Cash-strapped Fisker Automotive Inc. said Monday it is making progress at finding potential investors that could save the company and help bring its next model to market.
The Anaheim-based maker of the $110,000 Karma plug-in hybrid sports car needs about $500 million to launch a second model, which would be made at a factory in Wilmington, Del.
But Fisker has had to halt development of the less expensive hybrid vehicle -- to be called the Atlantic -- after the Department of Energy barred it from drawing down a federal loan.
"There has been interest from different people on three continents in terms of strategic alliances and partnerships," said Fisker spokesman Roger Ormisher.
"There are ongoing negotiations and discussions. Different partners want different things from any partnership or alliance, and approach the talks from different angles," Ormisher said. "We are looking at what will help us bring Atlantic to market in the best possible time frame."
He said the company's hybrid drive train technology and global sales model has attracted the interest of potential investors.
Fisker made an automotive splash late in 2011 when it launched the high-style Karma hybrid, which uses an electric battery to go about 33 miles before a gasoline engine kicks in and extends the range. It has a zero-to-60-mph time of less than six seconds and a top speed of 125 mph. High-profile owners include actor Leonardo DiCaprio and singer Justin Bieber.
"There is value left in Fisker because the design of their vehicles is pretty valuable. It defines the brand," said Thilo Koslowski, the senior auto industry analyst at Gartner Inc., "but at the same time they are facing some strong headwinds."
Without a partner, it would be difficult for Fisker to survive, he said.
The risk to the current talks is that the potential partner decides that the only valuable intellectual property held by the company is the design and styling of the vehicles.
"If that's the case, the design might be carried over under a different name and different ownership," Koslowski said.
Though the Karma, which is built in Finland, received rave reviews for its styling, the vehicle was panned by Consumer Reports and others for mechanical problems and electrical glitches. The automaker is looking at the Atlantic, a $55,000, four-door rechargeable sports sedan, as a higher volume model that would have a broader market.
Work on the Atlantic came to a halt last year when the federal government suspended a $529-million loan after delays in the introduction of the Karma. Fisker had drawn down about $192 million of the loan. It continues to pay interest and has just started to repay principal, Ormisher said.
Fisker also had to stop Karma production after the battery maker, A123 Systems Inc., filed for bankruptcy last year. A Chinese company, Wanxiang Group has agreed to purchase A123 Systems and restart battery production. The deal could be completed later this week, Ormisher said.
Compounding Fisker's troubles is the fact that it operates in the rechargeable-car segment of the auto market.
Sales of plug-in hybrids, which include the Chevrolet Volt and one version of the Toyota Prius, amounted to less than 40,000 vehicles out of the 14.5 million autos sold in the U.S. last year. They would have been even lower if it were not for the favorable treatment California gives such vehicles by offering rebates and car-pool-lane permits. Sales of vehicles powered only by electricity are even lower -- about 10,000 vehicles last year.
"This is a tough market, there is no question," Koslowski said.