DOE loans Fisker Automotive $530 million to build two plug-in hybrids
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In its latest bid to help finance the car of tomorrow, the Obama administration said it would lend more than $500 million to Irvine-based Fisker Automotive Inc. to develop a pair of plug-in hybrids.
The loans, announced today, come from a $25-billion Department of Energy program to fund development of alternative vehicles. According to the administration, the loans will help create or save 5,000 jobs at Fisker and at suppliers to the vehicles.
The $528.7-million low-interest loan ‘is another critical step in making sure we are positioned to compete for the clean energy jobs of the future,’ said Energy Secretary Steven Chu. Over the summer, the DOE loaned $8 billion to a variety of automakers and suppliers under the same program.
The loans to Fisker are sure to spur the rivalry between it and Tesla Motors Inc., maker of a $109,000 all-electric sports coupe called the Roadster. Tesla, based in San Carlos, Calif., was awarded $465 million in DOE loans, primarily to build its second all-electric car, a sub-$50,000 sedan, in the Golden State.
For its part, Fisker plans to use $169.3 million of the loan to finish development and production of its $87,900 plug-in hybrid sedan, the Karma, which is due out next summer.
The majority of the funds will be used to help the automaker develop its next generation of vehicle, called Project Nina: a ‘family oriented, user-friendly’ plug-in that would be built in the U.S. and cost $47,400. Fisker hopes to sell 75,000 to 100,000 of the cars per year, starting in 2012.
‘This conditional loan represents a significant step in America’s future,” said Henrik Fisker, the automaker’s chief executive, saying that it would ‘help restore the U.S. as an auto industry leader.’
Unlike the less-expensive future model, the Karma will not be built in the U.S. Instead, Fisker is contracting Valmet Automotive Inc., a Finland-based company, to assemble the Karma, although the DOE estimates that 65% of the parts in the vehicle will come from U.S. suppliers.
Tesla’s Roadster is assembled in England, under contract by automaker Lotus. Tesla plans to build a battery factory in the Bay Area as well as an auto assembly plant in the Los Angeles area, where production of the Model S would begin in late 2011. but no final sites have been announced yet.
Although a variety of new technologies are being considered for future generations of cars, no clear winner has yet emerged. Whereas vehicles such as the Roadster run on battery power alone, Fisker’s plug-in hybrids have both electric motors and gasoline engines on board, and use them in concert.
Yet because they have far larger batteries than hybrids such as the Toyota Prius, and can be charged by plugging them in to an electrical outlet, they have the potential to be considerably more fuel-efficient.
Several other automakers, including General Motors Co., are developing similar plug-in technology, but none have come to market in the U.S. to date.
-- Ken Bensinger