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Feb 07th
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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.

 

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On the Run

Is there hope for California’s salmon?

 

Chinese New Year of the Red Fire Monkey

Monday, Feb. 8, is Aquarius new moon (19 degrees) and Chinese New Year of the Red Fire Monkey (an imaginative, intelligent and vigilant creature). Monkey is bright, quick, lively, quite naughty, clever, inquiring, sensible, and reliable. Monkey loves to help others. Often they are teachers, writers and linguists. They are very talented, like renaissance people. Leonardo Da Vinci was born in the year of Monkey. Monkey contains metal (relation to gold) and water (wisdom, danger). 2016 will be a year of finances. For a return on one’s money, invest in monkey’s ideas. Metal is related to wind (change). Therefore events in 2016 will change very quickly. We must ponder with care before making financial, business and relationship changes. Fortune’s path may not be smooth in 2016. Finances and business as usual will be challenged. Although we develop practical goals, the outcomes are different than hoped for. We must be cautious with investments and business partnership. It is most important to cultivate a balanced and harmonious daily life, seeking ways to release tension, pressure and stress to improve health and calmness. Monkey is lively, flexible, quick-witted, and versatile. Their gentle, honest, enchanting yet resourceful nature results often in everlasting love. Monkeys are freedom loving. Without freedom, Monkey becomes dull, sad and very unhappy. During the Spring and Autumn Period (770 - 476 BC), the Chinese official title of Marquis (noble person) was pronounced ‘Hou,’ the same as the pronunciation of ‘monkey’ in Chinese. Monkey was thereby bestowed with auspicious (favorable, fortunate) meaning. Monkey years are: 1920, 1932, 1944, 1956, 1968, 1980, 1992, 2004, 2016.  

 

The New Tech Nexus

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

 

Film, Times & Events: Week of February 5

Santa Cruz area movie theaters >
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