Fisker is not going to have the luxury green-car market to itself. A few months before the company won its federal loan, the Department of Energy announced a $465-million loan to its main competitor, Tesla, to build its own four-door family sedan, the Model S. A billion dollars in taxpayer money is now riding on whether two competing EV start-ups can find traction at the high end of the car market. (The Obama administration, meanwhile, gave Nissan another $1.4 billion in loan guarantees to build the Leaf in Tennessee.)
The high-end EV industry is small. So small that Tesla once hired Fisker Coachbuild, in 2007, to design the Model S. Fisker showed up at Detroit a few months later, in 2008, with a green car of his own, the concept Karma. Tesla executives were stunned. “When they pulled the sheet off, all the Tesla people went running for their phones,” says an observer. “It looked exactly like what Fisker had designed for Tesla’s Model S.”
Tesla sued Fisker, accusing him of stealing trade secrets. The case settled in late 2008, with Fisker awarded more than $1 million in fees and costs. “That lawsuit was all about executive egos,” a Tesla official says. A Fisker insider is less diplomatic: Tesla co-founder Elon Musk, he says, “is just a brat.” Tesla, for its part, went out and hired star designer Franz van Holzhausen from Mazda, in a clear attempt to compete with Fisker.
But Tesla and Fisker, though fiercely competitive, want to create an industry between them. They share a business model that owes more to Silicon Valley than Detroit. And with none of Detroit’s legacy costs, they are both far leaner than GM could ever be. “We want them to succeed,” a Tesla exec told me. The Fisker people expressed similar sentiments.
Can a new market support not just one but two start-ups selling high-priced electric cars? Both Fisker and Tesla are relying on a kind of trickle-down progression, where high-end buyers lead the way, creating economies of scale that ultimately bring prices down. “It’s like plasma TVs,” Koehler says. They started out expensive, and now everyone has one.But the new TVs were introduced by established, stable companies, not start-ups gambling on a single product and living investor-to-investor. One condition of Fisker’s DOE loan was that the company had to raise roughly another $150 million in matching funds. Fisker propositioned its own suppliers for investment, tapping battery maker A123 Systems for $23 million; A123 became Fisker’s lead battery supplier around the same time. A competing battery maker, EnerDel, declined to invest. “We just couldn’t get there, as far as the valuation of the company was concerned,” Charles Gassenheimer, the CEO of EnerDel’s parent, Ener1, told a panel at a Washington, D.C., electric-vehicle conference in January. Then he hushed the room by warning that a “high-profile bankruptcy” could kill the EV sector.
There are also serious questions about Quantum, Fisker’s development partner, which created the Q-Drive and is responsible for the vital software system that synchronizes the Karma’s batteries, inverters, motors and braking system. A Fisker insider hints that once the Nina goes into production in 2012, Quantum may no longer be necessary as a development partner, and the two companies will part ways.
Perhaps it will all work out. The Q-Drive, it turns out, has in fact been operating for more than a year now—in two GM pickup trucks secretly tooling around Southern California. “We’ve put thousands of miles on them without anybody knowing,” Koehler says. But my requests for a test drive in a secret pickup were turned down.
Late in the day, I leave Fisker and make my way up the 405 to Santa Monica, to visit a very different electric-car start-up. Housed in a former Saturn dealership on Wilshire Boulevard, the offices of Coda Automotive are a hive of activity compared with the hushed, empty spaces at Fisker. Young, casually dressed engineers are everywhere. Although it’s almost 5 p.m., nobody shows any sign of going home anytime soon.
I prepare to be refused a ride in their product, but within minutes, I’m sitting in the passenger seat of a prototype Coda sedan, whizzing up a side street with CEO Kevin Czinger at the wheel. Built on a reengineered Mitsubishi chassis, it looks like my rental. I don’t feel like James Bond. And then Czinger says words that would make Henrik Fisker fling his Gucci shoes. “It’s a car,” he says with a shrug. “Except it’s quiet, it uses zero gas, and it’s safe and affordable.”
Perhaps the least-known EV start-up, Coda will sell this modest sedan for approximately $30,000. The Coda was created from the inside out—it’s an engineer’s car—starting with a high-energy-density lithium battery system that Coda engineers created with components from Saturn Electronics in Michigan. “In an accident, these will not smoke, much less explode or burn,” says Czinger, brandishing an aluminum-sheathed battery cell at a conference table in his office. There are no trophies here, no fancy suits, just a Bob Marley poster on the wall. Czinger uses the phrase “safe and affordable” as often as possible.
Compared with Fisker and Tesla, the company is a shoestring operation, with a scant $80 million in venture capital and no government loans. Yet the Coda sedan is almost finished, Czinger says, except for fine-tuning the traction-control and airbag systems. The car itself will be assembled by one of China’s biggest automakers, but Czinger estimates that about a third of the Coda’s price tag will pay for U.S.-made components. Between the fourth quarter of this year and the end of next year, he plans to produce 16,000 cars, which the company will sell out of small dealerships in at least four affluent California counties. If all goes well, by the time Fisker and Tesla come out with their mid-priced models, Coda will have been on the market for almost two years. “It’s a pretty plain car,” Kleiner Perkins’s Ray Lane, who once considered investing in the company, told me. Then again, maybe that’s the point.
Will the future of the automobile look more like the Coda, or the Karma? Will the next generation of cars tap into our fantasies, like the Karma, or will those bloated designs simply wither away—along with their role as a totem of sex and success—in the shiny, silent EV Age?
I keep coming back to something I heard from Tesla designer Franz van Holzhausen. Consider that with no engine, no exhaust and no gas tank, an electric vehicle doesn’t even really need to look like a car at all. The battery and motor drive of the Tesla Model S all fit into the floor of the vehicle; instead of an engine under the hood, there’s a trunk. “It’s like a skateboard,” van Holzhausen said. “All the rest of the car is opportunity space.”single page
Five amazing, clean technologies that will set us free, in this month's energy-focused issue. Also: how to build a better bomb detector, the robotic toys that are raising your children, a human catapult, the world's smallest arcade, and much more.