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Fisker Karma
This is the same program that funded Fisker Automotive

South Dakota's Republican senator wants to terminate the federal loan program that gave millions of dollars to Fisker Automotive -- an automaker that has failed to produce a car in over a year and is now missing loan payments to the U.S. Department of Energy (DOE). 

According to The Detroit News, Sen. John Thune (R-S.D.) wants to get rid of the $25 billion Advanced Technology Vehicle Manufacturing loan program due to failures like Fisker Automotive wasting taxpayer money. He has already proposed an amendment that would “permanently end the ATVM program and save taxpayers from paying for more of President Obama’s bad green-energy bets.”

Thune's amendment comes after the DOE said it would auction off Fisker Automotive's $168 million unpaid loan earlier this week. DOE plans to launch the auction in early October. 

Fisker Automotive is an auto startup that received $529 million in DOE loans back in April 2010. However, Fisker fell a little behind on its production schedule, and in May 2011, DOE froze the loans due to "unmet milestones." Fisker had only drawn $193 million of it at that point. It hasn't been able to build a car since July 2012, and started looking for a buyer so it doesn't have to claim bankruptcy.

But Fisker isn't the only auto company that failed after receiving money from the Advanced Technology Vehicle Manufacturing loan program. Vehicle Production Group LLC -- which is a Michigan-based startup building wheelchair-accessible compressed natural gas vehicles -- was awarded $50 million in loans back in March 2011, but has since halted production.

Senator John Thune

DOE sold its unpaid $50 million loan for Vehicle Production Group LLC to AM General for $3 million earlier this month. According to The Detroit News, taxpayers lost about $42 million on that sale.

The Advanced Technology Vehicle Manufacturing Program was created by Congress in 2007 in an effort to reach the goal of 1 million EVs on U.S. roads by 2015, but the program hasn't made a new loan since March 2011. This is mainly due to the fact that two of the five companies (Fisker and Vehicle Production Group) that received government loans stopped production. 

The Obama administration received a lot of flak for these failures, but the program wasn't all bad. The other three loans -- $5.9 billion to Ford, $1.4 billion to Nissan and $465 million to EV startup Tesla Motors -- proved to be successful. Tesla even managed to pay its full sum back nine years early, which was a great feat for a startup. 

U.S. Energy Secretary Ernest Moniz said last month that the Obama administration is interested in reviving the $25 billion Advanced Technology Vehicle Manufacturing Program. He noted that it plans to draw a new round of loan requests (but is not actively considering any applications for retooling loans) and reexamine its lending criteria in order to avoid problems it encountered in the past. 

Source: The Detroit News

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RE: Bad Loans
By Solandri on 9/19/2013 2:41:53 PM , Rating: 1
I agree with you about the railroads, but the Internet was a Department of Defense project. They wanted to create a nationwide communications network which would still work even if large segments of it were wiped out in a nuclear strike. There was never an expectation that it would ever be paid back in usefulness to the average American. That it turned out that way was just happenstance.

Electric cars and other advanced transportation technologies are in a similar position. In another few decades it will seem obvious and we will wonder why we did not do it sooner.

This is the problem I have with electric vehicle proponents. They are absolutely certain that EVs are the correct solution and thus are incapable of seeing any risk in investing in them.

I'm not so sure. If cellulostic ethanol is ever made to work and there isn't an order of magnitude improvement in batteries, EVs are dead. We could take all the waste plant matter we currently burn or dispose, and turn it into fuel for ICE cars. Yes it's green. Plants are basically self-propagating solar collectors who store that sunlight in the form of sugar. (Your body uses short sugars for energy. Carbohydrates like pasta are just long sugars your body can break apart into short sugars. Cellulose is an even longer sugar which most animals can't break apart into short sugars. The energy is still there though - it's why wood burns so well.)

Yes that's a big if, but it's not that big. Termites already do it (convert wood to sugars). We just need to figure out a way to do it cost-effectively on a massive industrial scale.

RE: Bad Loans
By Reflex on 9/19/2013 3:32:03 PM , Rating: 2
Waiting on holy grail projects like cellulostic ethanol is letting the 'perfect' impede the 'better'. Furthermore, even if such a process were perfected, it could just as easily, and more efficiently, be applied to biomass energy production and produce electricity at central plants rather than in the car itself.

A huge shift to electric cars would have no impact on other solutions, if they make sense they will also be able to contribute, investing in cars today that are cleaner and more efficient is smart, even if something better comes along together.

RE: Bad Loans
By M'n'M on 9/19/2013 3:35:47 PM , Rating: 2
They are absolutely certain that EVs are the correct solution and thus are incapable of seeing any risk in investing in them.

And if not ethanol then some other bio-fuel. Or hydrogen and fuel cells. There's been other technologies hyped by the Govt at one time or another. They all seem to fall by the wayside when the next "fad" comes along. Perhaps rightfully and perhaps just because they didn't deliver the goods in the politically expedient time available. Alas once falling out of Govt favor (and not able suckle on the Govt $-teat) it becomes hard for them to compete and realize whatever potential they may have had.

RE: Bad Loans
By Samus on 9/20/2013 4:49:49 AM , Rating: 2
The internet became a Department of Defense product. It started as an academic study.

RE: Bad Loans
By Just Tom on 9/21/2013 11:42:08 AM , Rating: 2
The redundancy built into the original ARPANET was not to survive a nuclear war but to survive crappy equipment. The purpose of the network was simply to facilitate research, nothing more. You have to remember at the time fast computers were exceedingly rare and many researchers did not have one available locally. ARPANET mitigated that to a great extent.

"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke

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