Fisker Automotive has reportedly halted development of Project Nina as it renegotiates terms of its DoE loans.

Fisker Automotive has halted development of future electric cars, and laid off at least 66 employees here in the US. Twenty-six of Fisker's Delaware employees and 40 contractors in California were laid off in an attempt to conserve cash as the automaker seeks to renegotiate the terms of its Department of Energy (DOE) loans.

Company executives insist that design, engineering, development and testing of its second vehicle—a mid-size plug-in hybrid referred to as Project Nina—is nearly complete and that production will begin in mid-2013.

"We hope we can reach a resolution soon," Roger Ormisher, a Fisker spokesman, said on Monday.

Meanwhile, the automaker was forced to lay off workers at its former General Motors facility in Wilmington, Delaware. "We are frustrated that Fisker and the DOE have been unable to come to terms on revisions to their loan agreement in time to avoid this," announced Brian Selander, a spokesman for Delaware Governor Jack Markell.

Fisker has laid off 26 employees at its former General Motors facility in Wilmington, Delaware. Photo shows Delaware employees in upper right-hand corner and Fisker's California crew in main image.

Fisker was expected to receive a $529 million loan from the DOE. The company has been plagued by missed deadlines and other technical problems. Fisker Automotive so far has been awarded $193 million, from the allocated DOE funds.

Delaware economic development director Alan Levin believes that Fisker and the DOE are close to signing an agreement that will get the automaker back in action. "We knew that this was always a possibility," Levin stated of the layoffs. "What they're trying to do is conserve cash."

A DOE spokesman did not respond to inquiries by the Associated Press.