Can Fisker's Atlantic EV drive it to profits?

After stumbling with the Fisker Karma, Fisker Automotive will need to raise more money and execute flawlessly to bring its luxurious, sporty, and electric sedan to production.

Fisker Automotive CEO Henrik Fisker with the Atlantic sedan, which he said "will go to production."
Fisker Automotive CEO Henrik Fisker with the Atlantic sedan, which he said "will go to production." Sarah Tew

The unveiling of Fisker Automotive's Atlantic model last night proves once again the EV maker can design beautiful cars. But the company's far away from demonstrating it's a healthy business.

The Atlantic extended-range electric vehicle is a luxury, four-door sedan expected to cost about $50,000. Like the sportier and more expensive Fisker Karma, it has bold styling and the high-tech touches of cars in its class. It's also electric, driven by motors and a gas engine that kicks in to keep batteries charged for longer rides.

As a lower-priced car than the $108,000 Karma, the Atlantic (formerly called Project Nina) is a product that could made at larger volume and potentially bring Fisker some much-needed revenue.

But even after taking in more than $1 billion from private sources, Fisker Automotive needs to raise more money to build the Atlantic since a Department of Energy loan was frozen, the CEO told reporters last night.

Once it secures those funds, it can't be slowed by the glitches and delays that marked the roll out of the Karma. While founder Henrik Fisker has shown a great sense for design, the company needs to build its credibility as a manufacturer and viable company, analysts said.

"This is their first high-volume model," AutoPacific analyst Dave Sullivan told Reuters. "They need to have a flawless launch because that's how they're going to end up paying the bills."

Former Chrysler CEO Tom LaSorda, who joined Fisker earlier this year, said yesterday the company intends to choose a location to build the Atlantic this summer. Originally, the company had intended on starting production of the Atlantic this summer, using federal money to retool a former General Motors plant in Delaware

But because Fisker failed to meet certain production milestones, the DOE stopped making loans. The car could be built in another country, depending on the investor, LaSorda said.

Electric luxury
While LaSorda, who replaced founder Henrik Fisker, seeks to get the Atlantic into production, the company is still coping with a series of setbacks around the Karma.

The Fisker Karma was released far later than the company had originally planned and, shortly after the launch, the company needed to recall certain models. During a Consumer Reports test earlier this year, the Karma wouldn't start, requiring replaced batteries. The problem was due to a production glitch with battery supplier A123 Systems.

Reviews of the Karma have been mixed, with auto reviewers lauding the unique styling but saying the hefty weight of the car detracts from its sportiness. The company expects to sell about 4,000 Karmas worldwide this year, LaSorda told reporters.

With the Atlantic, Fisker now has a trimmed-down car and brought the price down to a range where a broader set of consumers can consider it. As an electric vehicle, it will be cheaper to drive, particularly if drivers don't regularly take long trips, and will appeal to people who want to lower their oil consumption.

Higher gas prices may boost demand for electric vehicles in the short term and the Atlantic has plenty of curb appeal. But Fisker will need fire on all cylinders as a business to get its high-end green machine in front of consumers.

 

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