• Fisker Automotive lays off 160 employees, keeping only 40
  • Fisker Karma is the company's only model
  • Owners face uncertainty

A layoff of 160 employees at its Anaheim, California headquarters is the latest sign that struggling automaker Fisker Automotive may not survive much longer. Fisker builds the Karma, a plug-in hybrid luxury sports sedan, and sells the vehicle in the U.S. through a network of 29 independent dealers.

The layoff leaves in place 40 employees to keep Fisker in business for the immediate future. The firm is reportedly courting investors or a buyer. The layoffs came without advance notice, but the firm's troubles are no secret. Last month, Fisker workers were furloughed for a week. And Henrik Fisker, an automotive designer-turned-entrepreneur who founded the company, resigned from his position as executive chairman in March.

The Fisker Karma, which debuted in 2011 after several postponements, is a luxury sports sedan with a plug-in hybrid powertrain and is Fisker's only production model. The Karma can go about 30 miles on electricity alone before switching to the gasoline engine or stopping for a recharge. Fisker prices the Karma around $100,000, but weak sales have led to heavy discounting by dealers. AutoTrader.com currently lists 98 new Karmas for sale nationwide, most of which are advertised at below the manufacturer's suggested prices.

Uncertainty about the future of Fisker Automotive can only further drive down prices. If the automaker folds, owners may have trouble finding parts and qualified service technicians. And shoppers will surely be even more reluctant to buy a vehicle from a defunct automaker than one with a rocky business outlook.

In our first drive of the Karma, we found fault with a cramped cabin, a difficult control interface and craftsmanship that was sub-par for a $100,000 car. But the Karma's alluring curves could be enough to overlook some minor shortcomings. With Fisker tinkering on the edge of bankruptcy, the Karma's glow is fading fast.

What it means to you: Considering a luxurious and sporty electric sedan for around $100,000? The Tesla Model S may now be the best choice.

author photo

Nick Palermo is an automotive writer and lifelong car nut. He follows new and late-model used vehicles for AutoTrader.com, writes about vintage cars for Hemmings Classic Wheels and blogs on all things automotive at LivingVroom. He lives in Atlanta with his wife and twins.

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