Solyndra Redux: Obama Administration Knew Green Car Company Was Headed For Trouble
Another day, another example of the Obama administration pouring “stimulus” tax dollars into a bad investment. This time it’s Fisker Automotive, which made luxury electric cars which were neither reliable or practical.
Newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan after questions were raised about the company’s statements.
An Energy Department official said in a June 2010 email that Fisker’s bid to draw on the federal loan may be jeopardized for failure to meet goals established by the department.
Despite that warning, Fisker continued to receive money until June 2011, when the DOE halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including the launch of the company’s signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department.
Just to be clear about how bad an investment this was, Fisker was spending $660,000 to produce each car, and selling them for $103,000. That works out to a $557,000 loss per car.
It’s honestly hard to imagine even the most monied of the environmental movement’s elite being willing to drop the $700k these cars would have had to sell for to turn any meaningful profit. Yet, somehow, nobody in the Obama administration caught on to the fact that these cars weren’t ever going to be sold at a marketable price in the real world?
That’s the problem with government investment. When you’re playing with other people’s money, it’s easy to be indiscriminate. What’s more, only bad investments need government investment.
If Fisker had been a good investment – if it was producing reliable electric cars available at prices the market would sustain – it wouldn’t have needed government investment. It would have received plenty of private investment.
Companies that can only survive due to government investment or “economic development” schemes is a company that shouldn’t be invested in at all.