Latest taxpayer-subsidized green fiasco is based in Anaheim

April 25, 2013

By Chris Reed

The latest Californa-based green energy fiasco took center stage in the House Committee on Oversight & Government Reform on Wednesday. It is Anaheim-based Fisker Automotive. This is from the Washington Post’s Wonkblog:

fisker“It’s time for another round of scrutiny over the Obama administration’s clean-energy programs. On Wednesday, House lawmakers held a fractious hearing over federal loans that had been made to struggling electric-car manufacturer Fisker Automotive.

“There’s no doubt that Fisker is in serious trouble. The Anaheim-based company hasn’t built a vehicle since last summer after running into battery-supply issues and other problems. To date, the company has sold just 2,000 Karmas worldwide — a plug-in hybrid sports sedan that retails for $100,000. The Karma never really found a mass audience beyond Justin Bieber, Leonardo DiCaprio, and a handful of other A-list drivers.

“The Department of Energy finally halted all further loans to the company in June 2011 after having disbursed $192 million of a planned $529 million. (Since then, the government has seized some $21 million from Fisker’s accounts.)”

I love this part. As the kids say, epic fail:

“In the spring of 2012, Consumer Reports gave the Karma a failing grade after it died on the track. ‘This is the first time in memory that we have had a car that is undriveable before it has finished our check-in process,’ said Tom Mutchler.”

A fiasco for venture capital investors as well

An article on the Gigaom tech news site makes another interesting point. This wasn’t just a debacle for the Obama administration. It was a debacle for Silicon Valley venture capital investors who put tens of millions into Fisker:

“The heart of Fisker’s business model was in that early deal with Quantum. The idea was to design a gorgeous car, and have suppliers like Quantum provide the technology because off-the-shelf parts from suppliers would help keep costs down.

“But there were problems with this strategy: Sometimes, those parts had to be custom-made to fit the design vision, which resulted in higher prices for Fisker. Other times, parts were delivered late or, worse, faulty, but Fisker was locked in to those supplier relationships. Sources close to Fisker have also said that many of the parts were owned by the suppliers themselves, so Fisker didn’t own a lot of the internal technology. …

“Indeed, Fisker’s business model wasn’t the type that funders in the Valley typically like — it’s the polar opposite of the ‘Intel inside’ approach. That so many investors were so eager to back the company has left many in the electric car and tech industries scratching their heads over the years. ‘It would have only taken a couple a phone calls to industry veterans to have prevented all of this,’ says electric car advocate Chelsea Sexton, adding ‘there’s no excuse for not doing homework. It appears none was done.’”

But at least the venture capital investors lost their own money — not taxpayers’.

 

6 comments

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  1. Dyspeptic
    Dyspeptic 25 April, 2013, 08:28

    “House lawmakers held a fractious hearing over federal loans that had been made to struggling electric-car manufacturer Fisker Automotive.Good.”

    So the Feds waste billions of tax dollars on risky environmental business scams and this is defended by Libtard Congress critters as justifiable? These fools are immune to reason. Remember that the next time you can’t get service from a Federal bureaucrat due to sequester cuts.

    “It was a debacle for Silicon Valley venture capital investors who put tens of millions into Fisker:”

    I hope they lost their shirts trying to save the planet from a non existent threat. Serves them right.

    “there’s no excuse for not doing homework. It appears none was done.”

    This is a classic example of what happens when a public hysteria like AGW becomes pervasive. Fear based thinking replaces rational analysis and financial resources end up being misallocated. Liberty and prosperity are the real victims here, not those environmentally pretentious, ProgBot venture capitalists.

    Reply this comment
  2. Greg Schmidt
    Greg Schmidt 25 April, 2013, 08:31

    Taxpayers will still loose because the VC’s will take tax write off’s for business losses when Fisker goes BK. Not to mention the US Fisker employees that will loose their jobs and possibly their homes.

    Reply this comment
  3. loufca
    loufca 25 April, 2013, 09:13

    Back to the future Part Deux…..Remember the Delorean?

    Reply this comment
  4. us citizen
    us citizen 25 April, 2013, 11:29

    This WAS an epic fail!
    1. You dont price a car at $100,000 if you expect to sell a lot of them.
    2. Sports cars have a very limited audience……resulting in another smaller group of people buying them.

    Two big no nos.

    And last of all…………I own a sports car, I love it, BUT Im not driving a family around, or carrying garden stuff or anything like that. I dont fall into the large general catagory of needing a car to fit all needs. MOST people do.

    After I bought my car, I was invited to a huge car show that had all kinds of sports cars and we got to go around and grade them on various items, like: set up of the consul, colors available, upgraded performance packages, sizes of tires, etc etc etc. One of the questions was………would you buy an electric sports car.

    The answer by everyone involved (there must have been about 500 of us) was NO. We didnt care what gas cost as that was not an issue for most sports car drivers. The issue was it had to be fast, and sleek. ….. Being green was not even a consideration…….

    Reply this comment
  5. Curmudgeon
    Curmudgeon 25 April, 2013, 12:13

    Rush mentioned today that none of the vehicles were even built in the U.S.

    Reply this comment

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