Electric car startup Fisker Automotive Inc said on Monday it has suspended work at its U.S. manufacturing plant and laid off 26 workers there while it renegotiates the terms of its $529 million loan from the U.S. Department of Energy.
The company has also let go about 40 workers, mostly engineering contractors, at its Anaheim, California headquarters, a spokesman said.
The company has received $193 million of the federal loan so far, it said in a statement. Most of those funds have supported the rollout of its first vehicle, a $102,000 plug-in hybrid sportscar called the Karma that was plagued with production delays and a recent recall.
Fisker's Wilmington, Delaware plant, a former General Motors Co (GM.N) factory, is expected to manufacture the company's second vehicle, a sedan known as the Nina. The $336 million balance of its DOE loan is intended to fund that car, Fisker said.
Fisker spokesman Roger Ormisher would not elaborate on the reasons it was seeking revised terms for its government loan, but a DOE spokesman cited delays in getting the Karma to market.
Our loan guarantees have strict conditions in place to protect taxpayers. The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results, DOE spokesman Damien LaVera said.
The Department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America.
Energy Department loans and loan guarantees have been under heightened scrutiny from lawmakers since solar panel company Solyndra filed for bankruptcy in September after receiving a $535 million government loan in 2009.
Last month, Fisker ratcheted down its sales projections for 2012, saying it expected to sell about 10,000 Karmas. It had originally hoped to sell 15,000 vehicles.
Fisker is still aiming to begin production of the Nina in 2013, Ormisher said, though he said the company would give an exact timeline once it restarts work at the Delaware plant.
In addition to the federal loan, Fisker has raised more than $850 million from private investors including Kleiner Perkins Caufield & Byers, Advanced Equities and Qatar Investment Authority. That includes $260 million raised late last year, Fisker said.
The fledgling automaker was founded in 2007 by Henrik Fisker, a onetime Aston Martin designer.
The company is one of a slew of automakers betting heavily on hybrids and pure electric vehicles. Major carmakers including GM and Nissan Motor Co Ltd (7201.T) already have electric cars on the road, though the push for greener cars has also ushered in a host of venture-backed startups like Fisker and Tesla Motors Inc (TSLA.O).