Fisker Automotive had set the groundwork to

Fisker Automotive was an automobile manufacturer which set out to become the first and largest luxury plug-in vehicle manufacturer. Fisker received a loan from the Department of Energy for $528.7 million to develop a new eco-friendly plug-in vehicle.

Fisker designed a beautiful vehicle, called the Fisker Karma, and unveiled it at the 2008 North American International Auto Show with an expected delivery date to customers in 2012. Fisker established a relationship with dealerships, rather than opening their own, to funnel sales for their vehicle and were starting to scale relatively smoothly. Fisker built almost 2500 vehicles and delivered about 2000 of them to customers throughout 2012. The foundation for the company was set for a successful scale into market, however difficulties in manufacturing and vehicle reliability ultimately led to the company’s collapse. Fisker Automotive had set the groundwork to scale successfully into the luxury car market, however due to complications with their manufacturing the company ended up going bankrupt.

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Fisker Automotive used batteries manufactured by A123 Systems in their new Fisker Karma as it cut costs of manufacturing their own batteries. The batteries experienced a failure which put the new Fisker Karmas that were delivered to customers completely dead shortly after they received the cars. Unfortunately for Fisker, one of these faulty cars was sold to Consumer Reports, which seeks to educate consumers on new products. This brand new Fisker Karma had completely shut down and stopped working, right in the middle of the Consumer Reports’ office driveway, a devastating blow to Fisker’s reputation.

Videos and articles started to surface to millions of people of this beautiful $100k+ vehicle completely dead on a tow truck making its’ way back to a Fisker dealership. At this point Fisker was thrown two obstacles to overcome, on one side they had to recall all of these brand new vehicles for repairs to stop them from breaking down and on the other hand they had to deal with a new reputation of making an unreliable product. Issues continued to mount when Fisker’s entire European shipment of cars flooded in late 2012 during Hurricane Sandy, some of which caught fire and burned due to a circuit in the batteries, causing another $30 million in damages to the company. A123 Systems filed for bankruptcy in April of 2012 delivering another devastating blow to Fisker Automotive, and after defaulting on their government loans Fisker Automotive filed for Chapter 11 bankruptcy on Novermber 22, 2013. Fisker had set the right foundation for a successful launch by creating a product that was new to the market and garnering support from potential customers, but ultimately failed in scaling into market due to manufacturing faults. If I were to be in Fisker’s position I would scale in a different way. The primary reason Fisker failed is because of product failure.

I would have focused more of the companies time and resources towards quality control and testing to ensure the reliability of the product. Had they taken more time in testing the vehicles and the batteries they had been using I’m sure the reliability issues would have become evident much sooner and it would give them the opportunity to fix an issue before it spread rather than scrambling to fix a problem once it already damaged their company reputation and finances. Although it would have cost more money, Fisker did have the financial capability of developing their own batteries because of the large loan they had received from the Department of Energy. If I were in charge of the company I would have spent the money on developing our own batteries for the vehicles, which my company has control over, rather than going to another company to make the most crucial part of my product for me.


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