To celebrate his 18th birthday, Justin Bieber got a surprise gift today on The Ellen DeGeneres Show: a brand-new Fisker Karma, a luxury plug-in hybrid car. But thanks to a $529 million loan-guarantee from the U.S. Department of Energy, the sports car also comes from American taxpayers. The plug-in costs around $100,000, while Ellen DeGeneres and Bieber's agent described the Karma as "a very hard-to-get car."
Only 2,000 Karmas have been manufactured so far. Of those, 840 have been delivered to dealers in the U.S. and Canada. But in December 2011, 239 Karmas were recalled because of a fire hazard from a coolant leak.
In addition to the very low output, Fisker parallels Solyndra, the now bankrupt solar panel manufacturer. Both firms received loan-guarantees of more than $500 million from the Department of Energy. Like President Obama, who toured Solyndra's factory in May 2010, Vice President Joe Biden visited a Fisker factory in October 2009. During his visit, Biden praised the company and defended its loan guarantee, saying "This is seed money that will return back to the American consumer in billions and billions and billions of dollars in good new jobs."
To be fair, Fisker has created 500 jobs...in Finland. Fisker claimed it could not find any American manufacturers willing to assemble the Karma, so it used Finnish Valmet Automotive. Fisker did open a factory in Delaware to produce its next electric car, but the firm has already begun to layoff those workers.
Even the Karma's environmental benefits are overblown. According to the Environmental Protection Agency, the Karma has a 52 MPGe (miles per gallon equivalent) while its all-electric range is only 32 miles. On gasoline only, it garners a less impressive 20 mpg. AutoGuide.com compared the Karma to other green cars:
Like other electric cars, the Karma is eligible for a tax credit of up to $7,500. But the top buyers of electric cars are quite wealthy and really don't need government-backed incentives. In addition to Bieber, Leonardo DiCapro and Ashton Kutcher are proud owners of the Fisker Karma. Meanwhile, the average buyers of two other electric cars, the Chevy Volt and Nissan Leaf, have an annual household income of $175,000 and $140,000 respectively. Last year, Michigan Rep. Sander Levin and Sen. Carl Levin (both Democrats) even proposed doubling the $7,500 tax credit for electric cars. If accepted, these tax incentives would top $19 billion over the next ten years.