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Apr 24th
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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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Best of Santa Cruz County 2014

The 2014 Santa Cruz County Readers' Poll Come on in, and have a look around. There’s a lot to see—hundreds of winners selected by thousands of GT readers across Santa Cruz County. So if some of this looks familiar, it’s probably because you helped make it happen. But there are always new things to discover, too—you could go to a different winner or runner-up every day in the Food and Drink category alone, and you’d be booked just about until next year’s Best of Santa Cruz County issue comes out.

 

Something Essential Disappears

Lunar and solar eclipses follow one another. Lunar eclipses occur at full moons, and solar eclipses at new moons. Two weeks ago at the full moon we had the blood red moon—a total lunar eclipse (the next one is Oct. 8). On Monday night, April 28 (new moon), as the Sun, Moon and Earth align, a solar eclipse (Sun obscured) occurs. Eclipses signify something irrevocably is changed in our world. The Sun is our essential life force. Monday’s new moon, 9 degrees Taurus, is also an annular solar eclipse when the Moon moves centrally in front of the Sun, yet does not cover the Sun completely. The Sun's outer edges, still visible, form a “ring of fire” around the Moon.

 

Sugar: The New Tobacco?

Proposed bill would require warning labels on sugary drinks Will soda and other saccharine libations soon come with a health warning? They will if it’s up to our state senator, Bill Monning (D-Carmel). On Feb. 27, Monning proposed first-of-its-kind legislation that would require a consumer warning label be placed on sugar-sweetened beverages sold in California. SB 1000, also known as the Sugar-Sweetened Beverages Safety Warning Act, was proposed to provide vital information to consumers about the harmful effects of consuming sugary drinks, such as sodas, sports drinks, energy drinks, and sweetened teas.

 

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