Thirteen years ago a former executive chef/kitchen manager launched an environmentally friendly cleaning products company to compete with industry giant Ecolab, his former employer, where he had worked and achieved the position of district sales manager.
Another fiscal quarter has passed and if you consume most of the mainstream and/or pro-renewable energy media, it’s been another consecutive financial smashing success for luxury plug-in maker Tesla Automotive.
That is, if you don’t subtract the buyer’s federal tax credit for each vehicle, or the California emission credits sales scheme, or state tax credits and incentives, or subsidies for battery manufacturers. Also, it’s great for Tesla and CEO Elon Musk if you disregard Generally Accepted Accounting Principles.
If you can swallow all that government market distortion, taxpayer largess and books-cooking, Tesla’s Model S is finally taking off!
The sniping and backbiting behind the financial scenes are escalating as those involved with Fisker Automotive and other green tech flops seek to direct blame for their investment failures. U.S. taxpayers, as usual, have suffered bystander casualties.
The latest controversy surrounds Silicon Valley investment firm Kleiner, Perkins, Caufield & Byers, which has suffered a series of setbacks over its strategy to place sizable wagers on so-called “clean energy” companies. Their tech bettors hit on several huge successes during the 1990s dot-com boom, which history shows was a huge bubble with a nasty burst. The same thing happened with the government-fueled housing expansion and now the renewable energy sector is ballooning for the same reason.
An audit by the Department of Energy’s Inspector General found that the persistent weak demand for electric vehicles harmed the deployment and timeliness of a $135 million-plus taxpayer funded charging network, which spun a cycle of excessive grants and project expansion, that led to an enormous waste of public money.
The investigators, led by IG Gregory Friedman, determined that conditions for reimbursement to Ecotality, Inc. (and its subsidiaries) for the EV charging demonstration project were “very generous,” although not explicitly prohibited under federal regulations.
Reports have trickled out lately that, all of a sudden, demand is so great for the all-electric Leaf that Nissan’s production just can’t keep up.
“We’re going to be short on inventory all through the summer,” said Erik Gottfried, director of electric vehicle sales for Nissan, to Automotive News. “It will be late fall before we can produce enough to satisfy everybody.”
Then the appropriate question from taxpayers should be, “What did we pay $1.4 billion for you to do in Smyrna, Tennessee then?!?”
Jalopnik.com contributor Patrick George was pointed in the right direction when he characterized DOE’s boastful Loan Program Office as “rosy,” but more accurate descriptors would be “excessive” and “unrealistic.” It’s clear his analysis was one of an automotive enthusiast and reviewer, rather than someone who regularly watchdogs government with a skeptic’s eye and knows how bureaucrats fudge and exaggerate numbers to claim credit for their politician bosses. As NLPC has reported often, DOE – before a taxpayer-backed bank check was ever issued to an electric automaker – has made absolutely unbelievable claims about jobs, fuel savings and carbon dioxide emission reductions that were to be realized as a result of their loans.
Smith’s selling point for its step vans was that, unlike electric automobiles, delivery routes in urban areas did not require a long range between refueling (or, recharging). Frequent stops and short distances alleviated the “range anxiety” that accompanies cars like the Nissan Leaf. Frito-Lay, Coca-Cola and Staples were cited as early adopters of the truck demonstration project, which was launched with the help of $32 million in taxpayer funds.
As NLPC has covered Fisker Automotive’s catastrophic flop over the last few years since it was granted a $529-million taxpayer-guaranteed loan from the Department of Energy, one big question that repeatedly came up was: How could a company that produced only one electric car model burn through $1.4 billion in investment so quickly?
Reuters uncovered a number of reasons in a report published earlier this week. Citing documents and some sources, mostly anonymous, the news syndicate painted a disturbing picture of mismanagement, incompetence, disinformation, and squander. While businesses stumble and go out of business every day, Fisker’s case illustrates why government bureaucrats are only accidental successes as investors of public money at best, but often are horrific decision makers at worst.