Santa Cruz Good Times

Sunday
Feb 01st
Text size
  • Increase font size
  • Default font size
  • Decrease font size

In Defense of Tesla and Fisker

col_tesla-sThe two most prominent green car startups are Fisker Automotive and Tesla Motors, but a recent BusinessWeek article quotes longtime analyst Maryann Keller as saying, “We’re pouring $1 billion into two companies without a future. The economics of the industry favors large companies.” Is Obama wasting our hard-earned money? I don’t think so.

Of $8.5 billion in Department of Energy loans to automakers so far to build new green-themed plants, $465 million went to Tesla for work on its Model S sedan and, more recently, $528 million to Fisker Automotive for final design work on its $89,000 Karma luxury plug-in hybrid and for its more affordable Project Nina car. The total Advanced Technology Vehicles Manufacturing Loan fund is $25 billion, so much of the money remains to be spent.

BusinessWeek says this view is also held by “other critics,” but only quotes Keller. “Critics” in the article say that Fisker is an “integrator” rather than an innovator, buying the motor and battery technology for its Karma (due to roll off Finnish assembly lines starting in November) from other companies. Fisker responds that it built the Karma’s chassis. When I talked to an Energy Department spokeswoman in September, she told me that Fisker’s “two projects seemed to be worth the risk of the loan,” and would create “a large number of jobs in America.” She also said the loan, which will be paid in stages, would not “go out the door” until conditions were met.

She later said there was no deadline for the conditions to be met. Henrik Fisker said that those conditions were worked out in months of discussions with the agency. “It’s similar to a loan we might get from a bank and it’s not a problem,” he said. “The DOE wants us to be successful.” And when it comes to EVs, even many established brands are on a learning curve. General Motors does not make its own batteries, and Ford retained the Canadian company Magna International as its partner in building a Focus-based electric sedan for 2011.

Tesla, the article says, “has more credibility as an innovator,” since it makes its own battery packs and Daimler invested $50 million to buy a tenth of the company. “But it will be a huge challenge for either Fisker or Tesla to achieve sufficient scale,” BusinessWeek says. “Selling 100,000-plus cars a year requires a large network of dealers.” Tesla has seven dealerships now but is building more, and Fisker expects to have 100.

Tesla is perhaps the most fiscally successful of the startups, but the government money still dwarfs the $300 million the company has raised privately. But both Fisker and Tesla point out that the DOE funding is not in the form of a grant: It’s a loan, to be paid back with interest.

DOE funding also takes the form of matching grants from stimulus funds, and in August the agency named 48 recipients of that largesse, totaling $2.4 billion. The perception was that this funding favored Detroit and Big Three-connected suppliers. Start-ups, especially California-based ones, felt left out in the cold. We’re spending enough government money on the Big Three. The startups deserve investment, too.

 

Comments (0)Add Comment

Write comment
smaller | bigger

busy
 

Share this on your social networks

Bookmark and Share

Share this

Bookmark and Share

 

Throwing It All Away

Everybody’s for recycling, right? So why are we all doing it wrong? Our reporter gets down and dirty to uncover 10 secrets that will finally make the recycling process make sense

 

Aquarius Calling, Humanity Rising

Aquarius (11th sign after Aries) is the sign of service—serving one another, building community. Aquarius is fixed air, stabilizing new ideas in the world. When new ideas reach the masses the ideas become ideals within the hearts and minds of humanity. Air signs (Gemini, Libra and Aquarius) are mental. They think, ponder, study, research, gather and distribute information. For air signs, education and learning, communicating, writing, being social, tending to money, participating in groups and creating sustainable communities are most important. One of the present messages Aquarius is putting forth to the New Group of World Servers is the creation of the New Education (thus thinking) for humanity—one based not on commodities (banking/corporate values) but on virtues. Humanity and Aquarius Aquarius is the sign of humanity itself. We are now at the beginnings of the Age of Aquarius, the Age of Humanity (rising). The “rising” is the Aquarian vision of equality, unity, the distribution and sharing of all resources and of individual (Leo) creative gifts for the purpose of humanity’s (Aquarius) uplifting. This is the message in the Solar Festival of Aquarius (at the full moon) on Tuesday, Feb. 3. We join in these visions by reciting the World Prayer of Direction, the Great Invocation.Tuesday’s solar festival follows Monday’s Groundhog Day, or Imbolc (ancient Celtic fire festival) the halfway mark between winter solstice and spring Equinox). The New Group of World Servers (NGWS) during these two days are preparing for the upcoming Three Spring Solar Festivals: 1. Aries Resurrection/Easter Festival (April); 2. Taurus Buddha/Wesak Festival (May); and 3. Gemini’s Festival of Humanity (June). Aquarius and the new and full moons together are the primary astrological influences behind all of humanity’s endeavors. The NGWS are to teach these things, calling and uplifting humanity. Join us everyone. (301)

 

The New Tech Nexus

Community leaders in science and technology unite to form web-based networking program

 

Job Insecurity

Woman fights for her job in thoughtful, life-sized ‘Two Days One Night’
Sign up for Good Times weekly newsletter
Get the latest news, events

RSS Feed Burner

 Subscribe in a reader

Latest Comments

 

Jeffrey’s Restaurant

Why quick and friendly service matters at a local diner.

 

If you didn't live in Santa Cruz, where would you be living?

I would live in Kauai because the water is warmer, and I just love it there. Maureen Niehaus, Santa Cruz, Dental Assistant

 

Clos LaChance Wines

Pinot Noir 2012

 

Striking Gold

A taste of Soquel Vineyards’ five gold medal-winning Pinots