Fisker is the biggest challenge GM has had in decades. What will happen between those two will determine the future of the industry.
The gist is that never before has GM‘s future been on the line and this time challenged by a new comer, a startup called Fisker Automotive. GM’s future is riding on the eventual success on one car, the Volt. Fisker been awarded $528.7 millions to manufacture a sub-$40,000 plug-in hybrid, PHEV that will compete directly against the Volt. This is a slap across the face for GM. And now, to add insult to injury, Fisker Automotive buys an idling GM factory to build its competitor. In this ultimate paradox, what can GM learn from it?
Fisker, The New Business Model. If we stop to think about it, Fisker is unfair competition for GM. Fisker is lean, streamlined, does not have to bother with running complex and expensive manufacturing plants and is attracting not only investors but winning the hearts of many. GM, on the other hand has a heavy past with a negative image it built up the last few decades.
Volt Versus Nina. Finally, it all boils down to those two PHEV, the Volt and Nina. While GM battles the eyebrow raising quest of calling its Volt an extended range electric vehicle, EREV, Fisker Automotive is moving quickly to offer its PHEV Nina with less fanfare and with more efficiency in manufacturing it.
The Paradox. Finally, the ultimate paradox is the level of involvement of the government has with both firms. The U.S. government now controls 60% of GM and has a say in the Volt. It also has lent Fisker Automotive with the specification that it needs to build a sub-$40,000 PHEV. This is a direct competition to its own 60% stake in GM.
Unless GM has a few more tricks up its sleeves, it might not be able to compete against such a vibrant new force as the Fisker startup. The Fisker business model is a sign of what the future holds and where companies are slowly heading. It is sad in the end, considering the amazing engineers at GM that have been slowed down by inefficient management. However, all in all, this pushes forward the electric drive and somewhere along the line, after much of tax payer’s money, consumers will benefit.