Fisker Scores $529 Million Low-Interest Loan From DOE

September 23, 2009

A couple of weeks ago, Fisker gleefully announced fuel efficiency stats for its upcoming extended-range Karma sedan (67 mpg, though the math is a little fuzzy).  Now the upstart automaker has another reason to celebrate: the U.S. Department of Energy has awarded Fisker a $529 million low-interest loan, which will help the company develop the $87,000 Karma and the upcoming Nina, a lower-priced sedan that will ring in around $45,000.

Roughly $169 million of Fisker's loan will be applied toward development of the Fisker Karma. Those funds will go toward the design of tools, equipment for manufacturing, and coordination of materials from U.S. auto suppliers to build the vehicle. The final product should arrive at dealerships by next summer.

The remaining sum -- just under $340 million -- will be applied to the company's Project Nina. Unlike the Karma, which will consist of mostly U.S. parts but be assembled overseas, the extended-range Nina is expected to be manufactured here in the U.S. The hybrid EV will likely appear in showrooms in late 2012, and Fisker currently anticipates a production run of 100,000 vehicles per year. Both models will be distributed via Fisker's network, which so far consists of 45 dealers in 20 states, though the company hopes to increase that number to 100 by 2012.

The DOE's loan to Fisker is slightly larger than the one it gave to Tesla -- a $465 million package intended to facilitate the roll-out of Tesla's own lower-priced sedan, the Model S, which should have a sticker price around $57,000. However, both amounts pale in comparison to the DOE loans given to Ford ($5.9 billion) and Nissan ($1.6 billion) during the first round of funding from the $25 billion program.

It may seem odd for the federal government to offer these low-interest loans to such vastly different programs. After all, Ford's loan will be used to help develop the Ford Focus EV (among other things), and Nissan's is being put toward the development of the Leaf EV at a Nissan facility in Smyrna, Tennessee. Both of those models are expected to be far more affordable than the Tesla Model S, the Fisker Karma, or the Fisker Nina. However, one could aruge that by funding a range of vehicles, the DOE will encourage (a) interest in EVs from a corresponding range of buyers and (b) development of cheaper, more efficient EV technology. Not that we'd never presume to speak for DOE chair Dr. Steven Chu, but he's a smart guy, so we'll give him the benefit of the doubt for now.

For additional details and perspective, check John Voelcker's article at GreenCarReports.

[DetNews]

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