I am a huge fan of Tesla Motors and at one time was in talks to join their efforts to make kick ass electric cars (not actually make them, but sell/market them). Unfortunately though the economy has not been too kind to Tesla who is now awaiting word on loan from the Department of Energy that may be the make or break point in the company’s history. Regardless of what happens, you have to tip your hat that they got hundreds of high performing and well reviewed/received electric cars into the market. Not a lot of other companies can say that. Last week they unveiled their prototype for their more affordable sedan compared to their 125 k sports car that is already in production and on the streets.
Tesla actually took pre orders for the car and have booked about $2.5 million in pre orders already. Pretty badass looking car and with $7,500 electric car tax write off, its not a bad option at 55k before the write off especially considering it has a 17 inch touch screen and 3G connectivity. But most experts say that, this car will never be massed produced unless Tesla gets that DOE loan. They don’t have a factory to build just yet although rumblings are they are close to locking that down somewhere in the Bay area. Tesla has opened up some pretty sweet stores, modeled after Apple stores across the US and are ramping up production of the Roadster, but still are in pretty dire straights to get that loan in order to make the picture above a reality. On the flip side, the lesser known Fisker recently announced it has received a whopping $85 million in funding earlier this week. That’s a massive round and comes right off the heels of their announcement that they have signed deals to have 32 dealerships across the country sell their cars. Unlike Tesla, they will turn to existing dealerships rather then opening their own. Not a bad strategy to cut overhead initially.
The news of the 85 million dollar round was so impressive, that Tesla former CMO wrote an Op ed piece commenting on his optimistim surrounding Fisker.
“But an $85 Million investment with new outside money is a positive sign, no doubt, that things are progressing. Bringing the car to market still depends on successful development of a working prototype and successful crash testing and production ramp up. These are not minor challenges.
What makes this news all the more interesting is that Fisker’s nearest competitor (and my former employer), Tesla, has struggled to raise significant capital since the capital markets collapsed last September. An internal convertible round was eventually closed, but by the company’s own admission it has been difficult. This is despite the fact that Tesla has over 300 cars delivered to paying customers, who are reporting that the cars are working beautifully for the most part.”
To my knowledge nobody has actually driven a Fisker automobile at this point so its hard to gauge who really has the upper hand here. Tesla is ahead of the game but in a tough place financially while, Fisker is behind with a lot of work to do, but seems to have the money in place and maybe a better business model to survive in these tough times. They also have a commercial which Tesla does not.
In the end, its impossible to handicap. I like a company that is plugged into Silicon Valley’s hearts and minds and has actual customers at this point. However I also like a company flush full of cash too. At the end of the day, the auto industry will be in a better place if one or hopefully both stay in business. Hopefully 1-2 years from now, both comanies are doing well and I can choose between the two cars for my eco friendly babe magnet.
