Departures

Battle of the Eco-Friendly Sports Cars

How the Fisker Karma has trumped the Tesla Roadster.

The Karma concept car from Fisker Automotive
The Karma concept car from Fisker Automotive

FABRICE COFFRINI/AFP/Getty Images

This piece is reprinted from Departures.

Making one of his first public appearances since Maidgate, former governor Arnold Schwarzenegger is cooing over the new Fisker Karma plug-in electric hybrid sports car on the concept lawn at the Pebble Beach Concours d’Elegance, the auto show held every August in California. Aside from the record-breaking $16.4 million sale of a 1957 Ferrari Testa Rossa, Ahhnold is the talk of the show, and not for his affair to remember. The love child on the lips of the fans and photographers surrounding him has 403 horsepower and a 22-kilowatt lithium ion battery and goes from zero to 60 in less than six seconds. Long a car enthusiast, Schwarzenegger bought the original all-electric sports car, the Tesla Roadster, fresh off the shelf in 2008. (Rumor is that he tried to return it nine months later—he found it too small for his towering frame.) Here, hovering over the latest superstar of the electric-car universe, he is just one of the many celebrities on the sidelines of the drag race between Fisker and Tesla that’s revving up this year.

When Toyota released the Prius, its hatchback hybrid, more than a decade ago, wealthy ecochic communities across the country seized on it as an understated status symbol. That is, until something sleeker came along. With the launch of the Tesla Roadster, the brainchild of PayPal cofounder Elon Musk, in 2006, there was suddenly a car cleaner than the Prius, with the speed of a Ferrari. “The sports car guilt went away,” says Tesla vice president of marketing and communications Ricardo Reyes. “You’re driving down the highway getting a thumbs-up from people in both Priuses and Ferraris.” Tesla’s success spurred other automakers, from Chevrolet to Nissan, to get into the electric-car game. But none of these spin-offs has caused as much stir as the Karma, the new hybrid sports car from Fisker Automotive, whose cofounder, Henrik Fisker, a former Aston Martin and BMW designer, has come to challenge Tesla on its own turf.

While the price of the Prius ranges from $23,500 to $28,800, Tesla’s Roadster and the Fisker Karma run neck and neck, averaging $100,000 and appealing to the very same market. Both companies are run by foreign-born entrepreneurs, and both have received government recognition for their environmental efforts—in 2009 the Department of Energy loaned them a combined total of $1 billion.

Added to the already stiff competition is the bad blood between the two companies, who were embroiled in a bitter lawsuit. It all started in Tesla’s development days, when the company paid Henrik Fisker $875,000 to come up with body designs. Soon after, he started his own electric-car company with models Tesla found eerily similar to theirs. The case was resolved in arbitration, but Reyes says that the joke around Tesla has since been “Fisker ran off with our blueprints.” Fisker only says, “I was a consultant at Tesla,” before taking a dig at his former employer. “If you want to sacrifice and say, ‘I can live with pure electric,’ then fine,” he says, differentiating the Roadster, which needs to recharge after 245 miles, from the Karma, which has a fuel cell range extender that kicks in after 50 miles.

Whatever happened in those early days, the cars are distinct enough that celebrity owners have started making trades, perhaps because they found the Tesla’s short range too inconvenient, or because they simply wanted the shiniest, newest thing. The week before the Pebble Beach Concours d’Elegance, Leonardo DiCaprio, a former Tesla owner, had taken delivery of the very first Fisker Karma. Al Gore, Colin Powell, and the prince of Denmark were scheduled to receive theirs in the next few days.

On an overcast Sunday at Pebble Beach, Schwarzenegger walks around the shining black Karma. “It’s very effeeecient,” he says admiringly as a crowd forms to take pictures of him peering over the car’s solar-panel roof. “I liiiike it,” he adds. “It’s very good for the environment.”

Along with Schwarzenegger, George Clooney and a host of newly minted Silicon Valley millionaires also bought Tesla Roadsters when the car was released in 2008. With its entirely new all-electric mechanics, the car appealed to a specific demographic: wealthy, eco-friendly, and fascinated by the latest technology. The electric motor provides instant torque, meaning the car can go from zero to 60 miles per hour in 3.7 seconds. “It’s kind of like flipping on the switch in your bedroom,” says Reyes. Starting the company was a different story, however. In 2007, three years after its launch, Tesla came close to crashing. It turned out the cost of building each car was more than double the $65,000 Musk had anticipated. He had already sunk $100 million—including much of his personal wealth—into the company, and it was losing money. After scrambling to restructure management and borrowing from his brother, he managed to turn things around by the end of 2008 through partnerships with Daimler and later Toyota. The first run of the Roadster was in such demand that Tesla’s IPO last year raised $226 million.

Much of those funds have gone toward the development of the Model S, a family sedan that can hold seven people and travel longer on electricity—up to 300 miles. It comes with in-car 3G wireless connectivity and a 17-inch flat-screen navigation console, not to mention a $7,500 tax credit. The car will cost about half as much as the Roadster, and so far, the first 6,000 have already been reserved. Even Musk has said, “Frankly, the number of cars reserved in the first week has exceeded our optimistic internal projections.”

With Tesla sitting out this year’s Pebble Beach Concours d’Elegance to focus on building the Model S, Fisker was, for the first time, presenting its eco–sports car unrivaled. Founded in 2007, Fisker Automotive debuted the Karma at the 2008 North American International Auto Show in Detroit. The initial run was scheduled for late 2009, but Fisker missed that deadline and then rescheduled it half a dozen times. The delays only served to amp up the buzz among electric-car enthusiasts. Rumors flew about what features the Karma would have, and the anticipatory hype turned into 3,000 orders and counting. The Karma is now sold out through spring 2012.

Instead of naming Tesla as his competition, Fisker compares his car to the Aston Martin or the Mercedes-Benz CLS-Class. “Aston Martins are $240,000, though,” he points out, standing on the concept lawn at Pebble Beach in a tan jacket and slacks. Walking around the Karma with his CFO, Fisker claims to be unfazed by Tesla, whose all-electric model he finds to be limited. “Tesla produces a purely electric two-seater,” he says. “The Fisker Karma has four seats and unlimited range.” Fisker hopes his customers will use his car as their primary vehicle rather than just a plug-in toy for the weekends. “It’s really the future of where cars are going,” he says.

Whatever the future of Fisker, some Roadster drivers are starting to put Tesla in their past. While Tesla’s Reyes says the company doesn’t have resale numbers yet, many buyers of the signature series have started putting them up for auction. Tesla driver Carl Quinn, a former Google employee currently at Netflix, says he has at least one friend selling off an original Roadster but waiting to buy the new Model S. Whether Tesla’s Model S outruns Fisker remains to be seen. But while the cars of tomorrow battle it out, the flavor du jour is anyone’s guess.

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