According to an anonymous source, Geely will not bid for a majority stake in Fisker Automotive, due to the company’s obligations to the US government.
China’s Zhejiang Geely Holding Group and the owner of Volvo, has been favored to win the agreement for troubled U.S. electric car maker, which expected to close a deal by mid-March. The source says that the Chinese company changed its mind due to the tough conditions imposed by the US Department of Energy on Fisker when it offered a $529 million loan. Among the conditions, the company has to restore jobs and capacity at Fisker’s Delaware plant following a schedule set by the US government.
“Those obligations are too complicated to handle and seem too risky,” the source said. “The plan’s footprint was too big. It would take a long, long time to fill up the plant with products and restore employment there.”
One of the main reasons for which Geely showed its interest in Fisker was exactly the Delaware factory, which has been previously owned by GM. The Chinese automaker relied on this plant to boost demand for its Volvo vehicles in the US as it plans to manufacture the vehicles here.