After many months of dragging on, hoping for the best, Fisker Automotive has filed for chapter 11 bankruptcy. This means that the electric car startup company will not be able to pay back the remainder of the $192 million loan, which it had received under the U.S. Government’s Advanced Technology Vehicle Manufacturing (ATVM) program. The vendors who supplied the components will also have to wait for their payments, a while longer.
“After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive’s value for the benefit of all stakeholders. The Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid’s leadership,” Marc Beilinson, Fisker chief restructuring officer said.
Fisker, the Anaheim, California-based electric car maker has listed assets worth as much as $500 million, and debt of as much as $1 billion in a Chapter 11 petition filed in U.S. Bankruptcy Court in Wilmington, Delaware.
While the government has lost around $139 million worth of taxpayer money with this loan, it was able to recover $25 million in an auction where a conglomerate going by the name of Hybrid Technology purchased some of Fisker’s remaining assets. Hybrid Technology is reportedly linked to Hong Kong based billionaire Richard Li.
This is certainly a major setback for the electric car initiative, but the costs of making the Fisker Karma and pricing it at $103,000 did mean that the sales numbers remained low. Yes, a lot of celebrities were quick to buy one, but this was never a mass market product.
Under the U.S. Govt.’s ATVM program, Ford Motor Company is using a $5.9 billion loan to upgrade factories across Illinois, Kentucky, Michigan, Missouri, and Ohio and to introduce new technologies that will raise the fuel efficiency of more than a dozen popular vehicles. Nissan is using a $1.4 billion ATVM loan to upgrade their Smyrna, Tennessee, manufacturing facility and construct one of the largest advanced battery manufacturing plants in the United States. The plant will be capable of producing 200,000 advanced-technology batteries a year.