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US Government Seizes Fisker’s Cash Reserve

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 Weak Fisker: On April 11 the federal government seized $21 million from the company’s cash reserves. Image: Flickr/Fisker Auto

U.S. electric car pioneer Fisker Automotive once posted a manifesto on its Web site: “New isn’t easy.” Not for them, it wasn’t. Now their site is defunct and the company is scrambling to find a funder or face bankruptcy.

An electric car company buoyed by federal dollars in 2010, Fisker has now been crippled by supply chain and other problems, and joined legions of start-ups that get dragged down by technical glitches and financial woes. The capital backing from taxpayers caused a dustup that has kept Fisker in the limelight.

The greater question now is whether Fisker’s crash will have repercussions for the electric vehicle industry, which has seen some sales successes with Tesla’s Model S in recent months but largely remains unrealized.

Rewind to just a few years ago when the future for electric vehicles looked promising. In 2010 the Nissan Leaf and Chevrolet Volt hit the road. Gas prices were rising and Pres. Barack Obama pledged to put one million electric vehicles on the road by 2015. With climate change legislation on the table in Congress as well, the EV market seemed primed for an upswing.

Enter Fisker, whose electric sports sedan Karma rolled into showrooms in 2011 amid fanfareTIME listed it as one of the 50 best inventions of 2011. The Anaheim, Calif.–based company netted a $529 million government-backed loan to help fuel its efforts. In recent years it reportedly raised $1 billion more in private funds.

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But things started to fall apart. Its lone battery supplier, A123 Systems, floundered and eventually went bankrupt—a significant blow when as much as half of electric cars’ price tag comes from that piece of technology. Karma had to halt production. The U.S. Department of Energy (DoE) froze Fisker’s loan at $192 million in June 2011. A flawed cooling fan was also linked to a fire in 2012, prompting recalls.  In October Hurricane Sandy destroyed several hundred Karmas waiting for shipment at Port Newark, N.J. Fisker’s founder left last month, leaving the company to contemplate its next steps. This month it laid off the majority of its employees. It is also reportedly being sued by a Web designeran investor and some former employees.

And the hits keep on coming: On April 11 the federal government seized $21 million from the company’s cash reserves. Fisker did not respond to a request from Scientific American for comment on this story.

Republican lawmakers blasted the company at a House Subcommittee on Economic Growth, Job Creation and Regulatory Affairshearing on Wednesday, accusing Fisker of profiting from close connections with the Obama administration. But lawmakers saved most of their fire for the DoE, blaming it for continuing to dole out funds when some lawmakers believe there were early indications the company was not delivering on its product. “The real issue here…is the government shouldn’t be in this business of actually trying to be a venture capitalist. The government is a very poor venture capitalist,” said Rep. Patrick McHenry (R–N.C.). “We lose taxpayer dollars, and when we lose taxpayer dollars it outrages the public.” Armed with private e-mail correspondence House Republicans obtained between the company, DoE and related consultants, it tried to pin down who knew what and when.

Henrik Fisker, the company’s former chairman and founder, told House lawmakers that strategic financing at this stage could still allow the company to rebound. In any case, Fisker’s bevy of problems are unique to the company and do not reflect the electric vehicle landscape, says Alan Baum, a Michigan-based analyst specializing in the automotive industry. Start-up car companies—electric or not— often fail, he said.

The real next steps in the industry will come from the larger auto companies such as General Motors, Ford, Toyota, Nissan, Mercedes, Honda, Mitsubishi and BMW. “All those automakers I mentioned have vehicles in the pipeline that will debut in then next two or three years if they have not yet,” Baum says. “Major carmakers know with electric vehicles you can’t just sit on the sidelines.”

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Navigant Research predicted this month that a total of 21.9 million electric vehicles (both all-electric and plug-in hybrids) will be sold worldwide between 2012 and 2020Its forecasts suggest a fraction—368,000—will be sold in the U.S.; and only 107,000 would be all-electric vehicles (instead of plug-ins). That means that in seven years electric vehicles are expected to comprise only a sliver of the anticipated U.S. car market in 2020—roughly 2 percent, says Dave Hurst, a principal research analyst with Navigant. It will be an uphill climb, Navigant’s researchers expect about 71,800 electric vehicles to sell in the U.S. this year, 17,300 of which would be all-electric vehicles.

One issue is cost. Even with up to $7,500 in federal tax credits, electric vehicle prices can be steep. Without the credits, Karma’s sticker price was in the six-figures. Tesla’s top-of-the-line Model S costs $95,000. The Chevy Volt sells for about $40,000 and the Ford Fusion Energi rings in at $39,000. The price for the Nissan Leaf, which recently moved its manufacturing operations to the U.S., has dropped to around $29,000.

Finding an advanced battery that comes in the perfect package—high in energy density, small in size and lower in price—remains one of the largest hurdles to getting more electric vehicles on the road. “If we want to change things dramatically in the next 10 years we have to find a new material set—a new cathode–anode electrolyte set that will hopefully decrease the cost and increase energy density,” says Venkat Srinivasan, deputy director of the Joint Center for Energy Storage Research (JCESR). “If we can achieve that something dramatic would happen and significantly change the penetration curve.” JCESR, an “advanced battery hub,” was established in 2012 at DoE’s Argonne National Laboratory outside Chicago with the far-reaching goal of finding batteries with five times the current energy storage at one fifth the price in five years.

On the research side, federal loans from the Advanced Technology Vehicles Manufacturing Loan program (ATVM) have also supported other electric vehicle options, including Tesla, which received $465 million from DoE in 2010 and has said it expects to repay its loan five years early. Under this loan program, established under the George W. Bush administration, DoE also cut Ford a check for $5.9 billion to upgrade and modernize factories that produce vehicles including the Focus, Escape and Fusion. To Nissan, ATVM gave a loan for $1.4 billion to support the Leaf. And the Vehicle Production Group, LLC, received a $50-million loan to develop a wheelchair-accessible vehicle that will run on compressed natural gas. “To date, DoE has committed and closed five ATVM loans, totaling $8.4 billion, to auto manufacturers large and small who are adopting cutting-edge technologies and deploying them into the market,” Nicholas Whitcombe, former acting director of the ATVM program at DoE, told lawmakers Wednesday.

But the same problems continue to plague the electric vehicle industry year after year: the need for a battery that is long on power and short on cost; and a public that still feels uneasy about purchasing electric vehicles. So much of the future for electric vehicles also remains murky because it is difficult to predict gas prices. Navigant’s forecast for 2020 assumes that fuel prices continue to climb around 7 percent per year, electric vehicle costs come down and government incentives to buy electric vehicles stay in place for consumers. That’s a lot of what-ifs.

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In the coming years there may be a host of experimentation with electric vehicles—inclusive of testing different products under the hood but also different types of cars with more spacious backseats and trunk space. “Every major automaker is going to be offering one or several models, and they come in at different price points and configurations,” says Genevieve Cullen, vice president of the Electric Drive Transportation Association.

In Europe several companies have tried to lower the price of purchasing an electric vehicle by allowing consumers to buy the car but lease the battery. That has not yet caught on in the U.S. but smart USA plans to offer it to U.S customers for the first time when its smart fortwo Electric Drive is released in May. Whereas leasing batteries could lower risks and costs, consumers still might balk. “It’s like buying a car without an engine and then leasing the engine,” Navigant’s Hurst noted.

“It’s a fantastic idea in some ways,” JCESR’s Srinivasan says. “What you’re telling consumers is don’t worry about the battery and how long it will last and how much it will cost.”

Leasing batteries is just one business model approach, Cullen says. Some carmakers are also exploring how they could tap the batteries’ remaining energy once their life in the car is over, she said. “Diversity in the marketplace will be an enormous step in growing this market.”

Click here to view original web page at www.scientificamerican.com

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Tesla launches in India with Model Y, showing pricing will be biggest challenge

Tesla finally got its Model Y launched in India, but it will surely come at a price for consumers.

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Credit: Narendra Modi | X

Tesla has officially launched in India following years of delays, as it brought its Model Y to the market for the first time on Tuesday.

However, the launch showed that pricing is going to be its biggest challenge. The all-electric Model Y is priced significantly higher than in other major markets in which Tesla operates.

On Tuesday, Tesla’s Model Y went up for sale for 59,89,000 rupees for the Rear-Wheel Drive configuration, while the Long Range Rear-Wheel Drive was priced at 67,89,000.

This equates to $69,686 for the RWD and $78,994 for the Long Range RWD, a substantial markup compared to what these cars sell for in the United States.

Deliveries are currently scheduled for the third quarter, and it will be interesting to see how many units they can sell in the market at this price point.

The price includes tariffs and additional fees that are applied by the Indian government, which has aimed to work with foreign automakers to come to terms on lower duties that increase vehicle cost.

Tesla Model Y seen testing under wraps in India ahead of launch

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There is a chance that these duties will be removed, which would create a more stable and affordable pricing model for Tesla in the future. President Trump and Indian Prime Minister Narendra Modi continue to iron out those details.

Maharashtra Chief Minister Devendra Fadnavis said to reporters outside the company’s new outlet in the region (via Reuters):

“In the future, we wish to see R&D and manufacturing done in India, and I am sure at an appropriate stage, Tesla will think about it.”

It appears to be eerily similar to the same “game of chicken” Tesla played with Indian government officials for the past few years. Tesla has always wanted to enter India, but was unable to do so due to these import duties.

India wanted Tesla to commit to building a Gigafactory in the country, but Tesla wanted to test demand first.

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It seems this could be that demand test, and the duties are going to have a significant impact on what demand will actually be.

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Tesla ups Robotaxi fare price to another comical figure with service area expansion

Tesla upped its fare price for a Robotaxi ride from $4.20 to, you guessed it, $6.90.

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Credit: Tesla

Tesla has upped its fare price for the Robotaxi platform in Austin for the first time since its launch on June 22. The increase came on the same day that Tesla expanded its Service Area for the Robotaxi ride-hailing service, offering rides to a broader portion of the city.

The price is up from $4.20, a figure that many Tesla fans will find amusing, considering CEO Elon Musk has used that number, as well as ’69,’ as a light-hearted attempt at comedy over the past several years.

Musk confirmed yesterday that Tesla would up the price per ride from that $4.20 point to $6.90. Are we really surprised that is what the company decided on, as the expansion of the Service Area also took effect on Monday?

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The Service Area expansion was also somewhat of a joke too, especially considering the shape of the new region where the driverless service can travel.

I wrote yesterday about how it might be funny, but in reality, it is more of a message to competitors that Tesla can expand in Austin wherever it wants at any time.

Tesla’s Robotaxi expansion wasn’t a joke, it was a warning to competitors

It was only a matter of time before the Robotaxi platform would subject riders to a higher, flat fee for a ride. This is primarily due to two reasons: the size of the access program is increasing, and, more importantly, the service area is expanding in size.

Tesla has already surpassed Waymo in Austin in terms of its service area, which is roughly five square miles larger. Waymo launched driverless rides to the public back in March, while Tesla’s just became available to a small group in June. Tesla has already expanded it, allowing new members to hail a ride from a driverless Model Y nearly every day.

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The Robotaxi app is also becoming more robust as Tesla is adding new features with updates. It has already been updated on two occasions, with the most recent improvements being rolled out yesterday.

Tesla updates Robotaxi app with several big changes, including wider service area

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Tesla Model Y and Model 3 dominate U.S. EV sales despite headwinds

Tesla’s two mainstream vehicles accounted for more than 40% of all EVs sold in the United States in Q2 2025.

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Credit: Tesla Asia/X

Tesla’s Model Y and Model 3 remained the top-selling electric vehicles in the U.S. during Q2 2025, even as the broader EV market dipped 6.3% year-over-year. 

The Model Y logged 86,120 units sold, followed by the Model 3 at 48,803. This means that Tesla’s two mainstream vehicles accounted for 43% of all EVs sold in the United States during the second quarter, as per data from Cox Automotive.

Tesla leads amid tax credit uncertainty and a tough first half

Tesla’s performance in Q2 is notable given a series of hurdles earlier in the year. The company temporarily paused Model Y deliveries in Q1 as it transitioned to the production of the new Model Y, and its retail presence was hit by protests and vandalism tied to political backlash against CEO Elon Musk. The fallout carried into Q2, yet Tesla’s two mass-market vehicles still outsold the next eight EVs combined. 

Q2 marked just the third-ever YoY decline in quarterly EV sales, totaling 310,839 units. Electric vehicle sales, however, were still up 4.9% from Q1 and reached a record 607,089 units in the first half of 2025. Analysts also expect a surge in Q3 as buyers rush to qualify for federal EV tax credits before they expire on October 1, Cox Automotive noted in a post.

Legacy rivals gain ground, but Tesla holds its commanding lead

General Motors more than doubled its EV volume in the first half of 2025, selling over 78,000 units and boosting its EV market share to 12.9%. Chevrolet became the second-best-selling EV brand, pushing GM past Ford and Hyundai. Tesla, however, still retained a commanding 44.7% electric vehicle market share despite a 12% drop in in Q2 revenue, following a decline of almost 9% in Q1.

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Incentives reached record highs in Q2, averaging 14.8% of transaction prices, roughly $8,500 per vehicle. As government support winds down, the used EV market is also gaining momentum, with over 100,000 used EVs sold in Q2.

Q2 2025 Kelley Blue Book EV Sales Report by Simon Alvarez on Scribd

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