Print 46 comment(s) - last by random2.. on Apr 24 at 9:58 PM

Fisker burned through $1.3B in private and government funding

The latest massive failure in the automotive industry to take a huge chunk of taxpayer money with it is Fisker. The automaker has been struggling and earlier this month laid off 75% of its workers. The company is also expected to file bankruptcy, seeking protection from its creditors.

Through all of its troubles, Fisker has only produced 2,500 of its Karma plug-in hybrid sedans (it hasn’t even begun production of the smaller Atlantic plug-in hybrid sedan). When you consider the amount of investor and U.S. taxpayer money given to Fisker in the form of government-backed loans, each of those 2,500 Karma electric vehicles cost $660,000 to produce compared to a retail price of $103,000.

Fisker had planned to spend part of the $529 million loan from the U.S. government to reopen an old General Motors manufacturing factory in Delaware. Despite the fact that Fisker had violated loan terms for the use of government-backed funds from being Energy Department, it was allowed to continue using the money according to a report released last week by a company called PrivCo.

Fisker Karma

“They made a mistake” in awarding the loan, PrivCo Chief Executive Officer Sam Hamadeh said of the Energy Department in an interview yesterday with Bloomberg. “Should they have fought this sooner? Obviously -- as soon as it became evident that they had begun to default.”

However, the Energy Department takes issue with the PrivCo report stating that the report contained errors. The Energy Department says that it halted Fisker's funding in late June of 2011 after the company had used about $193 million from the government loan.

Overall, Fisker spent $1.3 billion in venture capital and taxpayer money according to the report. Fisker is supposed to make the first repayment of $20.2 million on the loan granted from the Energy Department today. It remains unclear whether or not that will happen. 

Source: Bloomberg

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Attempt to Create Jobs
By BRB29 on 4/22/2013 12:24:21 PM , Rating: 1
While I agree with you that it seems like a complete waste of money. The primary goal of the funding was not creating jobs, it was to create/advance EVs. They gave the grant to anyone willing to do the work, show a solid plan, meet progress milestones. The path to creating an infrastructure for mass production of practical EVs was mostly an unbeatened path. The funding was to get entrepreneurs get over that hurdle.

Not all plans by the government works and it's hardly noticeable when it succeeds but always attract massive attention when it fails. Even when it succeeds, some people will still criticize because they don't agree with that direction.

Can we just be happy that Tesla actually got it right so most of our money did not go to waste. Isn't Tesla paying it back also?

All I can say is that the intention was good. We will need to depend on hybrids and especially EVs to carry us in the future. We all know that hybrids are a short term solution to our energy problems. Even the automakers admit that. Hydrogen is still far from mainstream but EV can go mainstream in a decade if the infrastructure is set up and demand is high.

RE: Attempt to Create Jobs
By Reclaimer77 on 4/22/13, Rating: 0
"If you mod me down, I will become more insightful than you can possibly imagine." -- Slashdot

Most Popular ArticlesTop 5 Smart Watches
July 21, 2016, 11:48 PM
Free Windows 10 offer ends July 29th, 2016: 10 Reasons to Upgrade Immediately
July 22, 2016, 9:19 PM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki