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Why Tesla Survived and Fisker Won’t

• Kevin Bullis via

Fisker Automotive and Tesla Motors, two startups founded to make battery-powered cars, are both in the news, but for very different reasons. Tesla Motors recently announced that it is selling cars faster than it expected, which the automaker says will make the first quarter of 2013 its first profitable quarter ever. Fisker Automotive, in contrast, has furloughed workers to cut costs and is reportedly close to bankruptcy.

The different fortunes of the two companies can be traced to a number of factors, and indeed, Tesla itself has come close to failing and has been forced to scramble for funds. But one strategic decision stands out. Tesla has developed its own core technology—the batteries, the electric motor, and the systems for controlling them. Fisker focused more on the look of the automobile, relying instead on technology developed by its suppliers.

“Fisker tried to be innovative with the design. Fisker seemed to think if you designed a beautiful car, people would buy it,” says Brett Smith, codirector for manufacturing, engineering, and technology at the Center for Automotive Research. “The Tesla vehicles are good looking, but Tesla focused more on the technology, not the sheet metal.”


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