Henrik Fisker resigned Wednesday from the electric vehicle company he started. Can Fisker Automotive bounce back without him?
Attendees at the Frankfurt Auto Show check out the Fisker Karma in October 2011.
When Fisker Automotive announced Wednesday that founder Henrik Fisker would be resigning as chairman, plenty of people wondered whether the move was just the latest nail in the struggling electric car start-up's coffin. But while a founder's abrupt departure is rarely a sign of strength (see also, Groupon), it isn't unprecedented in the world of next-generation cars. Martin Eberhard of Tesla, Kevin Czinger of CODA, and Shai Agassi of Better Place, have all left the companies they once ran.
And in Fisker's case, a parting of ways might well have been necessary to move the company forward.
It's clear that Fisker made some enemies since launching in 2007. "Henrik has a certain amount of arrogance that he designs pretty cars and, therefore, can do the rest," Chelsea Sexton, co-founder of the electric vehicle advocacy group Plug in America, says. "He didn’t do himself or the company the most favors in terms of how out of touch he could be."
In a statment to Inc., Fisker responded, "I am proud of having founded Fisker Automotive and of bringing Fisker Karma, the first luxury plug-in hybrid, to market. People tend to forget that the Fisker Karma is the only electric or plug-in hybrid car sold on four continents, no matter what weather conditions, from Dubai to Norway. This and many award wining achievements shows how amazing the small Fisker Automotive team has performed."
Thilo Koslowski, an analyst at Gartner told the Los Angeles Times that while Fisker was the "soul" of the start-up, his resignation could give the company "the opportunity to reemerge as a stronger albeit different brand going forward, if new investors can be found and if they make a significant commitment to the longevity of the brand."
Before starting the company, Henrik Fisker had a successful career as a designer for Aston Martin and BMW. When he started Fisker Automotive in 2007, his goal was to build "beautiful, exciting, fast, environmentally friendly cars." The company attracted investments from the likes of Kleiner Perkins, and by 2011, was valued at $1 billion.
But in recent years, it has fallen on hard times. In May 2011, the Department of Energy froze what was left of a $528.7 million loan after Fisker failed to meet its milestones. A year and a half later, its chief battery supplier A123 Systems filed for bankruptcy. Last month, Reuters reported that a Chinese holding company had bid around $200 million to acquire a majority stake in the company. Then came the news that Fisker, himself, was resigning due to "several major disagreements" with senior management.
One problem that Fisker shares with other electric vehicle start-ups, Sexton claims, is lack of experience on the management team. "The two most underutilized groups are the industry veterans, who have been working on deploying electric vehicles for the last 20 years, and the first generation of drivers," she says.
Henrik Fisker, to be sure, designed a great looking car, but he then outsourced the battery production to another young company, A123 Systems, creating a dangerously co-dependent relationship between two fledgling companies. When A123 Systems filed for bankruptcy, Fisker's fortunes began to crumble in earnest.
Tesla, by contrast, was more careful about outsourcing key components, Sexton says. "Tesla was proprietary about their drive train, and still are, which is why other companies are now going to them for pieces of the drive train," Sexton says. "I don't think there was an assumption that Tesla was going to succeed, but they recruited a couple of old electric vehicle veterans and engineers we respect and had faith in."
The Future Without the Founder
Fisker clearly had premonitions of trouble. In an interview with Inc.'s Jeremy Quittner last year, Fisker said: "It is very exciting, in the early days, to have the chaos and excitement and innovation and everyone out everywhere in the company, everyone wearing all the hats, but there is a time when that does not work, and the chaos becomes nonproductive." Fisker finally brought on former Chrysler CEO Tom LaSorda to replace himself as CEO. LaSorda was then replaced in August by another industry vet, Tony Posawatz, who developed the Chevrolet Volt.
Fisker's resignation, of course, is no guarantee that the company is destined for a rebound. After several battery fires, the cars' reputation for quality is in tatters, and Sexton says management has lots of work to do to win back support from the electric vehicle community.
The one silver lining: Getting that support might be easier without Fisker at the helm.
This story was updated on March 14 at 7:36pm EDT to eliminate some unverified commentary and to add Fisker's statement.