Fisker, an automotive manufacturer based in California (2009), created luxury cars that were electric powered. The cars were an immediate hit with stars such as Justin Bieber and Leonardo DiCaprio buying multiple units. The seemingly reasonable price, a meager $100k for a supercar), attracted a cult following. People didn’t know that the production cost of one of these bad boys was around $600k…Anyway despite great sales and promotion from famous people, Fisker managed to go bankrupt in 2012.
Since then Fisker has not made a single car but rather has been in constant legal battles with creditors with claims totaling a billion dollars. They had creditors all over the country, even big names like GM. This past February the company was won by one “Wanxiang Group” in bankruptcy court. The final price?…$150 million. This means that around $850 million was still owed to these creditors. In April they came to a settlement. Only a small percentage would ever be paid back because most of the creditors were unsecured. The government has paid out just under $150 in settlements surrounding this blackhole of a company.
This is an example of a terrible business situation, almost everyone involved has lost money. The government, the original manufacturers, the people who unluckily bought these rapidly depreciating cars (a 2012 Fisker Kharma can now be bought for $50k), and the creditors… Especially the creditors. The only people that are still poised to make a profit are the Chinese. They fortunately purchased a company buried in debt that NEVER has to be paid back. But how are they going to make a profit off of a car that cost $600k to make? These are no Bugatti Veyrons. They have a 2 liter engine. They have been planning to put the Kharma back into production sometime in 2015. So we will see how the future plays out with these beautiful but unsellable cars.