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| The Federal Government's Latest Wager on "Green" Tech |
It's not going so well thus far.
After tossing $535 million at Solyndra, the solar panel company in California, and losing it after that company declared bankruptcy, we were told that it was a gamble, a bet. This, despite the sirens wailing all around them from industry experts who said it was like betting on a lame horse to show in the fifth race. Here's hoping that Congressional investigations into that fiasco yield some results, because it turns out that the Solyndra executives were pretty heavy contributors to camp Obama.
The newest case of Fisker Automotive bears some striking similarities to that of Solyndra, with an added twist; it seems our government lent a slightly smaller amount of cash, but this time to a green company that will outsource its production facilities.
Fisker Automotive raked in $529 million from the Obama administration last year to build electric cars in the United States, even dragging Vice President Joe Biden on a publicized tour of a vacant GM plant in Delaware (his home state as a senator), where the Veep beamed about the potential job creation in that district. Fisker was going to fire up the old building and start pumping out electric cars that would make Americans feel good about their carbon footprints once behind the wheel of Fisker cars. (The carbon footprint of these cars is a myth we'll examine later).
The loan was first announce in 2009, but two years later the company's founder, Henrik Fisker, determined that there was " no contract manufacturer in the U.S. that could actually produce our vehicle". "They don't exist here", Fisker said. So the company is building it's luxury electric sedan in Finland. I guess Finland's unemployment rate dropped a bit, thanks to the American taxpayers struggling to keep or find a job.
What is particularly galling is Fisker's words. Are we to believe that a nation that -- at the behest of President John F. Kennedy -- scrambled to produce a Lunar Excursion Module (LEM) that would land men safely on the moon and get them back to the ship that would ultimately bring them back home to Earth is incapable of building an electric automobile?
Mr. Fisker is being just a trifle disingenuous. The reason, as he cryptically admits, is not that we couldn't build the product; it's just that we couldn't do it for the money he was willing to pay in wages and expenses in the United States. Perhaps the United Auto Workers union (UAW) was one impediment, and perhaps high taxes and constricting EPA regulations were also in the equation. Nevertheless, Fisker had this to say:
"We're not in the business of failing; we're in the business of winning. So we make the right decision for the business. That's why we went to Finland."But failing is exactly what has some watchdog groups and industry analysts so spooked. One problem is the fact that the Karma is more than a year late in rolling out. Only 40 have been produced so far, and only two have been delivered. One went to actor Leonardo DeCaprio, which is understandable considering the price tag of $97,000. More are promised soon, according to ABC News , but not many people will be willing to take out a mortgage to buy one. Future sales could lag considerably enough to cause a cash flow problem for Fisker, despite the inexpensive production in Finland.
Another problem with this vehicle -- and others like it, electric vehicles that are allegedly environmentally friendly -- is that it is not exactly very "green". This is sure to cause a modicum of embarrassment for one of the venture capital partners steering money into the project; Al Gore. The EPA has given the Karma a miles-per-gallon equivalent (MPGe) rating of 52. Sounds rather impressive until one examines the true fossil fuel consumption needed to make the darned thing go. Thankfully, Warren Meyer of Forbes.com has done the heavy lifting in that regard.
The Karma has a range of 32 miles after which it switches to the gasoline source. In this mode, the car earned an MPG rating of just 20. As Mr. Meyer also points out, the EPA conveniently skipped around a standard set by the Department of Energy (DOE) back in the Clinton administration. Dubbed "well to wheels", this standard incorporates the fossil fuel consumption required to produce the electricity needed to power cars like the Karma. In determining the MPGe of the Karma, the EPA began their analysis after the first step of electricity creation.
An analogy from Mr' Meyer's article:
Lets consider an analogy. We want to measure how efficiently two different workers can install a refrigerator in a customer’s apartment. In both cases the customer lives in a fourth floor walkup. The first installer finds the refrigerator has been left on the street. He has to spend much of his time struggling to haul the appliance up four flights of stairs. After that, relatively speaking, the installation is a breeze. The second installer finds his refrigerator has thoughtfully been delivered right to the customer’s door on the fourth floor. He quickly brings the unit inside and completes the installation.
So who is a better installer? If one only looks at the installer’s time, the second person looks orders of magnitude better. But we know that he is only faster because he offloaded much of the work on the delivery guys. If we were to look at the total time of the delivery person plus the installer, we’d probably find they were much closer in their productivity. The same is true of the mileage standards — by the EPA’s metric, the electric vehicle looks much better than the traditional vehicle, but that is only because someone else at the power plant had to do the really hard bit of work that the traditional auto must do itself. Having electricity rather than gasoline in the tank is the equivalent of starting with the refrigerator at the top rather than the bottom of the stairs.
Mr. Meyer thus concludes that the true MPGe of the Karma is 19. Not very good for the planet after all.
With a price tag beyond the means of most Americans and without the warm, fuzzy feeling of saving the planet, the allure of the Karma, et al, becomes somewhat dull. This could prove to be a problem for the company and ultimately for you, the taxpayer. Are we seeing Solyndra on wheels, then? Sphere: Related Content
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