Here’s more bad news for Fisker Automotive since Henrik Fisker resigned: Chinese Zhejiang Geely Holding Company has backed out of the bidding to acquire the flailing automomaker.
Typically, money for development comes from a few places, investors, loans, or profits being a few major sources. Fisker Automotive started out with $528 million in loans from the US Department of Energy [DOE], which are pretty much contingent on Fisker turning around and making profits. Profits ultimately go to pay back loans and continue company development.
Fisker’s fallen short in this part of the scheme, and has even had some of its loan money frozen for frivolous spending by the fledgling company. Part of the problem for Fisker Automotive has been the series of recalls, bad press, the loss of $1.6 million in inventory to Hurricane Sandy, among others.
The battery supplier for the flagship Fisker Karma, the now-defunct A123 Systems, was bought by Chinese parts giant Wanxiang. Since A123’s failure, not a single Karma has been built, and of course, this also means upcoming models Surf and Atlantic have also been shelved, perhaps permanently.
Citing some major disagreements, co-founder, former CEO, and executive chairman of the board Henrik Fisker resigned last week. For a while now, Fisker Automotive has been courting investors to get back on track, but this hasn’t attracted as much attention as it deserves. Now, one prospective investor, or perhaps more aptly named buyer, Chinese Zhejiang Geely Holding Company has backed out of the bidding.
Dongfeng Motor Group, also of China, seems to be the only major contender now. Is there not a single American company that can keep Fisker Automotive on its feet, or are all our finest innovators going to be bought out by the Chinese?