Young start-up Fisker Automotive has barely begun putting its first-ever product on the road, the Karma sedan, yet already the automaker is reportedly strapped for cash and going into extreme cost-cutting mode.
The automaker previously secured $193 million of the up to $529 million loan from the U.S. Department of Energy, but according to a new report by the Associated Press via Green Car Reports, Fisker is now in new negotiations with the DoE to try and gain access to the rest of the funding after failing to meet the requirements set forth in the original loan agreement.
Fisker’s failure to meet certain sales and development goals is what has placed the young automaker in a tough spot, unable to access hundreds of millions of dollars in additional funding. The missed sales goals have been partially blamed on multiple delays on the Karma making it to market, partially due to two separate recalls.
As a result of the lack of cash, Fisker announced that it had to let go 40 contractors and employees who worked at the design and development center in Anaheim, California, as well as 26 workers at the production facility in Wilmington, Delaware. The Wilmington plant is intended to be responsible for Fisker’s second model, the Nina plug-in hybrid.
“We are frustrated that Fisker and the DoE have been unable to come to terms on revisions to their loan agreement in time to avoid this,” said Brian Selander, a spokesman for Delaware Gov. Jack Markell. Selander’s sentiment’s were shared by Fisker spokesman Roger Ormisher, who said Monday that, “We hope we can reach a resolution soon.”
In addition to the DoE loans, Fisker has raised over $850 million in private equity, with $260 million coming in late 2011 alone.
