Actor Leonardo DiCaprio has become an equity investor in and a brand ambassador for Fisker Automotive, the Anaheim, Calif.-based startup that sells the Karma plug-in hybrid.
Having a Hollywood star help burnish the corporate image couldn’t come at a better time. Fisker Automotive recently expanded a recall of its $103,000 Karma, due to incorrectly positioned hose clamps that could potentially cause a fire. The recall now affects more than 250 of these luxury vehicles, which is roughly 25 percent of the total number sold. The company also is under political fire over a loan it received through the U.S. Department of Energy.
But DiCaprio, a three-time Oscar nominee known for films such as “Inception” (2010), “Catch Me If You Can” (2002), and “Titanic” (1997), is a longtime believer in Fisker Automotive. He took delivery of the first Karma to roll off the production line in July 2011.
“DiCaprio will work closely with marketing and promotional initiatives to bring attention to sustainability and environmental issues around the world,” Fisker Automotive said in a press release. “In turn, Fisker will support the work of the Leonardo DiCaprio Foundation.”
Fisker Automotive did not release details on exactly what role DiCaprio will play in the company’s marketing strategy. But the fact that the new partnership will play up sustainability—which is a broader theme than just saving fuel by driving a Karma—implies that DiCaprio’s role is different than that of a typical spokesman who helps to sell more cars.
Neither did Fisker Automotive specify how much DiCaprio invested in the company, nor how it will be involved with DiCaprio’s foundation, which he created in 1998 to draw attention to environmental issues such as wildlife protection and climate change.
Signing up DiCaprio as a brand ambassador makes sense, given Fisker Automotive’s commitment to environmental responsibility—a point that is mentioned in its press release. Besides manufacturing cars that can help reduce fuel consumption and emissions, the company also uses low-impact technology and renewable materials, such as interior trim made from reclaimed wood and “Diamond Dust” paint that utilizes flakes of recycled glass.
Fisker Automotive has taken several steps to raise its profile lately and counter an onslaught of negative publicity. The company launched its first major advertising campaign in June with a multi-page spread in the Wall Street Journal that both celebrated its accomplishments and acknowledged the challenges it has faced as an innovator in the auto industry.
In addition, co-founder Barney Koehler is transitioning from head of operations to chief business development officer. He will pursue strategic partnerships to share Fisker Automotive technology and create manufacturing alliances.
The change in his role, announced on Tuesday, suggests that the company is looking to bolster its business by diversifying beyond production of the Karma and other hybrid cars it has in the pipeline.
Fisker Automotive said in May it had delivered 1,000 Karmas to customers globally since the plug-in hybrid went on sale. The company also said it had generated $100 million in revenue in the four months ending April 30 and raised $174 million in private equity funding during that same time period, bringing total funding to $1 billion since the company’s founding in 2007. It has 80 independent retail locations in Canada, Europe and the United States, and is about to start selling its cars in China and the Middle East.
Despite this progress, the company is struggling to restore its credibility after numerous setbacks. One issue is a controversy over a $529 million government-guaranteed loan, which is making Fisker Automotive a lightning rod in this presidential election year. The company borrowed $193 million before the Energy Department decided to freeze the remainder of the loan money in May 2011, citing missed deadlines with production of the Karma.
On Tuesday, two Republican senators criticized the Obama administration for approving the loan, made under a program to promote the development of green energy. Sens. Chuck Grassley of Iowa and John Thune of South Dakota called Fisker a “troubled” company and questioned whether Energy Department officials adequately assessed its ability to repay the money. They also complained about the Karma being produced in Finland rather than the United States.
Such attacks are certainly not helping build a positive public perception of the fledgling car company. Perhaps DiCaprio’s star power, and his reputation as an environmentalist, can give Fisker Automotive the boost it needs.
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