ABG: Let's start with a general discussion about the show. Fisker doesn't go to every show, but LA seems to be an important market and it's close to home. What are you here to show, anything new?
Fisker: Obviously, this is the home market. One of the interesting things about the Los Angeles show is it's very much a customer show, so there are a lot of customers here. I don't necessarily think you need to have something new. The Karma is still new to a lot of people. There are a lot of people who come up and ask, "What's that? I've never heard about it. Explain it." So, that's why we're still building the brand. We have to be in the places, specifically where there are lots of customers.ABG: I was talking to Fisker representatives at earlier shows, and even though the Atlantic was shown off at a private event in New York, your focus is still on the Karma and trying to get those sold, right?
Fisker: We just don't want to over-focus on the Atlantic because it is our next car and it's not sale yet so it doens't make sense to go out and promote it at this time. I think we want to focus on the Karma, absolutely.
ABG: Speaking of concentrating on the Karma. How many have been built, how many have been sold?Fisker: We have sold close to 2,000 cars now, I think a little over 2,000 wholesale. I think we have been quite successful, actually. Everything has to be put into relation. You can either put it into relation to a plan we did five years ago and say, well, all right, we had higher hopes. Actually, I think the entire car industry, whether you made a gasoline car or a diesel car or an electric car or an electric car with a range extender, had higher hopes for sales. But I think, if you put [2,000 sales] in relation to our latest business plan, then we are fulfilling that business plan in terms of sales numbers this year. And, when you put it in relation to other, historical brands, take Maserati with the Quattroporte, I think we have sold about as many as they have since the beginning of this year. So, I think, being a completely new brand that is unknown to 99.9 percent of the earth's population, and we're stil only in the US and European markets, having sold a couple thousand cars, I think we've done really well. I'm starting, when I drive home from Anaheim to Los Angeles, to see, once in a while, Karmas on the street, and that's a great feeling. So, we're feeling really good, we're feeling really optimistic. We had a great launch in Dubai, we're going to go into China next year so we're excited.
ABG: So, you've sold over 2,000, how many have been built.
Fisker: A little bit more than that. I don't have the exact number and I'd rather not give you a number because it's probably the wrong one.
ABG: But there are some people waiting for deliveries?
Fisker: Yeah. We have cars in the pipeline. We did lose 300, as you know, in the storm.Fisker: We were a little shocked. I think it was 15,000 cars that were lost, Volvos and Toyotas and us and one of our cars caught on fire and wiped out another 16. So, there was a weird feeling, having brand-new cars standing in five feet of water for 24 hours. Basically, they're done. Our biggest concern, quite frankly, was making sure they all get crushed because we don't want any of these to somehow get out.
ABG: What are you doing to make sure these get crushed?
Fisker: We have a company that takes care of that and I think the insurer and all the car companies are watching.
ABG: Have they all already been crushed or is there a process?
Fisker: There is a process. I believe they take out the batteries and dispose of them separately and all that type of stuff.
ABG: Speaking of the fire, when you hear about one of these fire instances, what is the feeling that you have? Is it, "oh, another one?" because you know the media is going to turn it into something.Fisker: You know, when you're in the heat of the moment, it is, I have to say honestly, I felt like the first six months of this year [2012], every time you saw one problem, there was another one coming. Then came the Presidential debates. It just didn't stop. I do have to say, I never thought I would have to go through so many obstacles to get a car on the road and get to where we are today. In hindsight, when I look back now at the first six months of the car being built, I would say it really, when you compare it to what other car companies go through, it wasn't, actually, that extra ordinary, except maybe the political part. Whether it's Toyota or Honda, everybody has recalls, everybody has issues and the difference with us was, of course that you have a microscope on you because you're a new company and we've had a lot of naysayers. I've had to live with this for four years, so I have a thick skin. For the first three years, before we launched the car, everybody writing in the blogs and media that we're not going to make it, it's vaporware, they're never going to have the car. When you hear that every week, you almost get stronger and you want to prove people wrong. Now we're sitting here, the car's been on the market for almost a year, we've sold 2,000 cars so I think we've proved the naysayers wrong. It seems to be slightly more interesting to write about Fisker because there might be something mysterious. If there's a fan that has a fire, it's a lot more mysterious than if it happens in a Toyota. So there's some excitement around there and in a normal environment that wouldn't necessarily be a big issue, but it's different when you're building a brand from scratch and, let's say, 80 percent of your news is coming from that side, it's very difficult. Wheraas obviously Toyota or somebody has hundreds of millions of dollars to make ads so that when you write something about that [a fire, say], it disappears and never even comes up because there's another 100 things coming out. So, it's a big obstacle and it feels tough. On the other hand, you can't give up. You've got to keep pushing forward.Fisker: I did expect we would have challenges because every launch that I've been a part of, whether it was with BMW, Aston Martin or Ford, there were always challenges. There is always something technical that goes wrong and has to get improved and you discover things and you have to go back to the factory. That's why you have a launch team at the factory. So, that was not the surprising part. I think, for me, the two things I didn't expect were, sometimes, the overly negative media that were sometimes very politically biased. That I didn't expect and how could you expect that? And the speculation about our viability even though, I think, we might be among the ten companies in the world that has ever raised so much equity. And, even though we raised all the equity that we missed from the DOE loan, nobody seemed to want to hear that and there was all this negative "oh, they didn't get the DOE loans so they're not going to make it." We haven't had the DOE loan as part of our business model for a year, or even 18 months now. Those are the type of things that I felt were very unfortunate that we have to be part of that political thing. Like I said before, you can't cry over spilt milk and you can't give up. We have a team that I think is more hardcore and thicker skinned than any automotive team in the world. I remember coming into a back room where it looked like one of those scenes in the movies where they have the boiler room and everybody's sweaty and there was Roger [Ormisher] and his two PR guys, and he's been like this a couple times. But it also creates some excitement because then when you beat the odds, you feel extra good. And I think we're beating the odds. I'm sure some people have put a million-to-one that we were not going to make it but we're here today, we're alive, we have money in the bank, we're selling cars and we're expanding the market.Fisker: There's nothing for us about how long you can hold out, I think. Why would you ask car company how long they can hold out? Of course there can be doomsday scenarios that can happen – suddenly our whole factory blows up in Finland, whatever – but as long as things are moving the way they are moving, I think we have a big advantage that our vehicles are already ready for some of the things that are happening in the future, whether that's higher taxes in Europe on CO2 emissions, whether it's 2025 fuel economy standards – we are the only luxury car with a gasoline engine that fulfills these standards. Forget electric cars, because of course they do. But we have a gasoline engine and still we fulfill the 2025 fuel economy standards. So, we're already there. I think the Atlantic is a vehicle that is going to be so well-fitted into the time because it's not only about the environment but about saving running costs and still you have to give nothing up in terms of owning this vehicle. So, I think we are very well prepared for the future. The third part is that you have to remember we're not yet in all our markets. We have a car that is designed for the world. We have certified it for the world, in all countries, meaning in Europe, China, the Middle East and the US. We have just launched in the Middle East and, actually, we have had great reception. The Middle East group have already ordered over 75 cars. If I had said to somebody "we're going to sell an electric vehicle with extended-range, and it's all green, and it's American, and we're going to sell that in the Middle East," everybody would have laughed five years ago. But the fact is, we're there today. I saw people loving the fact that it's a new technology, it's a hot gadget, it looks cool and there were also people saying, "You know, I would like to have an environmentally friendly car even if I live in Dubai because I'd still like my children to run around and breathe good air." So, I think we're at the right place. China is still open to us. I think that's going to be a huge market for us, so I see the future as being very bright.ABG: Shifting topics a little bit, but staying with the idea of how customers come into the brand, there have been a lot of celebrities who have gotten your cars and done... interesting things with them. Do you think this attention has been good?
In deep with Henrik Fisker: Despite floods and fires, "I think we're beating the odds"
Fisker: I think it's all been good because at the end of the day, we have to build our brand. All of us grew up knowing what a Ford and a BMW and a Mercedes was. Now, people haven't grown up knowing what a Fisker is and there are still so many people who don't know what a Fisker is. I've met many people that say, "Oh yeah, I heard the name with Justin Bieber or Leonardo DiCaprio or Ashton Kutcher or something like that. I don't think that because a celebrity has the car people are going to but it or that they don't buy it, but I think it has helped us because it has created some awareness about the brand.
ABG: Have you talked about advertising campaigns with Leonardo DiCaprio or anyone?Fisker: We probably wouldn't do any advertising with Leonardo DiCaprio because I don't know that it's a great idea to do advertising with celebrities, that old-fashioned style. Also, we are a small company so we don't have giant marketing budgets, so we are tying to save our time until we really need them. It won't be elaborate because we just don't have those budgets. We are looking into some more innovative ways of doing marketing, we are trying to think how can we be different, because we can't tackle a Mercedes, for example, head on, so what else can we do? Well, if you own a Mercedes, you can't go have dinner with Mr. Benz, because he isn't around any more. But you can have dinner with Henrik, maybe, at some special events we're doing. Even with our current customers, because we see them as brand ambassadors, I have had dinner or breakfast with at least 500 of them, all over the world. That's a quarter, that's quite a lot. That's something they couldn't do with any other car company. It's great because they appreciate it and it's unique and it's something they couldn't do with any other car company and they become strong advocates for the brand and I get great feedback. Just as one example, you can say what you want about how the Europeans or the EPA measures fuel economy, but we have the facts, the facts of how Fisker Karma owners drive the car. The average is 150 miles a gallon [not counting electricity]. That is a fact. And we have customers who drive 3,000 to 4,000 miles before they fill up.ABG: There's a 45-minute video online from a Karma owner who talks about the problems with the infotainment screen. Have you watched that, personally?Fisker: Look, I think I saw some of that, and I think it's quite old now. I think that's even before the first upgrade was put into the car. Is our system as fast as I would like it? No. On the other hand, once you drive the car – any car – for a certain amount of time, you get used to it. Part of our customer feedback is that you improve. I think we've had four upgrades since we launched it. For me, when you introduce new technology, there are always learning phases and what I'm most astonished by is that our powertrain has really performed amazingly and the feedback we get from our customers is amazing. Does the infotainment system need some improvement? Yes, sure. We'll improve it. Everyone would like the navigation to be like an iPad. But there is no car in the world that is like an iPad, because you can't make it that fast in a car. Our car has 32 computers in it and they all have to get into the system and they all have diagnostics going back and forth so there is an immense amount of technology in this vehicle, so it can't work like an iPad ... yet. However, as soon as we are able to get to that point we'll be as fast as anybody trying to adopt it.In deep with Henrik Fisker: Despite floods and fires, "I think we're beating the odds"
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