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 kmmatney on 4/22/2013 6:00:34 PM , Rating: 2
I've been behind people in line at the grocery store paying with food stamps, and they were getting way more expensive food than what my Wife and I buy. They can easily slash 10% off of whatever they give for food stamps, and save a lot of government money.

When we moved into our most recent house, I kept my old house and rented it out, and the renter was a section 8, single mom with 5 kids. At first it was kind of cool, since I didn't have to worry about the rent - we received a direct deposit of $1600 from the government for the 4-bedroom house in a decent neighborhood. Turns out that there was a guy living them who was the father of at least a few of the kids - they didn't marry just so they could stay on the dole. I hated being part of that, so I just sold the house as an excuse to kick them out. That was lucky too, since we sold it only a few months before the housing market crash. Anyways, this is nothing to do with the topic at hand, but there isn't much incentive for many people to work when they have such great benefits.

"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings

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