Electric vehicle technology doesn't need roadblocks
The financial plight of Fisker Automotive has prompted complaints about electric vehicles and the road we are taking toward perfecting the technology.
As the LA Times reported, the Anaheim-based company failed to make a $10 million federal government loan payment.
The Times quotes Aoife McCarthy, an Energy Department representative, as saying, “Given the obvious difficulties the company is facing, we are taking strong and appropriate action on behalf of taxpayers. Using the safeguards we write into our loan agreements, the Department stopped disbursing on the loan in June 2011 after the company fell short of the aggressive milestones that we had established as a condition of the loan. As a result, while our original loan commitment was for $529 million, only $192 million was actually disbursed.”
As the Times notes, taxpayers are out still out $171 million.
The true victims, though, seem to be the private investors who couldn't help themselves from pumping tens of millions of dollars into the company after witnessing the government largess. At least that seems to be the point Charles Lane is trying to make in his column in today's Washington Post.
“All told, Fisker attracted $1.1 billion in private investment, the vast majority of which took place after it got the DOE loan,” Lane writes.
I do agree with Lane when he writes, “Government can efficiently affect energy usage through fuel taxes and basic research. When it intervenes on behalf of specific technologies and specific companies, however, bad things happen—resource misallocation, windfall-seeking, even, sometimes, corruption.”
I favor investment in precompetitive research to investment in particular companies, although there may opportunities for both. Tesla, for example, has turned a profit, despite what Lane might consider a pernicious $465 million low-interest U.S. government loan that Tesla plans to pay off five years ahead of schedule.
Charles Lane just doesn't seem to like electric vehicles, as I have reported previously. Bjørn Lomborg at Slate doesn't seem to either, despite the headline “Someday, Electric Cars Will Be Great.” The subtitle is “Right now, they are expensive, inconvenient, and not very good for the environment.”
The problem with Lomborg's viewpoint is that it fails to chart a course to that “someday” when “electric cars will be great.” Will this occur by magic? Of course not. It’s going to take ongoing investment (by private or government entities or both) and experimentation by manufacturers and early adopters, some of whom might be inconvenienced along the way.
As filmmaker Chris Paine notes in the Washington Post, the possible end of Fisker Automotive does definitely not signal the end of electric cars. He writes, “Fisker’s struggles can be attributed, in part, to the fact that startups in any industry have a high rate of failure, and launching a start-up in the automotive sector is especially expensive. That makes it all the more impressive that Fisker’s rival Tesla turned a quarterly profit this year.”
Paine quotes former GM vice chairman (“and former electric-car-basher”) Bob Lutz as saying, “The electrification of the vehicle fleet is a foregone conclusion.”
I agree, and we don't need people erecting unnecessary roadblocks along the way.