In a somewhat unexpected move, the U.S. Department of Energy has granted luxury plug-in hybrid-electric car maker Fisker Automotive a $528.7 million conditional loan to finance the development of two different car models. As part of the stimulus package, the money — announced today by Energy Secretary Steven Chu — could help Fisker create up to 5,000 jobs — it also beats out $465 million in loans the DOE gave to the company’s primary competitor, Tesla Motors, several months ago.
All of a sudden, that story about Fisker hitting profitability by 2011 makes more sense. Last week, the company announced that it would sell 15,000 cars between now and then, which sounded a little fishy at the time, considering that Tesla has delivered a little over 700 of its roadsters.
The company plans to use $169.3 million of the loan to put the finishing touches on the Karma and devise efficient manufacturing procedures to turn out enough models to fill showrooms next summer. Even though it is based in Irvine, Calif., Fisker will sink that money into its Pontiac, Mich. facility where more assembly is slated to take place — this is a boon for the state, desperately seeking new avenues for local investment and employment to replace the automotive old guard in and around Detroit.
After this stage gets going, the other $359.4 million will be used for what Fisker has dubbed “Project Nina” — the roll out of 75,000 to 100,000 plug-in electric-hybrids on an annual basis starting in 2012. All of these cars will be powered by a combination of lithium-ion batteries and gasoline engine. The company says the car’s range in electric mode will be longer than most people drive in a day. Using both sources of power, its range is about 300 miles.
The loan was granted specifically via the DOE’s Advanced Technology Vehicles Manufacturing program — an initiative driving toward the goal of putting 1 million plug-in hybrid vehicles on U.S. roads by 2015. Fisker’s emphasis on using mostly U.S. components and equipment also probably made it a more appealing choice for government support. Still, how it managed to score more backing than Tesla is unclear. It could come down to the fact that Tesla only needed $465 million to cover the costs of its new production facility for its Model S sedan, and new Stanford Research Park headquarters. But it’s still impressive for Fisker, which is usually considered the No. 2 guy in the electric vehicle space.
That said, the company had recruited some top tier investors before seeing a dime from the government. It raised $150 million from Kleiner Perkins Caufield & Byers, Qatar Investment Authority, Palo Alto Investors and Eco-Drive Capital Partners. The DOE loans bump its total to $679 million.
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