Karma Automotive partners with BMW for powertrains

By Mike Ramsey

Karma Automotive reached a deal for BMW AG to supply it with charging systems and array of other components as the Chinese-owned electric-car maker readies a new luxury vehicle.

Karma, formed when China’s Wanxiang Group purchased assets from now-defunct Fisker Automotive Inc. out of bankruptcy proceedings in 2014, will get powertrain parts and an array of electric and hybrid technologies from BMW, the company said on Thursday. The Costa Mesa, Calif.,-based auto maker plans to start selling a luxury plug-in hybrid car in 2016 to get back into the electric-car market.

A vehicle called the Karma was last built by Fisker in 2012. The newly created Karma company has primarily been servicing existing customers while trying to launch a new model. Karma is retrofitting a 556,000-square-foot building and has begun testing out equipment in the plant, said Jim Taylor, Karma’s chief marketing officer, in an interview.

Karma, which employs about 300 people, has moved machinery from Finland, where the previous vehicle was built, to a new factory under construction in Moreno Valley, Calif., about an hour outside of Los Angeles. The company has about 40 workers at its plant.

“Any chance we have to pick up where a reputable [auto maker] like BMW has left off with engineering, design and, of course, validation, is huge for us,” said Mr. Taylor, a former General Motors Co. executive. “The alignment you select with key partners is critical to building a new car company.” The previous Fisker Karma suffered quality problems that dented sales.

Karma will be using “high-voltage charging systems and a wide range of hybrid and EV systems,” the company said in a news release announcing the supply deal with BMW.

BMW has developed electric-car technology under the “i-series” grouping, which for now includes the i3, a bubble-shaped electric vehicle with a carbon-fiber body structure, and the i8, an electric supercar. The German auto maker uses an electric-vehicle fast-charging system that it is deploying along with Volkswagen AG .

Buying powertrain components from an established auto maker such as BMW could help Karma ensure high-quality components in its new vehicle, an undertaking that might otherwise prove challenging for a startup.

Karma has revealed few details about the car, including the name, the price and how it will be sold. Mr. Taylor said the company would announce its retailing strategy in the next few months.

Karma’s battery will be provided by A123 Systems LLC, a company Wanxiang also purchased out of bankruptcy. A123 was the original supplier to the Fisker Karma, but has developed a new battery for the coming vehicle.

Karma is one of several electric upstarts with Chinese backing. Faraday Future, owned by Leshi Internet Information and Technology Corp., is developing an electric vehicle to compete with rival Tesla Motors Inc. It is based in the Gardena, Calif., a Los Angeles suburb.

Atieva Inc., in Menlo Park, Calif., outside San Francisco, is also working on an electric car. That company is also backed by Leshi, as well as Beijing Automobile Industry Holding Co.

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