Just What Assets Does Fisker Have to Buy?

by Ronnie Schreiber

Published: October 12th, 2013

just what assets does fisker have to buy

The Fisker Karma’s battery pack and drivetrain, supplied by Quantum Technologies

The Department of Energy today is auctioning off the paper for the $192 million it loaned to Fisker Automotive as part of the Advanced Technology Vehicles Manufacturing loan program. An obvious question is why would anyone want to buy that debt? Many of the press reports about the sale say that by purchasing the debt, a buyer could ultimately gain control of Fisker’s assets including intellectual property, like the extended range hybrid drivetrain and controls thereof. While Fisker may indeed have assets with some value, I’m not sure that anyone’s going to spend at least $30 million, the minimum bid required by the DoE, to be able to duplicate the Fisker Karma’s drivetrain.

I can understand why Bob Lutz, either participating or not with Wanxiang, would want access to the Karma’s design as he’s apparently had no problem selling every LS9 powered Destino, based on the Karma, that he and his business partners have been able to build. Henrik Fisker is a talented designer so it wouldn’t be too surprising if the Fisker Karma survives the Fisker car company. The Karma could become a latter day Graham-Paige Hollywood or Nate Altman era Avanti II. For their part, Wanxiang might prefer that Fisker stays intact and resumes production. Wanxiang already bought battery maker A123, which supplied the Karma, so they have an interest in keeping the startup automaker alive.

Quantum Aggressor, which features a hybrid drivetrain

It’s conceivably possible that if Fisker owned something novel in the way of electric drivetrains or control systems for EVs and hybrids, that might be a way of acquiring the latest EV or hybrid tech on the cheap. Control systems for hybrids are not inexpensive to develop. Seamlessly integrating gasoline engines and electric motors is not easy. At the recent Toyota Hybrid World Tour, the point was made that software was the most expensive part of the Prius’ development. For pure electric vehicles, motor control, regenerative systems and battery management all require complex software to operate properly. To save money on EV development, Toyota itself has a partnership with Tesla, who provide motors and battery packs for the electric version of the RAV4. Still, I have to wonder if Fisker Automotive owns any EV or hybrid technology that’s worth risking $30 million. That’s because Fisker doesn’t own the technology behind the Karma’s drivetrain.

Quantum Aggressor’s “Q Force” drivetrain, note the similarities to the Karma’s “Q-Drive”

Fisker itself doesn’t own much in the way of EV or hybrid technology. Fisker’s “ Q-Drive” serial hybrid drivetrain was developed and exclusively supplied by Fisker partner Quantum Technologies. As a matter of fact, Fisker Automotive came into being as the result of a chance meeting at a Range Rover dealership between Henrik Fisker and Quantum Technologies CEO Alan Niedzwiecki, which led to a lunch for the two men in early 2007. General Motors had just announced the concept for the Chevy Volt, which for the most part operates as a serial hybrid, electric drive plus a range extending on-board gasoline engine to drive a generator to power the electric motors. Quantum had developed a similar drivetrain for the U.S. military. When Henrik Fisker told Niedzwiecki of his plans to design gasoline cars built in China, the Quantum CEO said, “Why don’t you design a car around my drivetrain?” Fisker responded by saying “Let’s start a company!”

Quantum was the exclusive supplier of the Karma’s drivetrain, which uses a GM sourced Ecotec four cylinder gasoline engine to power the car’s generator. A Quantum affiliate also supplied Fisker with the photovoltaic roof on the Karma, that kept the parked car ventilated on sunny days and theoretically could extend range on sunny days by a few miles.

As a result of all of this, it’s unlikely that anyone could put the Karma back into production without the active cooperation of Quantum. It’s also unlikely that anyone is going to risk $30 million to have access to technology that another company owns and controls.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can get a parallax view at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

#AlanNiedzwiecki #Fisker #FiskerKarma #HenrikFisker #QuantumTechnologies

Ronnie Schreiber

Ronnie Schreiber edits Cars In Depth, the original 3D car site.

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Lorenzo on Oct 12, 2013

The "auction" is being conducted like a sale, not a banging gavel event. It was probably started now because the shutdown may be over by the time a winner is announced. We ARE talking about a government-conducted process. Everything I've read stated that Fisker owns design patents, probably on every aspect of the Karma's design so nobody can come up with a look-alike. They probably have a separate set of patents for the design of the Atlantic that was to be built in Delaware, and possibly for several future models. That might possibly be worth $30 million, but that's the minimum bid, and with multiple bidders, the cost of acquiring control of the company is going to be higher than that. The bottom line is Fisker has SOMETHING several bidders want, and the process is going to take awhile before a winning bid is awarded.

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- Morea on Oct 12, 2013
  
  A) Even if the sale is being run by a contractor presumably there is a DoE contracting officer and a contracting officer technical representative overseeing the process. It is surprising (to me) that these are emergency personnel that were not furloughed. B) A goole patent search on "Fisker automotive" turns up "about 528" patents including "Systems and methods of creating sparkle effect in exterior vehicle paint and using glass flake". Some are for technical innovations but it is always hard to tell how valuable they are without being right in the thick of the field (which I am not).
  
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- Lorenzo on Oct 13, 2013
  
  @Morea As with the IRS, the people collecting money never get furloughed, only the people who spend money. Taxes are still being collected, but no refunds are available during the shutdown. So it must be with an "auction" to collect money for Treasury deposit. It won't exactly stave off default, but every little bit helps. Thanks for the research on the patents. That "sparkle effect" is obviously worth a lot to somebody! The U.S. Patent Office isn't the only one in the world, so I wonder if the Karma and Atlantic design concepts are patented elsewhere, like China. In fact, if Fisker has done the bull work for distribution to other countries, that might add to the value of the company.
  
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DC Bruce on Oct 14, 2013

Some missing details here. Is the paper secured, and if so, by what? If it's secured by all of the IP, then someone who buys the paper and forecloses on it gets the IP. Otherwise, I would imagine all of this would get sorted out in a bankruptcy proceeding. Uncle Sam is not, I'm sure, the only person who whom Fisker Automotive owes money. Then there's the question . . . brought up in the original article . . . as to what value there is to the IP that Fisker owns, as opposed to what it had the right to license from Quantum or whomever.

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