Why Chinese Companies Backed Away from Buying Fisker Automotive
Poor Fisker. Its founder fled the sinking ship, and its last hope, a Chinese bailout, will also not come to pass. Neither Geely nor Dongfeng, the two Chinese automakers who expressed an interest in buying Fisker, are interested now.
What was behind the loss of interest? Friends in the automotive industry in China say it was that Fisker lacks ownership of the technology used to power the Karma plug-in hybrid and other future cars.
Geely thought Fisker had its own intellectual property, according to a top Chinese executive at a foreign automaker owned by a Chinese company. After delving into the matter more, however, Geely learned that “Fisker does not really have many technologies in its hand and its suppliers have most of the technology,” the executive told PluginCars.com. And as a top Asia executive at a multinational supplier pointed out, Volvo, which is owned by Geely, does in fact have EV technology. So why buy Fisker?
As for Dongfeng, sources tell me that the central government—which owns Dongfeng—pulled the plug on the Chinese automaker’s quest to buy Fisker for essentially the same reason that Geely backed out: Fisker didn’t have technology of its own. In any case, Dongfeng partners with Nissan in China. “Dongfeng could probably access the LEAF if they pushed,” said the supplier executive.
Let me add another factor: lingering uncertainty about the direction the Chinese government’s EV policy is going to take.
For those of you who don’t obsessively follow the China EV scene, after announcing an extremely ambitious plan back around 2009 to dominate the world electric vehicle scene, China’s central government—that is, the top guys in Beijing—fairly quickly realized Chinese automakers didn’t have the know-how to produce pure electric vehicles.
The plan to produce a lot of EVs wasn’t abandoned, but it has modified over the past few years. Lately, the central government has been promoting production of plug-in hybrid electric vehicles and regular hybrids in the mid-term. Battery electric vehicles are a long-term plan, when the technology is mature, China’s top guys have said.
Chinese automakers, many of whom are state-owned, have paid lip service to the goal of producing EVs, and have even launched a few models. But they are not wholeheartedly jumping into the EV sea because they are still not convinced the government is truly committed. As a Chinese friend who works for a foreign automaker in China pointed out, “Remember how we talked about VW and SAIC announced making 50,000 fuel cell vehicles a year in 2007? What if other OEMs really believed it and invested big on fuel cells?” I do indeed remember it. I went to the introduction of a fuel cell bus built by GM and SAIC in Shanghai back then. None of those buses are driving around Shanghai now, however.
To be sure, the Chinese government does want to reduce its dependence on foreign oil. Electric vehicles are seen as a way to do that. So Chinese automakers are interested in producing electric vehicles, at some point. But they need to acquire the EV technology, preferably on the cheap. That is what initially attracted privately-owned Geely to Fisker, I hear. Geely wanted to wait until Fisker declared bankruptcy so it could get a good deal on the company, say sources.
It appears that China, one of Fisker’s last hopes for survival, is actually too smart to invest in Fisker.
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