REPORT: Fisker looks to 2011 for profits; color us skeptical
Fisker Karma - Click above for high-res image gallery
Anyone that has watched either the auto industry or technology startups knows how hard it is to achieve profitability. Blend the two together and you more often than not have a recipe for financial disaster. We've seen far more aspiring EV makers go belly up than actually deliver product. Even well-financed companies like Tesla have been on the brink. Aside from Tesla, the other startup with the deepest pockets is Fisker Automotive with money from venture capital firms like Kleiner Perkins and others.
Fisker hopes to reach profitability by 2011 with a sales target of 15,000 cars a year. The company claims to have a break even point of 5,000 sales a year, so if they get anywhere close to the target, profits should be rolling in. However, as much as we like the Karma – and it certainly is a much more practical alternative than the Tesla Roadster – we remain skeptical. First, we have to wonder if there is a market for anything close to 15,000 Karmas a year at a price point close to $100,000. We also remain dubious of the profit potential given that engines will be shipped from the U.S. to Finland, where the car is to be built, with the completed cars then coming back to North America. Finally, Fisker apparently still has only about 1,400 orders for the car – barely more than the 1,300 reported last January. If the economy continues to languish, Fisker could have a hard time moving 5,000 Karmas, much less three times that. Best of luck to Fisker – they are going to need it.
Gallery: Fisker Karma
[Source: VentureBeat]
Reader Comments (Page 1 of 1)
Dave 3:54PM (9/19/2009)
Its really cool looking.
I bet they can sell a bunch of them to rich folks in the middle east (who, ironically, wouldn't give a rats behind about the mpg)
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barkleyg 4:30PM (9/19/2009)
"First, we have to wonder if there is a market for anything close to 15,000 Karmas a year at a price point close to $100,000"
These guys are DREAMING! In 2008, 330,000 hybrids were sold in America, 300,000 by the Japanese automakers. GM and Ford sold only 30,000 hybrids, between the 2 of them.
So, for Fisker to be predicting 15,000 sales for this ONE model, someone has been drinking a lot of kool-ade! The chances of selling 15,000 Fiskers in one year are slim and none, and slim has left town!
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Nick 6:15PM (9/19/2009)
First of all it's "Kool-Aid" not Kool-Ade, where the hell did you get that expression anyway numbnuts, a tea-party?
You don't have to be rich to spend $100,000 on a car, and this car actually looks like a real car, not like some tin can EV made my under-funded amateurs. I bet you thousands will but this over their S-Class or 7-Series, especially in Southern California.
The Midwest will prolly stick to decade old dirty pick-up trucks for about a decade before making the switch (it usually takes 10 years for them to adopt new things).
Don't know about 15,000, but 5000 seems feasible.
jpm 7:22PM (9/19/2009)
"You don't have to be rich to spend $100,000 on a car"
Where the hell did you get that expression numbnuts?
Sam 12:20AM (9/20/2009)
@Nick
"you don't need to be rich to afford a 100,000.00 car?"
Considering the median household income in the United states in 2007 averaged around 50,000. That income came from a household, not just one income, so alot of households have 2+ people working. So, for you to be able to afford at 100,000 dollar car, you would need to get 4 households on your block to go in together and share this wonderful electric car. That's just to be able to afford the payments. I think your dreaming my friend.
mike 6:27PM (9/19/2009)
"You don't have to be rich to spend $100,000 on a car"
Like hell you don't!!
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Mark Kiernan 7:15PM (9/19/2009)
I live in a small town in Northern Italy, there is a guy here who owns a new Ferrari (F430 i think), but he lives in a rented apartment with 1 bedroom and his kids sleep on a sofa. His wife also drives a VW Touareg. You don't need to be rich but you do need to be willing to sink yourself in debt for the next few decades!
Chris M 12:24AM (9/20/2009)
There may be a few cases of people stretching their budgets to purchase one extravagant luxury, but that is the exception, not the rule, and I doubt there would be enough exceptions to support that many purchases.
Of course, there may be more people who can easily afford an $80K car than we realize, so Fiskar might just turn a profit at that. Of course, that high end market has lots of competition, and if Fiskar draws enough sales from Lexus and Mercedes, they will probably strike back with their own plug-ins. Also, don't forget that the Tesla Model S will come in at nearly $30K less, and will seriously cut into the Karma market.
andrichrose 4:38AM (9/20/2009)
I agree with Mike above , its just a question of what you
consider is important when it comes to spending your
money . Living as I do also in a small town in northern Italy
I was recently invited for dinner at a house of a local family
where some 45 ,000 euro has recently been spent on a new
BMW , yet we ate from plastic plates !
FitFan 12:14PM (9/20/2009)
You would need to be rich if you wanted to finance this car. If you're earning a middle class income of $50K and saved up for 10 years to buy the car with cash you could manage it without being rich.
I would say that 99.9% of Fisker customers will qualify as rich, and they won't come close to those sales projections.
It is a beautiful car. If I were in the market for a Porsche or Ferrari, I would certainly consider the Karma.
DasBoese 7:42PM (9/19/2009)
5000 units a year is definitely feasible for a sporty luxury sedan, 15000 not so much in this economic climate.
Even the VW Phaeton, which is generally regarded as an abysmal failure sold as much as 6000 Units per year, with others others like the A8, S-class etc. selling far more. Admittedly the price of the Karma puts it mainly against the top-end models of all those cars, but I think it's distinct styling and PHEV drivetrain give it enough desirability to compete with them.
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vfx 7:44PM (9/19/2009)
Doesn't Fetish count as a successful EV company?
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vfx 7:45PM (9/19/2009)
Make that, Venturi who makes the Fetish.
Pablo 7:45PM (9/19/2009)
The "Kool-Aid" comes from...Heaven's Gate (cult) I think....
Their suicide, conducted in shifts, was accomplished by ingestion of phenobarbital-laced applesauce and vodka, not (as is commonly believed) Kool-Aid. (However, Flavor Aid, a product similar to Kool-Aid was used for the purposes of mass suicide in the famous 1978 Jonestown massacre.) A video of the bodies in bunkbeds, covered neatly with purple blankets and wearing identical brand new Nike sneakers, was shown repeatedly during the media coverage following the suicides. They had also packed suitcases and money, presumably for the UFO trip.
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Doug 8:56PM (9/19/2009)
Dude, the expression "drank the Kool-Aid" refers to the very Jim Jones and the People's Temple massacre you mention. Heaven's Gate has nothing to do with the coining of the phrase.
Mark 4:56AM (9/20/2009)
How much do you think it will cost to send an engine from the U.S. to Finland and back? My guesstimate is $100-300. Hint: you don't send them separately, packed in a cardboard box with stamps. Far more important is the USD/EUR exchange rate, but we don't know who actually carries the exchange risk. It could be Fisker, Valmet, or the other subcontractors. Fisker saves tons of money by not building their own factory.
Karma will be sold in Europe, too. While it will be less important as a market than the U.S., I could imagine e.g. the Germans buying a few Karmas too. It won't reach that 15K, but 5,000 pieces is completely possible if they manage to create enough buzz.
The convertible (Sunset) version of Karma looks just divine. Too bad I won't have the money.
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Jeremy 2:19PM (9/21/2009)
"Karma will be sold in Europe, too. While it will be less important as a market than the U.S."
Traditionally, yes, the U.S. is a larger market for car sales than Europe. Especially expensive cars. However, most of Europe has MASSIVE tax incentives for alternative fuel vehicles and electric vehicles, and gasoline also costs significantly more than here in the US. Basically, the true expense of a car like this is driven way down by these things and it becomes more affordable than it is for a person in the U.S. not receiving such large tax credits, congestion tax exemptions, gas savings, etc.
Tesla's Model S, for instance, is expected to be approximately 50/50 sales in the US and Europe, and the Roadster is selling well over there because of how much the true cost of ownership is driven down by having an EV in most of those countries.
As an aside -- the comparison of the Karma to the Tesla Roadster is really annoying. This article does it and Fisker does it constantly -- "less expensive than the Tesla" they say. Well, sure, it's less expensive than the Roadster (and more practical, as this article notes) but the Karma is not competing with the Roadster. The Karma is a 4-door sedan and competes with Tesla's upcoming Model S sedan, which is slated to run $57k, $30k less than the Fisker. Then, Fisker says that its next car will be $40k, "even less than Tesla's Model S." Sure... except that econobox will compete with Tesla's future compact car, slated to run about $29k. They are consistently more expensive than the Tesla model in the same category, yet they constantly advertise themselves as less expensive because they keep comparing to the wrong Tesla car. Ugghhh