Great news: Another green-tech stimulus recipient job flop
posted at 11:35 am on February 7, 2012 by Ed Morrissey
Last we heard from the Fisker Karma, the electric vehicle in which US taxpayers sunk $193 million so far, the loans were paying off by creating jobs … in Finland. As it turns out, even that report was too optimistic. With Fisker having burned through about 40% of the stimulus funds guaranteed by the Obama administration, they have suddenly run out of money — and will start ending jobs in the US rather than create them:
Fisker Automotive, the electric car company that received a half-billion dollars in Energy Department loan guarantees, announced layoffs at its Delaware production facility Monday.
The Energy Department agreed to loans totaling $528 million for two Fisker electric car projects: a luxury model — the$103,000 Karma which is on sale now — and a more affordable sedan, the Nina. …
“We have temporarily delayed work at the plant based on ongoing discussions with the DOE regarding funding for the Project Nina program. As a result, we have laid-off 26 people,” the company said in a statement Monday.
It’s never a good sign when a firm has to plead for more time by explaining that it’s searching for more private equity investment to get production rolling:
Fisker said it continues to pursue alternative funding sources. “We have successfully raised an additional $260 million of equity in late 2011, bringing the total amount of private equity financing to more than $850 million,” the company said.
The $193 million Fisker has received was for the production of its Karma line. That’s the model whose production got moved to Finland rather than the US, where the money was supposed to create jobs. The Karma is available for purchase, but it’s a model only affordable to the so-called 1%, unless one of the 99% plan to live in it instead of a house or condominium. Even the supposedly “more affordable” Nina would be out of range for most working Americans. Last October, Autoblog pegged the MSRP for the Nina at $45,000, more than the Chevy Volt, which isn’t exactly selling like hotcakes at the subsidized MSRP of $32,000. For the same money, a buyer could drive off the lot in a BMW 3 series car, one that won’t require several thousand dollars in new batteries in its first five to eight years on top of the purchase price.
Let’s assume that the Nina sells as well as the Volt, if Fisker ever starts production on it. Their first year would have 7700 units sold for which Fisker would have received approximately $336 million in loans (the original $529 million less the $193 million for the Karma). That comes to $43,636 in subsidies per car, or almost the entire estimated MSRP of the Nina, making the actual cost closer to $90,000. It’s just that the taxpayer would have bought half of the car.
When Joe Biden visited the Delaware plant to promote the stimulus grant, he promised union workers about 2,000 jobs on the basis of the half-billion-dollar commitment to Fisker for the Karma and the Nina. Right now the total from $193 million is -26 jobs, and another green-tech firm talking about the need to find new capital after missing its targets for the green-tech loans.