A Bump on the Road to Green

Don’t worry about Fisker’s failures. Overall, clean-energy subsidies are working fine

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J. Scott Applewhite / AP

Henrik Fisker, founder of Fisker Automotive, right, testifies on Capitol Hill in Washington, April 24, 2013.

Fisker Automotive may be kaput. But my friend Dave insisted that before I joined the parade of writers comparing the failed electric-car company to Solyndra, the other California–based manufacturer that went bust after landing a federal clean-energy loan, I had to borrow his curvaceous Fisker Karma. It’s been described as the most beautiful sedan ever built, and I must say that Dave’s sparkling ocean-blue model—there’s crushed glass coated with sterling silver in the paint—looks particularly cool. As I cruised through Miami’s South Beach, tourists kept giving me thumbs-up and taking pictures with their phones, which rarely happens when I drive my Honda Odyssey. I aired out the Karma on the highway too. It’s a pretty sweet ride.

So now I’m more qualified to conclude that yes, Fisker has a lot in common with Solyndra. And that’s nothing for the government to be embarrassed about.

President Bush signed the loan program into law in 2005. He let it languish, but President Obama expanded it and started handing out cash to solar manufacturers, wind developers, fuel-efficient-car makers and other clean-tech businesses in 2009. The goal was to commercialize cutting-edge green technologies that could reduce the U.S.’s foreign-oil -addiction and carbon emissions while creating jobs in tomorrow’s industries. Everyone knew some loans would go bad. The hope was that some loans would change the world.

Fisker probably won’t, but that doesn’t mean it was a dumb bet all along. An exhaustive Republican investigation found no wrongdoing connected to the Solyndra loan, and there’s no reason to think the Fisker loan was shady either. Like Solyndra, it was once considered a game-changing example of American innovation. Like Solyndra, Fisker raised a billion dollars from private investors. But like Solyndra, Fisker couldn’t cut it in the marketplace. The $100,000 Karma broke down on the Consumer Reports test track. Its display panel is a mess; I couldn’t get the radio to work. Fisker had awful production problems and ultimately sold only about 2,000 Karmas before suspending operations. Its second model, which was supposed to revive a shuttered GM factory in Delaware, was never built. The Energy Department cut Fisker off after it drew down just $192 million of a half-billion-dollar loan.

So it goes. Companies that receive tax breaks and subsidies fail all the time. Ordinary Americans who get tax deductions and subsidies fail too. Success is not guaranteed in a capitalist economy. The loan program provided a jump start, not a free ride. But Solyndra’s failure has overshadowed a spectacular boom in the -solar industry, which has grown more than tenfold since Obama took office. Fisker’s failure could overshadow similarly impressive growth in plug-in electrics; there were almost none on U.S. roads before 2008, and now there are more than 100,000. During a presidential debate, Mitt Romney memorably lumped in Tesla Motors with Fisker as an Obama-supported “loser,” but Tesla just had its first profitable quarter and is on track to pay back its federal loan five years early. Its Model S has won the big car-of-the-year awards and received the highest Consumer Reports score of any car since 2007; its reviewers have sounded like teenage boys reviewing porn. So who’s the loser?

The larger point is that overall, as an independent review by Republican Senator John McCain’s finance chairman confirmed, the Energy Department’s $40 billion loan portfolio is performing well. It’s also transforming the energy landscape with America’s largest wind farm, a half-dozen of the world’s largest solar plants, cellulosic biofuel refineries and much more. Obama didn’t support one company or one technology; he supported all kinds of plausible alternatives to fossil fuels. He didn’t pick winners and losers; he picked the game of cleaner energy. And we’re winning. The U.S. has doubled its production of renewable power. Our carbon emissions are at their lowest levels since the early 1990s. And after decades when the U.S. invented products like solar panels and lithium–ion batteries only to see them manufactured and deployed abroad, we’re finally making green stuff at home. For example, not only are we generating twice as much wind power, we’re making twice as many of the components for U.S. wind turbines.

Unfortunately, Dave’s ocean-blue midlife–crisis car probably won’t be one of those things we’ll make. The Karma will become a collector’s item, a 21st century DeLorean, a reminder that even sexy products can stumble in the marketplace. But that’s not a scandal. That’s just a bump on the road to a green future.

6 comments
BerkeleyChoate
BerkeleyChoate

Michael: You say that the DOE's loan portfolio is performing well. Can you substantiate that assertion? On a topic as politicized as this, the hard data is critical. All the posturing, pontificating and allegations loose their weight in the face of facts.

La_Randy
La_Randy

While the company and its product may fall by the wayside, their innovations will not be forgotten. If this company fails then another, with a better business plan, will emerge to carry the technology forward. I have no problem with the Government financing risky tech, with rigorous caveats, to promote game changing innovation.

Have we not always done this?

MrObvious
MrObvious

Thanks for posting this; it shows that despite the ignorant howling that people who don't know, fail to see the big picture. It's not about the ONE company stumbling, it's about what's happening across the entire spectrum of renewable energy - be it the energy source itself or a good end product like plug in electric vehicles and similar items.

spodso
spodso

@La_Randy I love for the government to subsidize green energy automobiles for the 1%ers. Twice actually; 1) guaranteed loans and 2) thousands of $ers discount on the car. Only in America.

LanceSjogren
LanceSjogren

Until the left stops pretending that alternative energy is anywhere close to being to serve as a substitute for fossil fuels, we are not going to get very far.  

Religious fervor is not a foundation for our energy future.  Science and technology are.  You can't cheerlead your way to a renewable energy future.  We can engineer our way to one, provided our elected officials and environmental cheerleaders like Grunwald start advocating a science-based energy policy rather than a faith-based one.


What that means is acknowledging that alternative energy sources aren't anywhere close to being able to supply any meaningful portion of our energy supplies.  It means acknowledging that they won't be until and unless a solution to the intermittency problem is found.  It means heavily funding BASIC RESEARCH into alternative energy, not production facilities for sources that are at least decades away from being viable as anything more than novelty items.

EricSandeen
EricSandeen

@LanceSjogren EVs (and their batteries) together with intermittent alternative energy sources could actually go a fairly long ways towards solving some of those problems.  With proper integration & communication, EVs could react to that intermittancy, soaking up solar or wind power as it becomes available.

A Nissan Leaf, at about 3 miles/kWh and 30 miles/day of urban driving would require about 10kWh/day of energy.  A small 10-panel array would provide that much, even in Minnesota.  And that's a fact, not cheerleading.


Details to work out?  Sure.  But it's not wholly impossible to move forward with the technology we have today even as we research future options.