Home | Get Uncle Sam out of the green startup loan business
Get Uncle Sam out of the green startup loan business
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Meet the Solyndra of the electric car industry: Fisker Automotive. In 2009, the company was awarded a $529 million loan through the Advanced Technology Vehicles Manufacturing program. It is in bankruptcy, and has now fired 75 percent of its workforce.
The reality, however failed to meet this goal. It did produce — at least until last year — the Karma sedan, a $104,000 plug-in electric hybrid car. But the car wasn’t just exclusive and expensive, it didn’t even work. According to a recent New York Times article, a Consumer Reports test drive ended with the Karma breaking down and having “to be hauled away on a flatbed truck.”
Adding insult to injury, the company used batteries from A123 Systems, another company that went belly-up after receiving government help — $249 million in 2009 stimulus money, a $9 million grant from the state of Michigan, and another $100 million in tax credits as well as $41 million in tax breaks and subsidies.
In fact, by some accounts, the Fisker loan was meant to ensure a market for A123’s batteries. A123 was ultimately purchased by Chinese investors, but there is no evident interest from anyone in buying Fisker today.
This is bad news for taxpayers who will foot that bill, minus the $21 million that the government managed to seize from the company’s cash reserves. The silver lining, if we must find one, is that the company was actually doing so poorly and missed so many deadlines that the Department of Energy suspended its support after having guaranteed $192 million of the $529 million loan.
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