Santa Cruz Good Times

Tuesday
Oct 21st
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

 

Field Work

Santa Cruz Mountain winemakers explain how the harvest works, and what kind of wine to expect from this year's crop

 

Libra's Two Choices

Libra (our last week) is the sign of creating right relations and values. In Libra we are asked to choose how to be, our identity in the world. We can maintain a hermetic sealed-off attitude (my life, my work, my money, etc.) or we can gain knowledge of world events and learn more about those in need. Libra is a group sign—self with others. Here are some events occurring in our world this week concerning food, poverty, spirituality, values and global realities. The UN (a spiritual experiment) each month places a “light” upon world problems. This week a light shines on Rural Women, Farms, Food & Poverty. Before we choose to respond we must have knowledge. “So we can each do our part.” Oct. 15 - International Day of Rural Women (unrecognized with few resources); Oct. 16 - World Food Day & Family Farming: Feeding the World, Caring for the Earth; Oct. 17 - Eradication of Poverty Day (international). During the month of Libra (with Saturn exalted), we pause, contemplate and assess what it is we know, don’t know, and need to know. Libra receives and distributes Ray 3 of divine intelligence, right relations, right choice and right economy (Venus). Use your intelligence “tips the Libran scales” in terms of being able to see and then choose between the two paths Libra offers (return to the past or step forward into Scorpio’s Discipleship). Libra (the oscillating light) prepares us for the great tests and conflicts in Scorpio. In Libra we are subtly tested as we learn the nature of polarized energies (s/he loves me, s/he loves me not). In Libra we learn more about ourselves through others. Libra’s Ray 3 asks us to become more adaptable and skillful. And then we are to teach each other what we know. In Libra, we all become teachers. In all these ways love is cultivated.

 

The New Tech Nexus

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

 

Docs Without Borders

United Nations Association Film Festival showcases documentaries from around the globe
Sign up for Good Times weekly newsletter
Get the latest news, events

RSS Feed Burner

 Subscribe in a reader

Latest Comments

 

Nut Kreations

Co-owner Craig Olsen goes nuts over nuts

 

What artist or artists participating in the encore weekend of Open Studios should not be missed?

Santa Cruz | Teacher

 

Martin Ranch Winery

Friends who are wine club members of Martin Ranch invited us to the winery’s fun and festive annual barbecue, where the wine is flowing and the food just keeps on coming. Music and dancing are part and parcel of the action, and a good time is guaranteed.

 

Beer Bus

Santa Cruz’s new Brew Cruz, award winning ales, mole by el Jardín, and Wildcat Ridge Chardonnay