It’s tough to be an emerging automaker…really tough. Just ask the scores who have tried and failed. Fisker Automotive is helping change that dynamic with the successful launch of its Fisker Karma and delivery of 1,000 vehicles to date, generating over $100 million in revenue in the first four months of 2012 alone. The Karma, an electric vehicle with extended range, offers up to 50 miles of driving on battery power and an additional 250 miles of electric driving using electricity created by its on-board gasoline engine-generator.
Henrik Fisker has enjoyed quite a storied career in the auto industry, leading the design efforts of large and well-respected automakers while creating some of the most stunning cars on the road. Picture the Aston Martin DB8, Aston Martin V8 Vantage, and BMW Z8 Roadster, to name a few. Yeah, those cars. Fisker was creative director at Ingeni, Ford’s London-based design and creativity center, and also director of Ford’s California-based Global Advanced Design Studio. He served as design director and member of the Board of Directors at Aston Martin and was president and CEO of BMW design subsidiary DesignworksUSA.
All of this has led the Denmark native to his current prominence as co-founder, executive chairman, and chief designer at Fisker Automotive in car-centric Southern California. While Henrik Fisker seems to be in motion all the time, editor and publisher Ron Cogan was able to find some quiet moments with the entrepreneur just a week before his introduction of the company’s second model, the Atlantic, to discuss his activities and future plans.
Ron Cogan: What prompted you to launch your own company?
Henrik Fisker: “I had a career that went beyond my own expectations as a kid. I couldn’t even imagine being able to design a car that would be in a James Bond movie. When you reach those type of heights you just feel the need to do something more. After working at BMW and designing the Z8, I felt that maybe there’s something else I can do in the car industry that goes beyond working in the corporate world.”
RC: You could have gone in many directions with the Karma but chose to go with an extended range electric powerplant. Why?
Fisker: “I felt that to truly be successful, we needed to create an uncompromising, environmentally friendly vehicle. The world doesn’t really need just another car with just another gasoline engine in it, even if it’s a supercar. So for me it was about creating a whole new lifestyle brand and a whole new type of vehicle.”
“When we looked at consumer behavior, we found that the ideal would be a car like the Karma that you could drive about 30 to 50 miles in a pure electric commute, not using a drop of gasoline. You make a strong statement that you are for energy security and against the import of foreign oil. But on the weekends you can jump in this car and go on a road trip somewhere if you feel like it. It gives you the comfort that if you forget to plug in or you’re driving a bit longer today, if you run out of electricity the gas engine automatically turns the generator and creates electricity while you’re driving. You have that peace of mind and there’s no range anxiety.”
RC: Many companies have aspired to create modern electric cars for the mainstream auto market, and almost all have underestimated the enormous effort and cost involved in doing this successfully. What sets Fisker Automotive apart?
Fisker: “One billion dollars…”
Fisker: “It’s a little over a billion dollars in private funding, actually. And of course you have the Department of Energy loan, but we’re seeking additional capital to pay off that loan. We don’t really want to be entangled in all the political issues that surround the Department of Energy and whether they should, or should not, give loans out. So we’re trying to separate ourselves from that. It was a great idea, but it’s become a very hot political topic and there are some restrictions associated with it, so we would rather be free to act as an independent company without that loan.”
“We have seen that people truly believe in this company, that it has enormous potential. Venture investors don’t invest for fun. They invest because they want many, many times the return. They obviously see a huge potential in our company, and that’s not just about the technology. It’s about the brand. It’s the fundamental idea of creating a lifestyle brand that’s about responsible luxuries and caring about being environment friendly, or about energy security.”
RC: What else makes Fisker Automotive unique?
Fisker: “We have also built up an amazing international automotive team here from some of the best people all over the world. We just hired probably the best automotive CEO in the world, Tom LaSorda, who is running the day-to-day business. He obviously is a master in manufacturing, quality, supply, and everything else that you need to grow a business.”
“The fundamental thing about the car industry is that you cannot survive as a tiny company. You need a very clear strategy how to become quite a big car company to survive, and that demands stellar people, an infrastructure, money, and a clear vision – not just for a car but for a range of cars. You cannot survive on one car. You can’t create a brand and you can’t create a dealer infrastructure, because they need multiple models to make money. We have set up a sales organization with over 100 dealers worldwide already and we’re constantly expanding that. You need these dealers to buy into the company and you do that by having a future model range. It takes a lot of things to build a successful car company…not just a car. It’s simply not enough.”
RC: So this is what’s required to get in the game?
Fisker: “There was a moment in time four years ago, when we started, that was sort of the perfect storm. You had several big companies going bankrupt, and that gave us an opportunity to emerge with something completely new when everybody else was almost completely exhausted. People were looking for alternatives. We were able to attract capital from those that also saw an opportunity for something new to come forward. On top of that, we were able to buy our factory from General Motors after they went bankrupt for only $20 million, which now would probably cost somewhere between $500 to $700 million. Those things aren’t going to happen again. I don’t think even venture firms are going to invest again in new car companies because there was also a moment in time when nobody had started with this new technology.”
RC: How has founding your own automotive brand changed you?
Fisker: “When you found your own company you find that everything matters, 24 hours a day. In any job there is a point where you just are too tired and you simply say, ‘now I need some rest,’ and you leave, or you go home, or you sleep. But when you have your own company you don’t really do that, at least until you know you can hand it over and someone’s doing it. If not you have to do it yourself…so that is a dramatic difference.”
“I think the way it changed me was really my realization that there is practically no difference between my private life and my business life. It is one. Wherever I go, I always talk about the car if I can. There’s probably a blurry line between business meetings and not, because everything is business meetings. You have to enjoy it…that’s kind of the thing. And I do love it. I have a fantastic time. I’m not paying so much attention right now that I founded the company or my name is on the car. I’ve been too busy and we still have a lot of work to do. It’s clear that it is unique to have founded an automotive brand as it happens very rarely.”
RC: What’s your most memorable moment in launching the company?
Fisker: “When we pulled the cloth off the first Karma show car at the Detroit Auto Show in 2008. That was quite a fantastic moment because, to my surprise, I think we had about 100 journalists storming up on the stage and all around me. Here we were, you know, showing just a show car. But it was very exciting for the automotive industry because everything was very gloomy, and yet here comes a new car. So that was a very, very memorable moment.”
RC: I recall being at the Washington Auto Show and seeing future Fisker Karma owner Colin Powell admiring the car at your exhibit. What other notable Karma owners are there?
Fisker: “It’s out there that Ashton Kutcher bought a car. Justin Bieber was given a car by his manager. Leonardo DiCaprio drives a Karma. The Prince of Holland and the Prince of Denmark drive Karmas. We have quite a lot of interesting people driving the car.”
RC: Why do you feel buyers like this are attracted to the car when they can really have anything they want?
Fisker: “It is, first of all, a beautiful car and it’s great to drive. It also makes such a strong statement about who you are as a person and what you stand for, what you believe in….in my view in a very honest way. What I mean by that is it’s not always so believable if you see a millionaire or a super wealthy person – a famous person – drive around in a $20,000 car. It’s almost like they want to show the world how much they sacrifice. Whereas someone who’s driving around in a Karma…it’s clear that person has the money and they want to drive a nice, luxurious, sporty car that’s good looking. It’s a true, honest statement.”
RC: So luxury, eco-performance, and no sacrifices?
Fisker: “The Karma goes beyond any small ‘sacrifice’ car, in a sense that our vehicle actually is more environmentally friendly in many areas than any small car. For instance, all our wood is reclaimed here from the U.S., out of California fires or from Lake Michigan. We don’t cut down any trees in Brazil or anywhere else. We use extensive recyclable material throughout the car. One example unique to us is our paint, which uses recycled crushed glass instead of metal flakes to give it that metallic effect. And we have the world’s largest solar roof.”
“It’s an extremely important message that people are sending when they buy this car. They are truly showing that they have a lifestyle where they care. They’re about responsible luxuries, about the future of our planet, and I think about a future of living in a peaceful world where we’re not relying on foreign oil. I think that’s why you have these wealthy celebrities attracted to it, because they also feel they can be a good example with this car. I think people who have done well in this world probably feel some obligation to be a good example.”
RC: What are you focusing on next?
Fisker: “Obviously, the Karma because that is building the brand. I am personally going to be engaged in marketing and PR because we have to create brand awareness all over the world. I’m going to do a lot of that specifically in Europe as we grow the market there. After that it’s going to be the Middle East and Asia.”
“Also, following the internal design development of our future vehicles and making sure all of that stays on track, of course. Then there’s our next vehicle, which is about the size of an Audi A5 and more of a family sedan, priced well below the Karma. It’s extremely beautiful, sporty, and dramatic for the segment. On this new platform we’ll spin off several new models in the future as well. Beyond that we definitely have grand plans for the future, moving into other segments and really growing ourselves into becoming a large carmaker that eventually produces 100,000 cars a year. And we have a couple of interesting secret developments happening with some strategic corporations we are working with on the Karma as well. So we have a lot of parallel things going as we are moving forward.”
RC: Is the market ready for Fisker plug-in vehicles?
Fisker: “In every other product area in the world, you have new brands constantly emerging, whether it’s a pair of jeans, a cell phone, or a television…except for the automobile. We have been used to the same old brands for generations and I think there is a new generation that needs a fresh breath of air.”