Fisker raises $100 million to fund luxury plug-in business
Production plans and details of the Atlantic, Fisker's second rechargeable model, will be provided by December, the company said Wednesday.
PARIS -- Fisker Automotive Inc., the maker of the $100,000 Karma plug-in hybrid, said it raised more than $100 million from private investors in a recent round of equity financing.
The money will help the company expand overseas sales, overcome quality problems with the Karma sedan and develop a second model.
The fresh equity financing increases the total raised to more than $1.2 billion, the Anaheim, Calif.-based carmaker said.
Co-founder Henrik Fisker said here at the Paris auto show that the company’s overseas expansion is gaining traction in Europe and elsewhere.
About 30 Karmas have already been sold in France, and sales were recently launched in Germany, he said. Sales will begin in Dubai next month and the company will launch in China by year-end, he said.
Production plans and details of the Atlantic, Fisker's second rechargeable model, will be provided by December, the company said.
The additional funding “is another major vote of confidence in Fisker's pioneering technology and business model,” CEO Tony Posawatz said in a statement.
The company announced the funding a day after its $103,000 Karma, which goes about 40 miles on battery power before a gasoline engine propels it, was criticized by Consumer Reports. The magazine didn’t recommend the car, citing its interior design and reliability.
The carmaker has recalled Karmas for flawed lithium ion batteries from A123 Systems Inc. and cooling fans.
Fisker, which was approved for $529 million in U.S. Energy Department loans in 2009 to develop and build its vehicles, also has to work out an agreement with federal officials after being cut off from one of its loans last year.
A plan to use those funds to make a second model at a closed General Motors plant in Wilmington, Del., has been stalled since February.
In the Paris interview, Henrik Fisker said the company is paying interest on the $193 million it borrowed from U.S. taxpayers before the federal government in February barred Fisker from accessing the rest of its $529 million credit line.
“We are already paying interest back and we’ll start paying it back full next year,” Fisker said on the sidelines of the Paris show.
Cash flow has been tight, and more than 50 employees were laid-off from March through August. In August, Fisker tapped Posawatz, the former chief engineer of the Chevrolet Volt, as its CEO, replacing former CEO and ex-Chrysler boss Tom LaSorda, who stepped down after less than six months at the helm of Fisker.
Henrik Fisker said some of the $100 million will help get the Atlantic closer to production, but he declined to elaborate. He also declined to estimate how many Karmas the company will sell this year, but said more than 1,500 units have been delivered to retail customers in the United States and abroad.
Fisker also declined to say when the startup automaker will become profitable.
“We know it internally but we don’t want to go out and announce it,” he said.
The company’s statement on Wednesday didn't list the equity investors. Venture capital firms such as Kleiner Perkins Caufield & Byers and Palo Alto Investors have backed the company, and in July it said actor Leonardo DiCaprio, a Karma owner, had invested in the company and would help promote the vehicle.
-- Bloomberg contributed to this report.
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