The Fortune Q&A: Henrik Fisker

Fisker Automotive, the buzzy electric car company that the designer and entrepreneur founded in 2007, was out of money. To outsiders, it was a shocking concession for a company that had raised a staggering $1.2 billion from public and private funds. But the Anaheim, Calif. company hadn’t produced a car for more than a year after building about 2,500 of its Karma, a luxury plug-in hybrid sports sedan priced at $103,000. And it faced a congressional hearing about the $529 million in financing it received from the U.S. Department of Energy.

Fisker resigned as executive chairman in March with the fate of the company still unsettled. The following year Wanxiang Group, China’s largest automotive parts company, snapped up Fisker’s assets for $149.2 million in a bankruptcy auction.

The proceedings were enough to put a high-profile founder in hiding for awhile, but the company’s namesake didn’t exactly disappear. Fisker was commissioned by Anders Kirk Johansen, heir to the Lego brand, to design a Lauge Jensen Motorcycles Viking concept that was unveiled in early 2014. Fisker later partnered with Galpin Auto Sports, a major Ford dealer near Los Angeles, to create a 725-horsepower Mustang dubbed the Rocket.

Still, these were hardly the heady days of 2009 when Fisker was steering a promising electric car startup that promised to upend an century-old industry.

Fisker stepped fully into the spotlight in January. At the North American International Auto Show in Detroit, he introduced a company called VLF Automotive—created with manufacturer Gilbert Villarreal and former General Motors executive Bob Lutz, the “V” and “L” of the company’s name—and a $280,000, 745-horsepower supercar dubbed the 2016 Force 1.

Fisker says he’s just getting started. The man behind the BMW Z8, Aston Martin V8 Vantage, and Aston Martin D89 is also designing a line of super yachts through a partnership with Benetti, the Italian shipbuilding firm. By the end of this year, Fisker could have his own competition-style TV show. And there are other high-profile joint ventures in the works, he hints.

In a winding interview, edited and condensed for clarity, Fortune asked Fisker about those super yachts—as well as the future of cars, the rise of electric carmaking rival Tesla Motors, and the prospective new entrant Faraday Future. Here’s what he said.

Why create another car company?

For me, this was kind of different. VL Automotive had already spent a couple of years certifying and testing what essentially is a Fisker Karma with a Corvette V8 engine in it. They were just about ready to finally bring it to market.

I called up Bob Lutz because I was working together with [professional racer and owner of Viper Exchange Racing] Ben Keating out of Texas on Force 1, this American supercar, and I needed someone to build it. When I called up Bob, I said, “I know you guys are building these cars. You have these facilities. Are you able to build this car?”

We had lunch in Michigan. Bob said, “Why don’t you join in? We’ll make it ‘VLF.’ You can get back to the car you already designed, you can help evolve it, and we have a lot of other fun projects.”

I looked beneath the surface and realized that it was not a typical startup where you have to go out and raise a ton of money and sell thousands of cars [to pay back investors]. It’s more about three guys having some fun, doing what we really love to do, which is to make amazing cars.

We have such a low cost center that we don’t need to make many cars to make a profit. With just 100 cars, or even less, we can make this company profitable because there’s no debt, we’ve already got the place where we’re going to manufacture, we’ve got the machines, and everything else.

It was a unique opportunity to do something—I hate to say “on the side,” but it’s not one of my main projects, and it’s not something where I need to go into work every day.

And I think we kind of felt there was a little bit of an empty spot in the market for a small, niche manufacturer. There used to be more companies like this. But in this hard-reality world, where people are spending hundreds of millions to develop cars, it is very tough to bring out niche cars. We’ve found a way to do that.

And if we were really successful, and somebody wanted to buy 1,000 Force 1 cars? Quite frankly we couldn’t do it. We would not be able to. We’re a limited company that will never get into producing 10,000 cars or anything near that. That’s not the objective.

The 2016 Force 1 supercar, designed by Henrik Fisker.Courtesy of VLF Automotive

You mentioned that this is not your main project. What are you spending most of your time on?

Actually, I’m spending quite a lot of time on the Benetti yacht I’m working on. It’s a 164-foot yacht. I just finalized the design; I’m going through a feasibility study right now. It’s a $34 million, $35 million yacht depending on what you put in it. So that’s quite a big project. It takes several years to build one.

I’ve got some other smaller projects in different areas that I’m working on, too. I’m kind of impatient. I like to see things realized and not just work on a project for three years and wait, wait, wait. I try to keep myself busy.

What led you to design super yachts?

My wife was running a big family office in London and the gentleman she worked for had a giant yacht. She spent a lot of time on it; I was there a couple of times. It kind of inspired me to see how people actually use a yacht. It’s a different world. So I started to think, how would I design a yacht?

I thought it an interesting idea. I happened to be at some meetings and different events where I met someone from Benetti. We were talking about how a lot of industry leaders use these yachts as a tool to conduct business.

I was throwing out a couple of my ideas when he said, “Why don’t we do something together?” It led me to start talking to Benetti. They said, “We could really some fresh thinking—someone who can think outside of the box for the yacht industry.” They thought it would be really interesting to have someone like me, with my background in luxury cars, to come in. We discussed it and decided to do it.

A lot of your projects seem to start with a casual conversation.

They do. I think it’s kind of a natural thing that evolves [into a formal project]. I don’t take on projects that are a hassle, or when someone comes in and says, “We really need this design,” and I’m like, “OK, fine, I’ll do it.” It really has to be something that I personally feel intrigued and excited about—any product, as long as I’m excited by it. It doesn’t have to be a car.

How will VLF Automotive be different from Fisker Automotive? How is your mindset and approach different this time?

There’s a big difference between VLF Automotive and Fisker Automotive.

Fisker was about going out and attacking a completely new industry where everything is new, and developing something that nobody has ever done before, and going up against conglomerates that have not just billions but tens of billions of dollars. There is a giant risk with that. There is a very fine line between success and failure. When you’re out there as the very first one, you don’t always get the credit for being the first because it’s about whether you survive or not. It doesn’t really matter whether you open up the doors for somebody else.

I think we did that with Fisker. I think that we really put the plug-in hybrid on the market and showed that environmentally friendly cars can be luxurious and desired by people.

With VLF, I don’t want to exaggerate, but I feel like I could do it with one hand tied behind my back. I don’t want to sound arrogant but at the end of the day, for everything we’re doing there, we all have a lot of knowledge and experience. You have Bob Lutz in there—I don’t even dare say it, but he has more than 50 years’ experience in the car industry. I’ve got at least 30 years. Gilbert Villareal builds them. So we all have tons of experience. We’re not really reinventing the wheel.

Of course, we are designing new things and doing exciting stuff. By no means is it easy because then everybody would be doing it. But I think that, because we all have this experience, we feel confident.

Would you develop an all-electric car? Or will you stick with gas-powered supercars like the Force 1?

I don’t feel like I have to stick to anything. I can do what I want.

VLF is just one project I’m working on. I would never say never, but at this point in time, I don’t think we’re looking at electric cars. But then again, the luxury market changes.

I think there are a lot of opportunities, a lot of different things going on. Nothing that I can talk openly about. But I don’t think there’s any reason for me to stick to any type of car. I’ve never done a normal, mass market, affordable car, for instance. That would be one thing that would be fun to do one day.

You talk about the fine line between success and failure. Do you feel like Fisker Automotive really helped Tesla Motors succeed where it might not have because your company was first?

I don’t think I would define Fisker Automotive as a standard failure because, first of all, we got several thousand cars on the road. Secondly, the car company was sold for $150 million and today the assets and the cars are owned by a company that wants to bring it back to the market. It is not the same as the other startups that came, disappeared, we never heard about them again, and no one is trying to revive them.

I do believe that, generally, industry people—whether they were at Tesla or another car company—were pretty amazed that a new car with a new name could debut and within a few months have a couple thousand cars on the road. Despite all of the yelling and screaming around that time, people forgot that, for two or three months, we actually beat Maserati in sales, which is pretty amazing for a brand-new company.

What it really showed is that there is a market for innovative new vehicles, which is something that has not really been the case over the past 50 years. Nobody would have dared start a car company. Anybody who would attempt it would not get to the point of getting cars into production. We really paved the way for other car companies to take that risk.

It’s also easy to forget that there are large car companies that have been around for 100 years that have gone through financial restructuring, gone bankrupt, and been relaunched. That’s something that, unfortunately, happens. One reason is because the industry is so critical-capital intensive. I don’t think there’s an industry in the world that demands not tens of millions, but hundreds of millions, and sometimes billions, of dollars. It is scrutinized in a way that no other industry is and demands constant, immense cash flow.

Let’s say a car startup like Faraday Future comes up to you and says, “What did you learn? What are the main takeaways and lessons that you can share?”

I don’t know that I want to divulge that because I’ll be using that later in life. (laughs)

It’s an amazing experience. When you go through it, you realize there are probably less than a handful of people in the entire world who have the possibility of going through it like you did. One of the most difficult things is, how do you find a successor that actually has that experience that you’ve just gone through?

That’s something I experienced as we tried to get some CEOs [for Fisker Automotive]. I could look from here to the moon and there wasn’t anyone I could find who had remotely that same experience. Elon Musk probably can send his rocket to the moon and won’t find anybody there that has that experience.

That’s probably one of the biggest challenges startup companies have because they’re managed in a completely different way than traditional companies. They’ve gone through challenges and demand the type of decisions that you will never see in a normal company. Nobody will understand the type of risk you have to take, the stress you’ve gone under, the demand for unusual and incredible quick decisions.

Who are going to be the [future] leaders of some of these startups?

A Benetti yacht. Henrik Fisker is working with the company to design a new model.Courtesy of Benetti

Is that a risk for Tesla?

I think it’s hard to say at this point. Elon is running it. I don’t think there’s a risk right now.

But for any company, you have to think of a succession plan. Rather than say it’s a risk, I’d say it’s a challenge—a big task to think about how you fulfill some of these deep decisions in companies like Tesla, because there are so few people with that type of experience. And it’s not just the CEO. It’s a couple of the other top-line executives, too.

In a startup car company, everything you do has to be done in a different way than a traditional car company. And the main reason is that all of these big car companies are operating like giant well-oiled machines—you could put a very seasoned executive in and all he has to do is make sure the machine keeps running. Maintaining a giant machine is completely different than leading a startup company.

What do you think of Tesla’s prospects right now? Are you bullish or bearish on the company?

Tesla has defied everyone’s predictions again and again. It has such a unique position in the market and so far, whatever people think about Tesla and its business model, there is one fact that nobody can dispute: It pretty much has the market to itself. For whatever reason, there has been no traditional car company nor a new car company that has been able or willing to go in and challenge Tesla in its own market segment.

Right now, if you’re looking for a luxury, sporty, four-door sedan, there is only the Model S to choose from. If you look at that, it has a strong stand in the market.

So far, I haven’t seen any real cars that have been proposed to challenge Tesla. The big car companies keep on introducing show car. But a show car is a show car—it’s not for sale.

I don’t know the internal business models and how Tesla is going to make money and all that, so this question is hard for me to answer. But from my perspective it’s sitting quite well in the market.

What do you think of Faraday Future?

This is a little bit like if you asked me what I think is inside the magician’s hat, you know. I don’t know because I haven’t seen [its FFZERO1 concept car]. There are a lot of tricks coming out of it.

I don’t think that anybody really knows. I think people were expecting to see more of a production car or something [when the company unveiled the model at CES, the annual consumer electronics trade show, in Las Vegas in January.]

The car industry has moved itself away from doing traditional show cars that have nothing to do with what the public will buy a few years later. Faraday Future seems like it moved back to showing a show car that has nothing to do with what it is thinking about doing later. So it’s very hard to judge or have any real opinion about what Faraday Future is going to do.

One thing I can tell you—as a designer and somebody from the car industry—is that if you have some knowledge of the car industry, and you have a few million dollars at your disposal, and you have a fairly good designer and a small engineering team, then anybody can make a show car.

But to actually bring a show car into production—go through all the rules, all the certifications, all the testing, all the reliability tests—that is something completely different. You can’t even compare that. Then, not to mention, building a brand, setting up the dealer network…all of that stuff is so far removed from just showing a show car. That’s why it’s very hard to judge any of these new startup companies.

What trends do you see in the auto industry that are exciting or surprising to you? What about design?

Something that’s going to be extremely important in the car industry is—both from the point of view of the consumer and the designer—understanding where we are going with what we call the “connected car.”

A big challenge is figuring out, first of all, what is it that the consumer and the driver want? And how do you bring this information to the consumer and the driver? And what impact does that have on the interior design?

That’s going to be a big task in the next couple of years. Automakers have just thrown in everything and anything that’s available. Most cars, especially in the luxury segment, probably have more than 500 different options and menus and things you can do, and people probably don’t even use 10% or 20% of it.

It will be very important to figure out how we reconnect with the next generation of consumers to get them to fall in love with cars again. I somehow feel the car is still a very emotional and very exciting element of our life that we could spark that love for cars. We just have to find a way to integrate that into our society in a way where we feel it doesn’t have a negative impact like with pollution or whatever it might be.

So, what will that spark be? A new design? Rethinking car ownership for a new generation?

I’m sure there’s some market for shared car ownership, but just as I don’t want to share my suit or shoes with somebody, I don’t want to share my car with somebody. I think owning a car is part of our character—it’s who we are, the kind of car we buy. What color we buy it and where we put our sunglasses, whether we leave our coffee cup in it for the next morning. I don’t know if I want to share that with anybody else except maybe my wife and family.

That doesn’t mean there isn’t a market for it. But I don’t believe car ownership is going to be completely replaced with only cars that are shared.

At the end of the day, we’re talking about some scary utopian society where everyone wears a blue suit and drives a red car and works from home and nobody meets each other, that type of stuff. Yeah, it would be a lot cheaper if everybody just wore one pair of shoes and only had one car and one microwave meal. But that will make society pretty boring.

I think individualism will still be there. It’s up to us in the car industry and in design. Rather than reject it and say “OK, let’s find a cheap way to make one car for everybody,” I would rather try to figure out how to make people fall in love again with cars and how we get that excitement back.

I think the excitement is still there. It just needs to be energized.

Have you found a car that strikes the right balance between using technology and making it natural or intuitive?

To be honest, no. I think the car industry is still in this entrance stage of figuring out where all this is going. One of the reasons is that it takes several years to develop a car. And I think that in the last few years we’ve gone through a change where every person wants in a car all of the information and technology that they want in a smartphone.

We also now, as a society, have more information than ever, more opportunities in our lives, and we become more, and more busy. Every second counts. It’s almost like we feel that if we sit for 30 seconds and have nothing to do it feels strange. We have to check our phone or have to listen to something, have to see something, have to do something.

With the car, we have to think how do we integrate that new lifestyle into the environment of the car and how much do we bring in, and what is it that we love about the car?

One of the things I love about the car is that when I’m driving, I am driving. It takes my mind off other things. I’m not sitting checking my emails when I’m driving. The point is I think we need to find out what is it that people love about their cars and how do we integrate that with our lifestyle, which has evolved over the last couple of years.

Do we need to change the car interior radically because of that change we’ve seen? And I would say yes. One of things in the car industry and one of the arguments why the car hasn’t changed significantly is because of safety and regulations.

But I also think part of it is—I talked about that well-oiled machine—the car industry is very a well-oiled machine and also a very expensive machine. To start rethinking a car completely will have a giant impact on the car industry, cost-wise. It’s not like car companies suddenly change all their models; they do it in stages.

If they were to change one car dramatically, it would make all the other cars look old. That’s one of the challenges the current industry has. Of course, with new car companies coming up, that is where the excitement comes in. A new car company can afford to do something that is completely new because they don’t have any old stuff.

I would expect in maybe two to four years some radical changes to the car, specifically in the interior, where things could be moved drastically around because of the technology we have available.

We are in a very exciting time. I don’t think anybody has cracked the big deal yet. I don’t think anybody has come up with something where everybody goes, “Wow.” That’s still something to be discovered, and why it’s an exciting time to be a part of the car industry.

Faraday Future unveils its FFZERO1 concept car at the CES 2016 show in Las Vegas.Courtesy Faraday Future

You’ve said that you’re interested in joint ventures. Do you have something in the works? Do you want to?

It could be.

One of things that is happening is the importance of high-tech companies in the automotive industry. When you look at Samsung and Apple and Panasonic, those are three companies that, if you were to mention their name just five years ago, you wouldn’t really associate them at all with the car industry, other than the fact that they might have supplied a few things.

But today we’re talking about the how these tech companies could have a huge impact on the car industry because they’re developing and delivering a lot of the technology that will go into cars.

In the future, we’re going to potentially see some companies outside the car industry helping define what future car interiors look like. So yeah—that’s something I could imagine being a part of.

Are you working on anything else besides cars and yachts?

I can’t say much about that, except what I said already about the connected car and already being in that space, and trying to understand what that’s going to be in the future. That’s going to be something I’ll be spending some time on.

I’m a car design fanatic. I’ve always felt that it would be interesting for people to better understand how cars are designed. It is probably the most complicated product in the world.

So I’ve decided to do a television show about that. I’ll be doing something on Esquire TV about car design. We’re putting a show together that hopefully we’ll start shooting here in a couple of months. So that should be exciting.

Has it been branded or named yet?

We haven’t named it yet. It’s still kind of under wraps. You’re probably one of the first people I’ve told this to. We’re actually still deciding on the name. But we will make it a bit of a competition and make it fun and I think we want to make it more broadly appealing to invite people into the world of car design.

What’s the vision of the show?

Well I don’t want to give too much away. But I would be the host of it and probably a judge, and we’ll try to get some designers to compete.

One of the things I want to try and do that hasn’t been done before is to build a full size vehicle. Probably not a production car, obviously, but a show car or something. So we’re looking into that type of stuff to take it a bit further and make an exciting competition out of it—so people understand about the challenges and the excitement of being in the car industry.

We have a pretty good foundation for the show, so wait and you’ll see. It’s very exciting.