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Electric carmaker backed by $529M U.S. loan misses early goals

WASHINGTON — An electric car company backed by more than a half-billion dollars in Energy Department loan guarantees has missed early manufacturing goals and has gradually pushed back plans for U.S. production and the creation of thousands of jobs.

This week, Fisker delayed until 2013 the production of the moderately priced family car it plans to build in Delaware. It also learned that its Finnish-produced luxury model, the $96,000 Karma, which is two years late in reaching U.S. markets, failed to meet a promised energy-efficiency standard.

With the demise of Solyndra, a solar company that also won a half-billion-dollar loan from a program to spur clean-energy technologies, the Energy Department's loan guarantees have come under intense scrutiny, and the Obama administration has been under fire for making risky loans to unproven ventures. The administration has stood behind the lending, saying that risk is inherent in backing emerging technologies.

Fisker was among the big winners in the administration's effort for broader development of electric vehicles, and company officials said their problems bear no resemblance to those of Solyndra, which filed for bankruptcy protection in September.

"Without any excuses, yes, we did have some delays," company co-founder Henrik Fisker said during a stop in Washington this week to show off his company's sleek new Karma. "But this is completely different. You can't compare at all."

The Energy Department confirmed this week that it has eased expectations after conditionally approving the loan to Fisker and has made allowances for scaling back projections in the final loan agreement. But the agency declined to make public those adjusted terms, including projected car sales volume or milestones the company must meet in connection with its $529 million loan. Agency officials attributed Fisker's delays to regulatory hurdles and issues beyond the company's control.

Henrik Fisker said in an interview Wednesday that, as of this week, the Karma had been cleared for sale in the United States. Forty have arrived from Finland to be delivered to dealers.

"Next year we will reach the 12,000 or 15,000 vehicles we predicted," Fisker said. "We are really past the startup risks. That means the skeptics who said we would never produce a car were wrong."

In applying for the federal help, the company promised it would produce and sell at least 11,000 Karmas by the end of last month.

Fisker's deal generated controversy when the company announced that it planned to build its luxury model in Finland because it could not line up a U.S. contract manufacturer. The Energy Department, reacting this week to an ABC News report on Fisker's Finnish operation, stressed that loan proceeds are going to U.S. suppliers, not to the Finnish manufacturer.

As a condition for receiving the federal help, Fisker had agreed to build its less-expensive family sedan, the Nina, in the United States, and a manufacturing plant in Delaware was announced.

Energy Department officials said Fisker's loan included $169 million to support engineering work for the Karma that was done in the United States, mainly at Fisker's California headquarters, which has 700 employees.

An additional $359 million loan segment supports production of the Nina, which will be built at a former General Motors plant in Delaware. Fisker has 100 workers at the Delaware site and says it plans to employ 2,500.

Electric carmaker backed by $529M U.S. loan misses early goals 10/21/11 [Last modified: Friday, October 21, 2011 10:01pm]
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