More Loan Disasters Like Fisker and Solyndra Could Be On the Way
The word on the street is that the Obama administration is ready to reignite the Department of Energy loan program for alternative vehicles. I think I've harped on Fisker Automotive, Vehicle Production Group and the battery-failure twins Solyndra and A123 Systems enough for you all to remember that each one of these flops received large loans from DOE... and failed to pay them back. The controversial loan program was taken offline by then department head Steven Chu two years ago. Well, it's back.
Chu’s successor, Ernest Moniz, is hoping that the department can jump-start the loan program again -- and the department is hoping to gain support by pointing to companies that did succeed. Although many of the DOE’s success stories were overshadowed by the nightmare of Fisker Automotive and defaulting battery companies, not all loan recipients were total flops (at least there’s some good in this story?). In fact, a few are chugging right along. Case in point: Tesla Motors. Other loan recipients: Ford Motor Company and Nissan — both for their battery-based vehicles.
I’m all for research, new technology, and reducing the amount of times I need to fill up my car, but I worry that the push for the return of this program might lead to Fisker Automotive 2.0…
As quoted from The Detroit Bureau:
But proponents point to the need to rush new technologies to market to meet upcoming increases in fuel economy standards – and they point to California start-up Tesla Motors as a successful example of what the ATVM program was meant to achieve.
I really hate the word “rush”…
Yes, I get the need to start some serious R&D on new projects to meet the impending guidelines on fuel economy, but let’s not waste taxpayer dollars in order to meet this goal. Until we have a better grasp on battery capabilities and the prices for electric vehicles fall to affordable levels (let’s go with less than $40,000 for a car) so that people can actually BUY them, I think we should be cautious. If this program ever gets off the ground again, there needs to be a serious revamp. Stricter requirements for loan applicants, more oversight regarding how recipients use the money, and instantaneous termination from the program if the company runs into trouble should all be present in DOE Loan Program Part Deux. Fifteen billion dollars is maturing in a make-believe bank account somewhere, waiting to be fed to hungry start-ups and established companies — we should make the most of it.
Here's to crossing our fingers that the government learns from their past mistakes.