In its latest bid to help finance the car of tomorrow, the Obama administration said it would lend more than $500 million to Irvine-based Fisker Automotive Inc. to develop a pair of plug-in hybrids.
The loans, announced Tuesday, come from a $25-billion Department of Energy program to fund development of alternative vehicles. According to the administration, the funding will help create or save 5,000 jobs at Fisker and its suppliers.
The $528.7-million low-interest loan "is another critical step in making sure we are positioned to compete for the clean-energy jobs of the future," Energy Secretary Steven Chu said. Over the summer, the department lent $8 billion to a variety of other automakers and suppliers under the same program.
The loans to Fisker are sure to spur the rivalry between it and Tesla Motors Inc., maker of a $109,000 all-electric sports coupe called the Roadster. Tesla, based in San Carlos, Calif., was awarded $465 million in Energy Department loans in June, primarily to build its second all-electric car, a sub-$50,000 sedan, in California.
Fisker plans to use $169.3 million of its loan to finish development and production of its $87,900 plug-in hybrid sedan, the Karma. That car will not be built in the U.S. Instead, Fisker is contracting Valmet Automotive Inc., a Finland-based company, to assemble the Karma. Still, the Energy Department estimates that 65% of the vehicle's parts will come from U.S. suppliers.
Fisker will use the majority of the loan funds to develop its next-generation vehicle, called Project Nina: a "family-oriented, user-friendly" plug-in that would be built in the U.S. and cost $47,400. The automaker hopes to sell 75,000 to 100,000 of the cars per year, starting in 2012. Fisker has not yet announced a location for its U.S. production facility, although it does have an engineering office in Pontiac, Mich.
"This conditional loan represents a significant step in America's future," said Henrik Fisker, the automaker's chief executive, saying it would "help restore the U.S. as an auto industry leader."
A release date for the Karma, originally set to come out late this year, has been pushed back twice: first to next spring and now, according to Fisker, next summer.
Tesla began delivering its Roadsters early last year, and more than 500 have sold to date. The vehicle has a range of about 220 miles on a single charge.
The Roadster is assembled in England under contract by automaker Lotus. Tesla plans to build a battery factory in the Bay Area as well as an auto assembly plant in the Los Angeles area, where production of the Model S would begin in late 2011, but no final sites have been announced yet.
Although a variety of new technologies are being considered for future generations of cars, no clear winner has emerged.
Whereas vehicles such as the Roadster run on battery power alone, Fisker's plug-in hybrids have both electric motors and gasoline engines on board and use them in concert. Because plug-ins have far larger batteries than hybrids such as the Toyota Prius and can be charged using an electrical outlet, they have the potential to be considerably more fuel-efficient.
Several other automakers, including General Motors Co., are developing similar plug-in technology, but none have come to market yet in the U.S.