s credit line in May 2011. Less than $21 million of the $192 million was repaid.

Fisker built about 2,450 Karmas and according to Reuters it lost $35,000 or more on every one of the $100,000+ extended range hybrid cars. Company founder Henrik Fisker resigned in March 2013 citing differences with management. Soon after that, Fisker Automotive defaulted on its government loan and hired bankruptcy advisors. All but a few FiskerAutomotive employees were laid off this spring.

The Fisker Automotive brand and rights to produce the Karma have attracted a number of potential buyers including Fritz Nols AG, a German investor group lead by Ingo Voigt. According to the Autobild magazine, Fritz Nols has offered $25 million for Fisker. In a Facebook post last week, Voigt said that his group had submitted a “detailed offer including a signed [letter of intent] and a short presentation of our restructuring plan” to the DOE. Chinese auto parts maker Wanxiang Group and a Hong Kong investment group have also expressed interest.

Bids on the remaining $168 million in Fisker’s outstanding debt are due by Oct. 7. The auction will take place Oct. 11. Davidson said that the DOE “will require all bids to include a commitment and business plan that promotes domestic manufacturing capabilities and related engineering for advanced technology vehicles here in the United States.”

Fisker Automotive had no comment.

TTAC Staff
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  • One of my friend's sisters bought a White Fisker Karma. I was initially excited to drive them when they were released, but the excitement quickly fades when you realize they are overly stylized, ridiculously-expensive, small-interior sports cars. The one thing I'll give the Karma is that it has the range extending gas engine. Tesla feels they don't need one. I and other people who won't buy one because of the range limitations think otherwise. When GM gets the ELR on the lots, I'm sure it will do well, but the way I see it: the premium costs of buying an EV make it less economical than buying a similarly sized I.C.E vehicle and spending the difference on fuel and maintenance. An Impala, a Cadenza, a 300, a Charger, a Genesis, an E-class, a 5-series, an Audi A5, and a whole list of other cars are completely more economical than the Karma or the Model S. You buy these cars because they are flavor-of-the-month cool.

    • Kyree Kyree on Sep 18, 2013

      I think that Tesla is doing good by not tying itself down with range-extending engines. They would be crutches that would probably cause the company to get lazy and not bother with further innovation order to extend the batteries' range further. As nice as the plug-in Chevy Volt is, it ends up being not worth much more than a Cruze once those 40-odd electric miles are up. As long as Tesla stays ahead of the EV curve (and increases its profit margins), it will be fine. But yes, I do agree with you that a lot of what sells these cars is their novelty. I'm starting to see a lot more Model-S's in my state--which is pretty much at the center of the US and which will probably be one of the last states to fully accommodate EVs.

  • Arun Arun on Sep 18, 2013

    Can someone please explain in layman terms how auctioning off a loan works and what are the incentives for the buyer of the loan? It is a loan on which I will never get any payment-so why would I want to buy it? (I am assuming this is not buying Fisker itself but the $181 million that Fisker didn't pay back..)

    • See 7 previous
    • SCE to AUX SCE to AUX on Sep 19, 2013

      @Lorenzo Oh, I get that, and it's a fool's dream. Fisker has so much wrong with it that cannot be salvaged. Think Costa Concordia.

  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
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