Can EV startups survive mainstream auto collapse?
Click above for high-res gallery of the Fisker Karma S
Developing and building cars costs money, a lot of it. The only people who think otherwise have never actually tried to do it. Any startup business is tough to get going, but one as capital intensive as manufacturing durable goods like cars is even more difficult. In recent years, many so-called "experts" have advocated out-sourcing most of the manufacturing and focusing just on developing the unique bits that make a product special. The problem with this strategy is that it takes away even more control over the end product from the company that originated it. That company also becomes highly dependent on the financial health of those suppliers.
When those suppliers are also selling to other automakers they become susceptible to whatever ailments their customers may pick up. It's like a day-care, one kid comes in sick and the next thing you know, everyone in the family of all the other kids is sick too.
When even the strongest automakers like Toyota and Honda don't have immunity to current economic virus, it becomes increasingly difficult for startups to get a foothold. Peppercom cleantech analyst Darryl Siry takes a look at the example of Fisker Automotive and its partner/supplier Quantum Technologies. Quantum's main revenue producing business of high pressure gas storage tanks is suffering because of the ills in Detroit. It's unclear how all this might end up affecting Fisker as it plans to move ahead with production of the Karma. Fisker is also at a disadvantage in getting DOE loans for its product development because it has out-sourced assembly to Valmet in Finland. Quantum is apparently applying for loans which will presumably be used to fund development and manufacturing of Fisker drivetrain parts in the U.S. It's a tough world out there, everyone is hurting.
Gallery: Detroit 2009: Fisker Karma S
[Source: Darryl Siry]
Reader Comments (Page 1 of 1)
Tim 9:57AM (3/16/2009)
Other possible (and better) titles for this article include:
Can EV startups compete against mainstream auto with $Billions in taxpayer money?
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Can EV startups compete against the mainstream automakers/US Gov't partnership with unlimited taxpayer money making sure that the playing field is NOT level?
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Are the bailouts killing the mainstream automaker's competition, risk-reward responsibility, competition, and profit motivated innovation?
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Corporatism-Socialism, the Siamese twins of tyranny?
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Can you say "unintended consequences"?
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gorr 2:28PM (3/16/2009)
It won't work even if gm,ford,toyota,chryler,volks,nissan,honda,renault,citroen,mercedes,bmw,ferrari,lamborgini,freightliner,lexus goes out the sink. The same reasons that plague those compagny will do the same thing to fisker, tesla, zenn, zap. They don't use water power so they negate the first law of the universe and they even pollute the water on the ground that we drink sometime to keep our corpses running. These compagnies are just dead in the head, maybe forever. They even rely on peoples that are dead in their head for a long time ago and are proposing each days ruine and suicide for everyone, i say goverment peoples and scientists. Each and every proposition from these chaps are a suicide and only money from the actual workers and their past work and helped us to live until now and less and less people are producing useful goods because useful goods and useful services have been tax to the maximum.
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wooga 3:03PM (3/16/2009)
What? "Nowhere in your rambling incoherent response did you come close to anything that could be considered a rational thought. We are all dumber for having listened to it. I award you no points and may God have mercy on your soul."
stevezilla 5:29PM (3/16/2009)
*face palm*
gorr, I have a feeling you and General Jack D. Ripper have a lot in common. Are you suggesting that EV start-ups are impurifying our precious bodily fluids??
ha ha ha
p.s. you're insane.
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fast richard 8:49PM (3/16/2009)
It is hard to tell if Gorr would make more sense if he could write in English. He should certainly try to get his money back for the English classes he took. The classes didn't even teach him enough to construct a coherent sentence.
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StarBlue 12:08PM (3/17/2009)
This is not really true. If a new car company is going to build cars the old way then this would be true but any smart new company is not using the materials that Detroit uses. The new companies that will make it are creating whole new paradigms using whole new materials suites. New EV companies do not have the debt, distributor layers, vendor commitment legacy, lawsuits, etc. So the revenue upside of the new guys is massively better. Car companies have huge profit margins, even in a depression. It does not matter that car sales have dropped by millions, an EV company only needs to sell 100K cars to make a $1B profit if they know what they are doing. There are 32 EV car companies. 10% of them will make it simply because they are using none of the Detroit connections.
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gorr 10:10AM (3/18/2009)
What im trying to say is that i planned this meeting for a green car that roll on the roads and it's not me that build it, it's the engineers and managers of existing car compagnies or new start-ups compagnies. This as mistakenly been confused by many many folks as a new kind of ' corpse ' that you can put your soul in ??? As i know the corpse is now a human corpse. When i started this meeting many many souls were almost dead as soul or at least they were very mixed-up as identities and were looking for a cool society and i was the main prayer guy and i said that in year 3000 we will be able to buy cars at showrooms by writing a check to a saleman. Since that time 10 millions years ago it has provoked the rebuild of life on earth with great hopes and unfortunatelly many confusing wars on everything because there is many fears, especially racism because at the time of the prayers there was flesh and robot corpse peoples. The year 2000 was set-up as the sister soul era where peoples start to find a direct connection to other souls directly by direct communication( telephaty) . In year 3000 i will be able to speak my personnal mind to another soul directly without been interfered by other soul. This is the magic of life, no communism, just plain liberty for everyone. That's why i only speak my name and im still on the market for a cheap, efficient sport car of 15 000$-up , powered by water electrolysis. Don't confuse anymore water electrolysis with past prayers. Many peoples think that they will learn life by been electrolised collectivelly by a prayer of jesus. This has been done by jesus in the past but now i work by coherent written messages in internet blogs and they mean what they mean.
As of now the world is stopped by this confusion and they try to apply the old latin prayers to them and cars in society and they mixed-up cars with corpse, lithium-ion with state of mind,
batteries with my personnal liver, hydrogen with their personnal wish for humanity, oil with flesh feelings, energy with the control of your personnal corpse, etc, etc.
As i know, i always said to not mix religion with business and each and every existing car manufacturers and new start-up compagnies have mix completelly business with religion and they have confuse consumers. Speak your mind about car technology, car made to go on roads that we drive and are material. Don't mix up religion with this simplistics subjects that we know since 100 years, car rolling with tires are explainable and understandable. Religion done by jesus follow the years from year zero to year 3000 and we are in 2009.
Peoples follow the prayers of jesus in their secret mind and don't understand anything else and the power of today is let say 2009 volts. That's better then zero volt like it was 2009 years ago, so let's have fun ordering through this site what car we want to buy soon.