* Fisker courts Asian investors as China bolsters EV goals
* Has talked to China Grand Automotive, Wanxiang -sources
* 'Green' car maker expects developments in next few months
* Fisker has not made a car in six months
By Norihiko Shirouzu
BEIJING, Jan 11 Top executives at Fisker
Automotive Inc, maker of the sleek Karma plug-in hybrid, are
scouring Asia - in particular, China - for funding and strategic
partners that are viewed as crucial to the automaker's success,
four people familiar with the matter said.
Top brass of the Anaheim, California, company are expected
to attend next week's Detroit auto show, a key industry event,
to keep tabs on the competition and talk to potential customers.
But behind the scenes, Fisker is preoccupied with a more
pressing task - courting investors after a tough year marred by
the rocky launch of its flagship Karma, the bankruptcy of its
battery supplier and an election season that turned the U.S.
government-backed company into a political punching bag.
The company has not built a car in six months.
A major driver of Fisker's China focus is Beijing's support
of local Chinese automakers' efforts to acquire "green car"
technology from abroad. This is part of an effort by the
country's central government to ramp up a market for electric
cars and plug-in hybrids in China before the end of this decade.
So far, Fisker has held talks with China Grand Automotive
Services Co, a large dealership group that already
has an agreement to distribute Fisker cars in China.
It also has held discussions with Wanxiang Group, a
Hangzhou-based major producer of automotive components that last
month won an auction for bankrupt U.S. lithium-ion battery maker
A123 Systems, Fisker's primary battery supplier.
The U.S. plug-in hybrid car maker also has established
contacts with a few state-owned and closely held indigenous
Chinese automakers and is likely to hold talks with them in the
coming weeks, according to the sources, who declined to be named
because the sensitive nature of the matter.
Fisker spokesman Roger Ormisher declined to say with whom
the company has spoken. "Fisker is in advanced talks with a
number of potential strategic partners," he said via email. "We
expect some exciting developments in the next few months."
POSSIBILITIES IN CHINA
Leaders of the Southern California plug-in hybrid producer,
including its chief executive Tony Posawatz, traveled to Europe
late last year in search of new investors and partners, but no
credible leads have emerged.
They are now focusing their attention on Asia, the sources
Fisker has one product on the market now, the Karma plug-in
hybrid, whose price tag starts at around $103,000. It has a
second car in the works, the Atlantic, which is likely to start
at about $55,000.
Fisker halted the development of the Atlantic last year
after the U.S. Department of Energy barred the automaker from
drawing down the remaining portion of its $529 million federal
loan. Fisker had spent about $190 million of that loan, which
was aimed at spurring alternative energy companies in the United
Then Fisker halted production of the Karma last July when
A123 had trouble supplying batteries because of quality issues.
A123 later filed for bankruptcy and went up for grabs in an
auction as part of a court-supervised process.
China has a stated goal to put on the roads a total of
500,000 battery cars - all-electric cars and plug-in electric
hybrids - by 2015 and some 5 million by 2020. Meeting those
objectives is a test for new Communist Party chief Xi Jinping's
commitment to balance economic growth and energy conservation,
which means there is more money available in China for Fisker
potentially to harness.
"Unless you have a credible presence in China and establish
a way to leverage the scale of that potentially huge demand for
green cars, you have no future as an electric-car company," one
of the people said.
Fisker is not ruling out finding a source of new funding or
a strategic partner in other regions, he added, however.
The immediate task in front of Fisker is to complete its
ongoing effort to raise $150 million to complete the nearly
finished development of a second vehicle, and the company had
raised about $115 million of it by the end of last year. Some
Fisker officials also have pointed to the possibility of Fisker
needing additional funds to finish the second vehicle.
Also crucial for the company is the Atlantic, which is
expected to generate more volume than the Karma. Fisker is
aiming to start production of this model in late 2014 or 2015,
according to a presentation it gave Goldman Sachs last year.
Fisker has sold about 2,000 Karma cars since it was launched
in late 2011, according to the company.
Still, the company needs to raise additional funds to
develop more products and beef up manufacturing capacity, and
needs to improve technology all around.
More importantly, Fisker needs strategic partners. By
comparison, Fisker's rival electric-car startup, Tesla Motors
Inc, has received separate investments from Daimler AG
and Toyota Motor Corp. In
2010, Toyota purchased $50 million of Tesla's common stock in a
private placement and later chose to use Tesla's electric
propulsion system to power a battery-car version of the RAV4
The sources said Fisker is looking for similar strategic
deals in China and elsewhere so it can tap the economies of
scale and the technologies of bigger, mainstream partners, and
reduce costs and develop products more efficiently
"Fisker's future lies in finding new funding or a partner,"
one of the people said.
The sources also believe China is an essential market for a
producer of exotic cars, such as Fisker. While there is little
demand at present for electric cars in China, Fisker and other
upscale car companies believe they need to build a presence
because demand for luxury cars in China is forecast to grow to
2.7 million vehicles a year by 2020, overtaking the United
States as the world's biggest luxury car market.
The problem facing Fisker - founded in part with venture
capital funding in 2007 by Henrik Fisker, a former BMW
and Aston Martin designer - is mainly two-fold.
It must find a way to restart development of the Atlantic
hybrid. Fisker also needs to make sure it has a stable supply of
batteries as A123's future remains uncertain.
Fisker in July hired investment banking firm Evercore
Partners, which has expertise in restructuring. However,
Fisker's executives insist that this move was related to the
search for new investors and partners, not to explore
restructuring through bankruptcy.
Still, few promising leads for new funding or partnerships
have emerged in Europe or Asia, the sources said.