Chelsea held its annual Luxury Review, where high priced items such as apparel, jewelry, liquor, confections and motor vehicles are showcased. Front and center at the Metropolitan Pavilion on West 18th Street was the Fisker Karma. This US$100,000 plug-in hybrid sedan is still the star of the show.
One of the major components of this plug-in hybrid sedan is its lithium-ion battery array supplied by A123 Systems. Just recently, the battery maker had just sought bankruptcy protection. According to Richard Beattie, Chief Commercial Officer for Fisker, “I learned about it when everyone else did.” He made the remarks during an interview during the Chelsea event and admitted he has not made any contact with Johnson Controls, the eventual purchaser of the automotive assets and factories of the bankrupt company.
Beattie does not expect any issues with the closure of A123 even it if the company is the single supplier of battery systems for all its Karmas. He said, “Like any bankruptcy, suddenly some contracts become null and void, but A123 is still here and I’m not concerned about matters of supply.”
A123 and Fisker share similar stories, as these two start-up companies were able to secure loans from the Obama administration. Both companies announced financing successes and at the same time experienced recalls of its marketed products. Fisker has been singled out by the Republican Presidential campaign as a clear example of the federal government’s lack of business acumen. As proof of such debacles, Fisker has failed to meet its performance based preconditions to the loan grant from the Department of Energy.
Beattie admits though that the company does not have the same flexibility as large corporations would have, especially when a critical supplier suddenly closes shop. Despite these difficulties, Beattie highlighted the company’s adaptability.
This was seconded by Fisker’s VP for Global Design in saying, “We cannot at any time be focused on one supplier. We have to be flexible.”
The company is restarting its midsized luxury car program after a push back to allow the company to raise much needed capital financing. This new vehicle was previewed in last April’s New York Auto Show, codenamed the Atlantic concept. Newly appointed CEO Tony Posawatz told investors in a conference call that the Atlantic “would be the company’s path to profitability.”
Klatt declared that the A123 battery pack is not part of the Atlantic’s overall design. He said “The A123 pack doesn’t fit naturally in the Atlantic. The car is already completely engineered and we’re focused on two or three suppliers. Soon we’ll be able to move forward.” He cited that the Atlantic has a shorter wheelbase compared to the Karma and said that it is a power train solution and not a battery solution.