Fisker Automotive, the taxpayer-subsidized electric car maker whose founder Henrik Fisker resigned on Wednesday, faces more bad news this week. Fisker has been in talks with Chinese auto maker Geely, but the Chinese company has withdrawn its bid because it doesn’t want to build cars in Delaware, the Wall Street Journal reports:
Fisker management had proposed to the Chinese that as part of any sale it tap the remaining portion of a $529 million U.S. loan, a move that would commit a new owner to building Fisker cars at a former General Motors Co. auto factory in Delaware, a person familiar with the situation said on Monday.
The Delaware plant is big, old and expensive and the Chinese balked at the U.S. loan because they don’t want to be compelled to build cars there, another person said.
The U.S. government gained collateral on Fisker assets under its Advanced Technology Vehicle Manufacturing loan and would essentially control the company in the event of a default or bankruptcy. The U.S. could agree to extend the deadline for payment or otherwise restructure the $192 million loan.
The Chinese auto makers that have been discussing an investment in Fisker, Zhejiang Geely Holding Group and Dongfeng Motor Corp., recently backed away from discussions, three people familiar with the matter said. One factor in their decision was the potential requirement that company build cars in Delaware, one of the people said.
Other auto makers are still in negotiations with Fisker, a company spokesman told WSJ. The electric car maker has faced a series of unfortunate events since it received its $529 million Department of Energy loan in 2009. The auto maker borrowed about $193 million of that loan, but the DOE froze the unused portion of the loan because of failure to meet production deadlines.
The battery maker that supplied batteries for the Fisker Karma, A123 Systems, went bankrupt last year and sold most of its assets to a Chinese company, which halted Karma production completely.