Fisker Automotive Hunts for Survival Money in China
Fisker Automotive is facing a cash crunch. The company is turning to China to find the money it needs to survive. But so far it isn’t having much luck, according to my sources.
The maker of the Karma luxury plug-in hybrid doesn’t have enough cash on hand to finish development of its next vehicle, the Atlantic. According to Fisker spokesman Roger Ormisher the company is seeking a “strategic partnership or alliance to enable us to bring the Fisker Atlantic swiftly to market.” Translation: Fisker needs some money. Now!
One Chinese company that Fisker is talking to, as has been reported, is Wanxiang. Wanxiang is one of China’s largest suppliers and has a significant presence here in the U.S. More relevant to Fisker’s needs is the fact that Wanxiang just received approval from the U.S. government to purchase most of battery maker A123, which supplies Fisker’s batteries.
“We will be interested, in any way we could, to help Fisker since they are a customer of A123, and A123 is currently a shareholder of Fisker,” Pin Ni, president of Wanxiang America Corp. told PluginCars.com. Wanxiang has a history of bailing out cash-poor American companies. Last November, Wanxiang loaned A123 $50 million. Now that is owns A123, I guess that loan was worth it.
But Fisker has also approached other Chinese companies for help, according to my sources. It has already met with Dongfeng Motor Co., one of China’s largest state-owned automakers, sources tell me. Nothing came of that meeting. It has also been in contact with Beijing Automotive Industry Corp. (BAIC), another large state-owned automaker, said those sources. The outcome of that meeting is unknown.
Fisker’s Ormisher would not confirm Fisker had met with Dongfeng or BAIC. “We can confirm we have had a great deal of interest from companies across three continents,” he wrote in an email.
To be sure, China’s state-owned automakers are under pressure from the central government to produce electric vehicles. But I would guess they would rather invest in a company that has good EV technology, and use it in their own cars.
What’s my advice? Fisker should talk to China Grand Auto, its intended distributor in China. China Grand is the second largest dealership group in China in terms of 2012 revenue. It has plenty of cash, and is even weighing going public in China, which would boost its cash hoard. If China Grand thinks Fisker has a future in China, it should help fund Fisker’s survival today.
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