One of the main backers of Californian-based Fisker Automotive sees access to the high-technology knowledge of suppliers as one of the significant benefits of its investment, matching the business returns possible from selling cars.

“We get to hear a lot more from these cutting edge energy companies when they present their technology to us as purchasers than when we get formal investment presentations,” David Anderson, a director of Palo Alto Investors, a Silicon Valley incubator fund.

Anderson sees access to such information as a competitive advantage when searching out other high-tech investments in their formative years before they’ve become mainstream investments.

“Our investment in Fisker gives us a front seat in energy technology developments. So we’ll know before anyone else, for example, if lithium ion batteries are going to be a breakthrough,” says Anderson.

To seasoned industry observers, Fisker’s plan looks highly ambitious. From scratch he has created a new company, designed a whole new chassis and body and equipped it with an electric drive system that only General Motors, of established OEMs, is near to getting to production.

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Fisker remains confident that production of the US$90k four-door will start this year at Valmet in Finland and ramp-up to the planned 15,000 units a year by 2010/11.

Major investor Palo Alto agrees and has backed Fisker Automotive from the earliest days to the tune of “tens of millions of dollars” — the exact number remains confidential.

With three other largely middle-east investors it owns “between 50 and 60 per cent” of Fisker and takes an active role in the company’s development.

For its customers — investors in its various funds — Palo Alto spreads its holding In Fisker across several energy-focused funds, where it shares space with largely oil-based investments.

In Palo Alto’s view, Fisker is categorised as an alternative energy company because its technology has the potential to cut global oil consumption.
The other way it views Fisker Car Company is as a hedge against falls in oil-related investments.

There are parallels in Palo Alto’s investment strategy with that pursued by backers of Gordon Murray Design (GMD), whose most high-profile project is a four-seat city car with a more compact footprint than the Smart.
Tier 1 supplier Caparo Group and west coast investor Mohr Davidow Ventures see their investments in GMD as much more than a bet on whether the company can create a revolutionary city car.

Mohr Davidow likens GMD to Dolby, the audio technology company, which licences its inventions to other companies and doesn’t make anything itself.

Unlike Fisker Automotive, GMD won’t make its breakthrough car, instead it plans to licence manufacturing rights to the highest-bidder.
To create the city car, Gordon Murray has recruited a pool of very talented young engineers who are also working on other, more secret projects.

One of those is a revolutionary and patented manufacturing process that could be as saleable an item as the car.

“We’re really investing in intellectual property and ideas and design,” Angad Paul, boss of Caparo, told just-auto last summer.

Julian Rendell

See also: UK: Design consultancy attracts US venture capitalist