Fisker Automotive money woes complicate hybrid Karma, Nina development

Fisker Automotive in Fall 2009 was granted a $528 million low-interest loan by the Department of Energy for development and production of next generation plug-in hybrids, the Fisker Karma and Nina.

One requirement for the massive funding was that Fisker meet certain deadlines, or milestones, for production of the Karma sedan. When those deadlines were not met, the DOE required modification of the loan terms to incorporate new deadlines for the company's second car, the Nina.

Meanwhile, Fisker had to layoff some its workforce as reworking of the loan takes place between the hybrid carmaker and the DOE. Twenty-six people at the Delaware plant and a number of contract engineers at Fisker headquarters located in Anaheim, California, were cut from the workforce. Fisker Automotive said some of the engineering staff reductions in Anaheim were already planned to occur in between development of the Karma and Nina.

Fisker Automotive's headquarters employee count had soared from 150 in 2010 to about 650. Another 100 employees are prepping the Delaware plant to start pilot production of the Project Nina sedan.

Bringing the Karma to market has been arduous. Henrik Fisker blames delays in government emissions and crash certification in various markets. He said there are no production problems at contract manufacturer Valmet Automotive Inc. in Finland. The most notable hiccup was the holdup in financing in 2009 after the global economic collapse, which delayed the company's plans by nearly a year.

To date, Fisker has used $193 million of the $529 million government loan, mostly for the Karma. The renegotiations are for the remaining $336 million, which will go toward the Nina.

The Nina family car will be smaller than the Karma, sized between an Audi A4 and A6, or a Mercedes C-class and E-class. Design work on the Nina is signed off and a BMW 4-cylinder engine was chosen as the range-extending engine. No other details are available because Fisker wants to keep launch of the Karma as the main focus until the Nina is close to launching.

In the meantime, Fisker Automotive continues to pursue non-government funding, having raised more than $850 million. The company is also forging ahead toward its main goals: delivering 2,500 ordered Karma sedans by the end of the second quarter 2012, then starting prototype production of the Nina in Wilmington, Delaware, in the second half of 2012.