http://www.delawareonline.com/article/20110321/BUSINESS/103210339/-1/PluckPublicPhotoGallery/Analysts-doubting-Fisker-s-projections?odyssey=nav%7Chead
Delaware Online said:Fisker Automotive has big plans for Delaware. In a shuttered General Motors plant near Newport, Fisker hopes to produce 100,000 plug-in electric cars per year as early as 2013, employing up to 2,500 people in the process.
The administrations of President Barack Obama and Gov. Jack Markell have touted those plans as integral to rebuilding the nation's -- and Delaware's -- struggling economies, lending Fisker $550 million and anointing the company as an integral cog in Obama's strategy to put 1 million electric vehicles on U.S. roads in the next four years.
But even as Fisker's first car -- the $96,000 Karma sports sedan -- rolls off the assembly line in Finland today, automotive experts question whether the company can deliver on its lofty production goals.
Eight leading auto analysts say Fisker's plans to ramp up to 115,000 cars annually in the next few years are ultra-aggressive, bordering on wildly optimistic.
Market research firm JD Power and Associates forecast that Fisker will sell 54,000 cars globally in 2016. The firm's report does not include forecasts for Asian markets, where Fisker intends to sell 20 percent of its cars, but predicts that Fisker will not reach 60 percent of its sales projections in the U.S. and Europe.
"There are several manufacturers in a small market for plug-ins and electric vehicles. And Fisker is not a well-known brand," said Michael Omotoso, a global powertrain analyst at JD Power. "They're going to have a tough time selling as many vehicles as they hope at a fairly high price."
Fisker's Boxwood Road plant should reach full production capacity by 2014, according to the company. By that year, in the U.S., Fisker's products will be competing with electric cars from Toyota, Ford, General Motors, Nissan and Hyundai, says Boulder, Colo.-based Pike Research.
Fisker chief operating officer Bernhard "Barny" Koehler has said the company intends to build 100,000 cars in Delaware in 2013, and Fisker spokesman Roger Ormisher said the company stands by that goal. The company declined to discuss specific timelines or production and marketing strategies.
Fisker chairman Ray Lane, a managing partner with Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, an early Fisker investor, shrugged off analysts' predictions that Fisker would fall short of its targets.
"That's why analysts don't run companies," Lane said in an email.
Fisker still plans to start production on its second line of plug-in hybrids, the Nina, at the Boxwood Road plant starting late next year. It will be a sedan costing around $50,000, with two other models -- an SUV and a coupe -- to follow.
How lower-than-anticipated sales numbers would impact the Delaware work force is unclear, but Fisker says it may supplement its own output by producing vehicles under contract for other manufacturers.
IHS Automotive analyst Rebecca Lindland said Fisker would need two shifts of workers to build 100,000 cars. If numbers are lower, that would likely mean fewer workers.
Lindland called Fisker's plans "aggressive," given the newness of the plug-in hybrid concept, which has the car run on lithium-ion battery power for the first 50 miles, with a gas-powered generator kicking in to feed the battery for another 250 miles of range. The battery is recharged with a plug-in cord.
"The American consumer's appetite for alternative technologies is just not that large," Lindland said.
Sales forecasts from Pike Research place Fisker in the "other" category with brands such as Audi, Volkswagen, Fiat and Volvo, which Pike expects to trail major manufacturers in market share. Each of those "other" manufacturers is planning to introduce similar plug-in hybrids.
Fisker hopes to sell 15,000 Karmas annually starting next year. True electric vehicles, like Nissan's Leaf and Tesla's Roadster, rely on electric power alone.
Pike forecast that manufacturers in the "other" category will sell only 58,000 plug-in hybrids globally in 2014. Numbers are based on market reviews, consumer surveys and gas prices, as well as other factors, Pike analyst John Gartner said.
"For any startup, to go from zero to 100,000 sales of a brand-new vehicle is extremely challenging, bordering on the impossible," Gartner said.
Even established manufacturers are moving tepidly into the electric car market.
Take General Motors' $41,000 Chevrolet Volt, a plug-in hybrid. GM now is delivering only about 300 a month, though Gartner points out that logistical challenges -- building a new production line, for example, or distributing cars to a limited number of launch markets -- are presenting more significant challenges than demand.
"Right now, our plan this year is to produce 10,000 units, and we expect to sell every single one of them," said Rob Peterson, GM's Volt spokesman. The carmaker intends to increase production to 45,000 in 2012.
Fisker does have a financial incentive to meet its local employment targets. If the company invests $175 million in the Boxwood Road plant by 2015 and employs 2,500 people, Delaware's $12.5 million loan to the company does not have to be repaid. Delaware awarded a separate $9 million in grant form.
Alan Levin, director of the Delaware Economic Development Office, which offered Fisker the aid, said he is confident in the company's plans. Levin suggested that Fisker does not need to reach its production targets north of 100,000 to break even.
"Will they be profitable with less? I think so. I don't think that 100,000 was the be-all and end-all," Levin said.
