CARB Chief Unfazed by Fisker’s Struggles

DETROIT – California-based Fisker is on the brink of bankruptcy, has lost its founder and dismissed most of its workers, but the head of the California Air Resources Board says the upstart electric-vehicle maker’s financial problems do not spell doom for the EV market overall.

“I have no inside knowledge of Fisker and what happened there,” CARB Chairman Mary Nichols tells journalists after giving a keynote speech at the 2013 SAE World Congress.

“I remember visiting them early on when they were opening their first sales office in Southern California and thinking, ‘Well, this is a bold attempt,’” she says of the plan to market the stylish Karma extended-range EV priced above $100,000.

“I could perhaps critique some of the decisions they made,” Nichols adds. “It doesn’t seem to have worked out as they hoped it would.”

If Fisker fails, it would be the latest in a long line of independent automotive startups that attempted in vain over the course of decades to challenge established auto makers with deeper pockets and more stamina.

“Do you have any idea how hard it is to start an auto company from scratch?” Nichols asks. “We’ve all seen the movie. Look, there is not an easy, clear path forward. We understand that.”

Fisker’s experience reinforces her belief that EV manufacturers will consolidate.

“It’s the large companies that can do the research and development, support the marketing of their products and have the staying power,” Nichols says.

“But interesting partnerships are also developing between some of these new startups and some of the more-established companies where they can collaborate on some aspects of their technology, and that’s a very healthy thing.”

For instance, EV producer Tesla supplies batteries for Daimler’s Smart Electric Drive and helped develop Toyota’s RAV4 EV.

Nichols also praises Tesla, which markets an all-electric Roadster and 4-door Model S, for not only understanding California’s zero-emissions vehicle program but also capitalizing on it.

 “They figured out how to create a lot of credit so they have something of value they can sell to other companies, whether or not they actually merge or do joint ventures or license (technology) or whatever,” she says. “They have a way to get some revenue coming in as a result of their very advanced technology vehicle.”

The diverging paths for Tesla and Fisker illustrate the economic Darwinism at play. “That’s the great thing about our economy,” Nichols says. “It’s really open to startups and not all of them succeed, but some do. The point is: Technology is continuing to develop.”

At the less-expensive end of the market, the Nissan Leaf and Chevrolet Volt are selling briskly in California, largely based on word-of-mouth.

“I remember distinctly when in my neighborhood in West L.A., all of a sudden you looked around and every other car that was parked in front of someone’s house was a (Toyota) Prius,” she says. “Well, we’re starting to see the same thing now – not on the same scale, but we are seeing that kind of concentration building outward.”

Nichols is eager to see more EVs on California roadways because that will signal the inevitable growth in charging infrastructure at residential garages and in workplace parking decks.

California Gov. Jerry Brown has issued an executive order requiring 1.5 million zero-emissions vehicles on state roads by 2025.

CARB estimates that as of March California had 15,000 battery-electric and fuel-cell zero-emissions vehicles on the road. Add plug-in hybrids such as the Volt and Ford C-Max Energi, and the figure doubles to about 30,000 units.

“But the sales are increasing every year. I think we have good reason to think we will be able to get there,” Nichols says of the goal.

CARB and the auto industry have been on opposite sides of several regulatory fronts over the years, but Nichols uses her SAE speech to extend an olive branch of sorts.

“Anytime the public sector has asked you to make your product safer or cleaner, while you don’t always come along easily, you develop solutions that allow compliance at far lower cost than anyone imagines, and without compromising performance, comfort, or convenience,” she says.

“Without exception, when provided with the certainty of regulation, you have always created technology solutions to address and overcome societal problems.”

Nichols also gets her digs in, tweaking the Alliance of Automobile Manufacturers and the Association of Global Automakers for petitioning the Environmental Protection Agency one month ago to reconsider the waiver allowing California to stimulate the market for zero-emissions vehicles.

“The two big trade associations of the automobile industry began working to undermine progress and the commitment of a dozen states to fully support your growing market for zero-emission vehicles,” she says. “We don’t have time anymore for this kind of retrograde, business-as-usual Washington game.

“So stop. Rather than rehashing the same tired legal battles of our past, let’s work together to collectively support and develop this market.”

CARB and the auto industry need one other, Nichols says. “Our climate and air-quality policies will only succeed if you succeed in developing and marketing the efficient and zero-emission technologies that allow our communities and businesses to grow.

“Your businesses will grow if our communities prosper, and grow in a sustainable way. Your businesses will grow if we reduce the amount of money consumers spend on petroleum, environmental cleanup and congestion costs.”

Last year, CARB, working with federal agencies, adopted a single national standard for vehicle greenhouse-gas emissions and fuel economy that the auto industry supported.

The rule requires CARB, the EPA and National Highway Traffic Safety Admin. to conduct a midterm review of the costs, technology development and market progress in the 2017 timeframe.

“If technology progress is behind schedule or, as I like to think, if markets are booming beyond initial expectation, we can make appropriate course corrections,” Nichols says.

California’s clean-fuel standards, recently embraced by the EPA for nationwide implementation, have reduced smog-forming emissions and cancer risk from vehicles by 15% and 40%, respectively, she says.

“We do this all in California, not to drive you crazy but because of our unique air-quality problems and commitment to comprehensively and responsibly address climate change.”

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