Chinese Billionaire Takes On Musk With Electric-Car Rebootby
Lu Guanqiu changes Fisker brand name to Karma Automotive
U.S. price tag for relaunched plug-in hybrid will be $115,000
With a new name and financial backing from Chinese billionaire Lu Guanqiu, electric-car maker Fisker Automotive Inc. has a shot at life after death.
The company is changing the Fisker name to Karma, which is also the name of its $115,000 plug-in hybrid coupe. Karma the company is trying to alter its fate after its previous incarnation as Fisker failed to repay $139 million in U.S. government loans and filed for bankruptcy. With Lu’s backing, California-based Karma now has 300 employees.
Karma the car plans to relaunch next year into an increasingly crowded field of competitors and the threat of cheap gasoline, which has hurt sales of hybrid-electric cars and electric vehicles. Elon Musk’s Tesla Motors Inc. just delivered its first Model X sport utility vehicles while General Motors Co. has a new Chevrolet Volt and BMW is preparing a plug-in hybrid version of its X5 SUV.
So it’s good for Karma that Lu is focused on the long term, said Chief Marketing Officer Jim Taylor.
“He’s in this for the long haul,” said Taylor, who once ran the Cadillac brand for GM. “He also doesn’t want to lose a fortune.”
Lu, the 70-year-old founder and chairman of auto-parts maker Wanxiang Group Corp., started his career making bicycles and sees electric cars as a crowning achievement, Taylor said. Lu wants to develop cars that help solve China’s air-pollution problems, he said.
Chinese investors have bankrolled the startups of three electric-car companies. Faraday Future is working on an electric vehicle that’s backed by Jia Yueting, founder and chairman of Leshi Television, an online video site. Atieva Inc., founded by former Tesla executive Bernard Tse, is also funded in part by Chinese investors. Shanghai-based NextEV has offices in the U.S. and Europe and has hired former Ford Motor Co. car guru Martin Leach to build the company.
Faraday, Atieva and NextEV haven’t said when their cars will go on sale.
Chinese companies are launching in the U.S. because there’s a lot of talent for engineering, battery development and especially for more traditional auto-company development needs like manufacturing and design, said Eric Noble, president of Car Lab, an auto-industry consulting firm in Orange, California. Also, there are more charging stations in the U.S.
The last time there was a flood of capital backing electric cars, batteries and hybrids, it ended in tears. Investors piled into startups in the mid-2000s thinking high oil prices would usher in a new era. But the cars were expensive and had short driving ranges. Sales were limited.
Fisker went bankrupt, as did Coda Automotive Inc. and Aptera Motors Inc., which made a three-wheeled electric car. Tesla survived but has never turned an annual profit.
The Karma will compete with Tesla, whose Model S car and Model X SUV sell in the same price range. Model X deliveries started this week with high-end versions that cost more than $100,000.
The Karma is a plug-in hybrid, which has both an electric motor and a gasoline engine. It can travel 350 miles (560 kilometers) on a charge and a tank of gasoline, Taylor said. The Tesla Model S, a pure electric car, has a range of as much as 295 miles, according to the company’s website.
The Karma will run 50 miles using just the electric motor, Taylor said -- about the same as the new Chevrolet Volt plug-in hybrid that goes on sale in January.
Karma has recreated its website with the new name and a badge for the hood of the car that no longer bears the Fisker name. The new site boasts that the cars are “beautiful, clean and memorable.”
Karma’s main attraction is its styling, making it an exclusive fashion piece for wealthy buyers, Taylor said. Before going out of business, Fisker sold 2,000 Karmas. The company was created by former BMW designer Henrik Fisker and counted Leonardo DiCaprio and Justin Bieber as customers before reliability problems and troubles with its battery suppler, A123, killed the project.
Retired GM Vice Chairman Bob Lutz thought the car was so good-looking that he has started a company called Destino that packs Corvette engines under the hoods of slightly modified Karma bodies.
“It is unquestionably one of the most beautiful four-door cars ever and withstands the test of time,” Lutz said in an e-mail.
While the company gets up and running producing Karmas, it will continue developing the Atlantic, a smaller model, and eventually a pure electric vehicle, Chief Executive Officer Tom Corcoran said.
“You can’t be focused on the short term with this,” Corcoran said. “Chairman Lu has great vision and he is very committed to batteries and the electrification of cars.”