This afternoon the House Committee on Oversight and Reform will hold a hearing entitled, "Green Energy Oversight: Examining the Department of Energy's Bad Bet on Fisker Automotive," about the imminent bankruptcy of that would-be electric car maker. As all the world knows, the Obama Administration's minions shoveled billions in loan guarantees out of the Department of Energy in a bid to jumpstart a Clean Energy Revolution.
Then came the parade of bankruptcies: Solyndra, Beacon Power, Ener1, A123 Systems, Range Fuels, Abound Solar, and more. Yesterday, Reason 24/7 reported that the Department of Energy has seized $21 million from Fisker, the electric car company that received $192 million in federal loans that were suspended amid problems in 2011.
Today's New York Times reports:
Veering on the edge of bankruptcy, without a buyer in sight, Fisker has become — to lawmakers and others — the Solyndra of the electric car industry. Not only private backers but millions of dollars in government loans gave life to a company, some would argue, that was a shaky investment from the start.
No electric vehicle initiative backed by Washington seems more of a debacle than Fisker, which was given a $529 million federal loan in 2009 to advance the project. Two years later, after Fisker repeatedly missed production targets and other deadlines, the Energy Department suspended the loans.
Of course, the world-weary venture capitalists at DOE can explain it all away:
An Energy Department spokeswoman, Aoife McCarthy, said the loan to Fisker was one of only a handful of 33 clean-energy loans that did not prove successful. She asserted that its problems should not be considered representative of the Obama administration's broader efforts to promote cleaner cars.
"There will always be an element of risk with investments in the most innovative companies," she said. Major automakers like Ford and Nissan received billions of dollars in federal loans to produce electric cars and, so far, have succeeded.
Of course, when venture capitalists take risks with their own money, that's a bit different than when bureaucrats risk taxpayer dollars.
And Ford and Nissan have succeeded so far? That remains to be seen. In the case of Nissan, it's battery plant in Smyrna can manufacture 200,000 Leaf all-electric car battery packs per year, but since demand for the Leaf is running at 2,000 per month, it actually produces around 24,000 per year. By the way, the project is backed by a $1.4 billion federal loan.
The Times quotes Detroit-based corporate restructuring executive Van Conway:
"The government is playing in a space where they have to recognize their limitations."
Maybe an argument can be made that the government should support basic and applied research, but the overwhelming evidence is that the feds do a terrible job when it comes to development and commercialization.