Hybrids & Electrics

Karma Bankruptcy Just Around the Corner?

With accusations and denials blasted all over the Web, it’s hard to tell what’s going on with Karma, the independent car manufacturer in California. But, when you see who has left the company and dig for what future plans are being shaped it paints a more realistic picture. And that picture is decidedly not pretty. There are layoffs, executives leaving en masse, and prototypes that are merely shells of functional vehicles. Nothing positive seems to be happening within the hallowed halls of Karma. Could Karma bankruptcy be just around the corner?

Karma rose from the ashes of the Fisker Karma debacle

silver Karma sedan at sunset

Do you remember Karma? It rose from the ashes of the Fisker Karma debacle. Zoomy looking, but with modest performance and compromised quality, it has never seemed like it advanced much. A new EV platform and ongoing autonomous testing were being developed. Karma called the van’s system E-Flex. Now it seems to have evaporated.

Someone has a connection with Jalopnik inside of what’s left of the company. We would not normally use Jalop as a source but they seem to be in on much of the inner workings. They posted back in April about the turmoil, “movie prop” autonomous vehicle, and questionable development at Karma.

Sources say Karma is preparing to file for Chapter 11 bankruptcy

Karma sedan in the wild
Credit: Karma Automotive

Now they bring more news and it’s not sounding good. With a flurry of denials COO, Kevin Pavlov left the company soon after that info was made public. Karma VP of Autonomous Driving Srini Gowda left soon after that. Karma’s safety program director also headed for the exits. By mid-May, 15 more workers were furloughed. Now, sources say Karma is preparing to file for Chapter 11. 

There’s more. Labeled as a “major safety hazard” Karma’s Level-4 autonomous demonstrator van can no longer conduct tests. Insiders say there is a litany of bad hovering over Karma. Poor treatment of employees, poor quality assembly, deception, and even a fruit fly infestation in the commissary are making things difficult within the manufacturer’s headquarters.

It planned on keeping production limited to 200-300 sedans per year to maintain exclusivity. In 2016 it announced limiting total production to 3,000 units. In August 2017 Bloomberg published an article titled, “Don’t Buy a Karma Revero. Buy a Tesla Instead. Or Anything Else.” Not exactly an endorsement. It went on to say “This is a very bad car.” Yikes!

RELATED: Bombshell: Is The Fisker Karma Co Just One Big Fake?

In April 2019 Karma voluntarily issued a recall and stop-sale order

white karma sedan
A Fisker Karma hybrid car is displayed at the US carmaker’s booth. | Getty

By April 2019, things were no better. It voluntarily issued a recall and stop-sale order. Roll-over sensors were found to be faulty. This could cause the side-curtain airbags to become disabled. That was fixed and production slowly moved forward. 

Both the EV platform and Level-4 autonomous testing were meant to extend the life of the company. They would breathe new life into the stalling manufacturer. We’ll continue to look for clues as to what is happening at Karma. Hopefully, it can see past these latest problems but for most seems highly unlikely.