Energy loses $139M on loan to electric car maker
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Posted on November 22, 2013 at 5:03 PM
Updated today at 6:06 PM
WASHINGTON (AP) — The Obama administration said Friday it will lose $139 million on a loan to struggling electric car maker Fisker Automotive Inc. after selling part of the loan to a private investor that immediately took the company into bankruptcy.
Hybrid Technology LLC, the California car marker's new owner, said it plans to keep Fisker operating after it emerges from bankruptcy.
The $139 million loss is the largest in the Obama administration's green energy loan program since the 2011 failure of solar panel maker Solyndra. The government lost $528 million in the Solyndra collapse, triggering sharp Republican criticism of the loan program and President Barack Obama's investments in green energy.
The Energy Department awarded Fisker a half-billion loan guarantee in 2009, but suspended it in 2011, after Fisker failed to meet a series of benchmarks. Fisker had received $192 million before the loan was frozen.
The Energy Department said it had recovered about $28 million before selling the remainder of the loan to Hybrid on Friday for $25 million. Hybrid is owned by Hong Kong billionaire Richard Li.
The department's actions, along with the sale, mean the Energy Department has protected nearly three-quarters of its original commitment to Fisker, Energy spokesman Bill Gibbons said Friday.
"While this result is not what anyone hoped, the ($139 million loss) represents less than 2 percent of our advanced vehicle loans, and less than one-half of 1 percent of our overall loan program portfolio" of more than $30 billion, Gibbons said.
Rep. Marsha Blackburn, R-Tenn., vice chair of the House Energy and Commerce Committee, called that small solace.
"Once again, American taxpayers are losing out to foreign investors due to the Obama administration's failed green energy policies," Blackburn said. "Time after time this administration has fumbled the ball with their attempts to pick winners and losers when it comes to American energy."
In September, the Energy Department lost about $42 million on a loan to a shuttered Michigan company that made vans for the disabled. Vehicle Production Group, or VPG, suspended operations in February and laid off 100 workers. The company has said it plans to continue production of the wheelchair-accessible vans, which are powered by natural gas, at its Indiana plant.
A spokeswoman for Hybrid Technology said Fisker's new owners are committed to ensuring that the car company, which makes the $100,000 Karma plug-in sedan, continues to design and manufacture electric cars.
"We will work to realize the full potential these fantastic cars offer in helping to remake the auto industry for the 21st century," Caroline Langdale, a spokeswoman for Hybrid, said in a statement.
Langdale declined to say where the company will make its cars, but the Energy Department said Hybrid has committed to moving manufacturing of the Karma from Finland to the U.S., with engineering and design remaining in California.
Blackburn said Fisker is an example of what she called the Obama administration's misguided policies. The loan guarantee program "is quickly becoming a highly utilized stimulus program for foreign investors," she said.
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