Electric Car Start-Up Gets More Funding

By ALEX P. KELLOGG
Auto makers continue to push ahead with battery-powered cars despite waning demand for fuel-efficient vehicles.
On Monday, Fisker Automotive Inc. said it received $85 million in additional venture capital that will help the 18-month-old California start-up begin producing the Karma luxury sports car it has been developing.

Chrysler said it selected A123 Systems to supply the batteries for electric cars it is developing, including the Dodge Circuit shown above. The news came the same day Fisker Automotive said it won $85 million in funding.

Fisker hopes to sell 15,000 Karmas in 2010, and plans to show the car at the New York Auto Show starting this week.
Separately, Chrysler LLC selected A123 Systems Inc. of Watertown, Mass., to supply lithium-ion battery cells, packs and modules for electric cars that Chrysler expects to have in showrooms in late 2010.
The potential sales of such vehicles is unclear, however. With gasoline going for a little over $2 a gallon, sales of high-mileage vehicles and gas-electric hybrids have plunged.
In March, Toyota Motor Corp. sold 8,924 Prius hybrids, down 57% from a year ago, according to Autodata Corp. It had planned to build Priuses in a new plant in Mississippi but has frozen the project indefinitely. General Motors Corp., meantime, sold just 547 hybrid versions of the Chevrolet Malibu in March.
Last week, in an assessment of GM, the Treasury Department's auto task force expressed concern about the Chevrolet Volt, an electric vehicle GM is developing. While the Volt "holds promise," the task force said, it will probably be much more expensive to make than gasoline-powered cars and need substantial cost reductions to be "commercially viable."
Henrik Fisker, chief executive of Fisker Automotive, said in an interview that the new round of capital signals "that plug-in hybrids really have the mass-market potential that people have been waiting for."

The capital will come from Eco-Drive (Capital) Partners LLC, an investment consortium, and Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm. The company says it now has funding well over $100 million but declined to be specific.
The Fisker Karma is a sleek sports car that is supposed to start at $87,900 and travel 50 miles on electrical power and for an additional 250 miles on a 2.0-liter gasoline engine before requiring refueling. The Irvine, Calif., company has orders for 1,300 vehicles, Mr. Fisker said.
"I definitely believe the plug-in hybrids will be the dominant alternative type of vehicle in the next five to six years," Mr. Fisker said, "and we feel we can actually take the lead in this new technology."
Chrysler is aiming for a similar spot in the market with the Dodge Circuit sports car. It also is working on battery-powered versions of the Jeep Wrangler, Jeep Patriot and Chrysler Town & Country minivan.
Lou Rhodes, president of the Chrysler ENVI unit working on the electric models, acknowledged the models are unlikely to help the company reach profitability in the short term. But he said getting started in this area is critical to be viable long term. The objective, he said, "is for Chrysler to be a leader in electric vehicles."
Chrysler is leaning heavily on partners. Electrical components and some design for the Circuit will come from Britain's Lotus. Mr. Rhodes declined to say who is building other key components such as the control unit or motor.
Write to Alex P. Kellogg at alex.kellogg@wsj.com