Bloomberg News

Fisker to Fix Software That Led to Consumer Reports Failure

March 15, 2012

Fisker Automotive Inc., the maker of plug-in luxury sports cars, said it’s developing a software fix for a problem that led its Karma model to shut down during testing by Consumer Reports.

The magazine, published by Yonkers, New York-based Consumers Union, said March 8 the rechargeable Fisker model purchased for evaluation failed during tests on its Connecticut track after 180 miles (290 kilometers). Tom LaSorda, who became Fisker’s chief executive officer last month, said the shutdown showed the vehicle performed as intended in the event of an electrical glitch.

“The on-board diagnostics detected a fault and entered a protection mode that shut the car down to protect other components,” LaSorda said in a statement on Fisker’s website this week. “New software has been developed and installed in a large fleet of vehicles and they are being driven round the clock for testing and validation. As soon as this procedure is complete we will send updated software out.”

The magazine’s report was the latest challenge for the Anaheim, California-based startup that seeks to become a profitable maker of premium plug-in cars powered by a combination of batteries and gasoline. Fisker on Feb. 6 said it stopped working on its Wilmington, Delaware, plant after the U.S. Energy Department blocked access to a federal loan, citing unmet milestones. The factory was slated to build a second model.

Late last year, Fisker recalled 239 Karmas to fix a flaw related to battery packs supplied by A123 Systems Inc. (AONE) It has delivered about 500 of the cars to customers mainly in the U.S. and produced about 2,000, said Roger Ormisher, a company spokesman.

Blog Reports

Separately, Fisker today denied a report it began delivering Karmas before the car was ready for retail customers.

The San Francisco Chronicle this week reported that four of five Karmas shipped to a dealership in Marin County, California, experienced software glitches “almost immediately,” citing the store’s manager.

“A number of blogs and media websites have recently published (and repeated) several false and misleading statements and allegations that Fisker Automotive rushed its Karma sedan to market even though it was not properly developed in order to meet certain milestones related to Fisker’s Department of Energy loan,” the company said in a statement. “Those allegations are absolutely untrue.”

Chrysler Veteran

LaSorda, an auto-industry veteran who was a president of the predecessor of Chrysler Group LLC, said he’s working to solve any issues with Karma.

“I have put in place a ‘SWAT team’ with over 50 dedicated engineers and other consulting professionals to help identify this and other unique customer issues with the Karma,” LaSorda said. “I am personally involved in all these initiatives and am committed to delivering complete customer satisfaction and peace of mind.”

David Champion, head of the magazine’s auto-testing center, said he received “a number of calls” from LaSorda about the car that failed while being driven by a Consumer Reports technician.

Expensive Car

The $107,000 Karma was the most expensive vehicle Consumer Reports has ever bought, Champion told reporters in Washington on March 12 in Washington. The magazine, which accepts no advertising, purchases all the cars it tests and sells them after it’s done with the evaluations.

Fisker was founded by auto designer Henrik Fisker and awarded Energy Department loans of as much as $529 million in April 2010 from a program intended to spur development of advanced-technology vehicles. About $170 million of those funds were for U.S. engineering work on the Karma, and about $360 million for production of the Nina, the car Fisker intends to eventually build in Delaware.

Fisker, which is closely held, has drawn $193 million from the loans and raised about $900 million in private capital.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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