A good example of why companies should avoid taking government money if they can: even if the government doesn't impose a lot of restrictions on you upfront, the press will retroactively.
pg, we need a clearer voice against these types of loan schemes. In the Fisker deal, the Qatar state put up a fraction of the U.S. govt investment, and is getting equity in return. The U.S. taxpayer has nothing but downside and is actually underwriting the risk in Fisker for the venture investment of players like Kleiner Perkins, Qatar, and Palo Alto Investments. It is corrupt.
Does it matter? I mean sure some people will hate you but properly not enough to lynch you. I would it imagine it would be worse for a start-up to be unknown that to have free publicity, even if it was negative.
I have moderately high hopes for Tesla, but I really can't see Fisker being a success.
It's weird-looking, expensive ($100K), has a very limited electric range (32 miles) and is incredibly fuel-inefficient (20mpg) once the battery runs out.
Furthermore, unlike Tesla, they don't seem to have a firm plan to proceed from a low-volume luxury model to a higher-volume cheaper model.
Besides, Tesla seems to have the rather limited "I'm a rich dude who wants to show how much I care about the environment by driving around in an expensive electric car" market sewn up pretty well. And the Nissan Leaf and Chevy Volt are far cheaper, generally better, and I'd trust 'em a lot more.
The only real question is how many Karmas will get built before Fisker goes bankrupt taking $528 million of US taxpayer money with it.
Car manufacturing is a really hard business to break into. If you look at the world's big car companies, they've practically all been around since the 1920s, and possibly slightly before. Kia was founded in 1944. I can't think of any companies (aside from offshoots of existing car or related motorized equipment companies) that have been sucessfully founded since the end of WW2.
Honda was founded in 1948 - which does qualify just!
Proton : formed by the Malaysian government in 1983. Yes- government created so not a fair comparison.
Perodua : other Malaysian manufacturer.
Both exist under a heavy tariff protection scheme, so possibly not good examples.
Pagani : started selling with no govt backup or protection in 1991. Very high priced, but similar market to Fisker.
Koenigsegg : created in 1994, again high priced.
Mclaren : created in 1989 as an offshoot of the racing team.
To be fair both McLaren and Pagani get assistance with engines from larger manufacturers.
There are a few more specialty/small manufacturers that have been created and still exist.
I think your original point stands that no new mass-production car companies have been created without severe government intervention.
Some of the chinese manufacturers would be interesting to study from this point of view.
I'm not sure why this is - I suspect it's related to the massively high fixed costs, but also the huge amount of government intervention that goes on in the vehicle market. There's not a market in the world that isn't affected by some type of regulatory requirements, tariff and trade protectionism etc.
I think vehicle manufacture is a bit like airlines in that many people seem to want to be involved for reasons other than making a profit.
The only one I can think of is Lotus...founded in late 50s.
The others Land Rover, Hummer, MINI etc, were all bought by others. Tata also counts...but they are part of a conglomerate that's been in business since mid 1800s
> Tesla seems to have the rather limited "I'm a rich dude who wants to show how much I care about the environment by driving around in an expensive electric car" market sewn up pretty well.
I've always wondered about that. Tesla only shipped about 2500 Roadsters before they were discontinued. I find it hard to believe that there isn't demand for 2500 units per year of a unique, high-performance car like the Roadster in California alone. It seemed like the real constraint was Tesla's inability to produce them in volume, or make money doing so.
I am willing to stand up to be a customer of Fisker, but not of Tesla.
I have places I go that are > 200 miles from home. I want to drive my fun car to these places. The Tesla can't do this. I can never be a customer of Tesla's with this restriction.
I will be buying the convertible Fisker Karma if they ever get to the point of selling it!
I have moderately high hopes for Tesla, but I really can't see Fisker being a success.
I have moderately high hopes for Honda, but I can't really see toyota being a success. Why don't we just have one company succeed and the rest of them can just go to hell. Why is it always a zero sum game?
Ish. According to a response article* , the DOE loan is earmarked to only be used for spending within the US. The company in question also has a Delaware plant that they bought from GM and are in the process of hiring for and upgrading.
Oh, I looked it up. Apparently it's an assumption of the risk if the company defaults. So if I'm understanding this correctly, from the US Government's point of view it has all the risk of giving them a loan (we're on the hook if they default), with none of the upside (if they pay it back we don't get the interest). Right?
Considering this, I think it is a good move,
"He said the decision, ultimately, was to help prevent his company from following the path of Solyndra, which exhausted nearly all of its loan money on a high-tech solar manufacturing plant in Freemont, California. "
I'd seriously consider getting a mid-sized electric SUV, but these small sport cars are just plain useless. However, I understand that for novel products like electric cars it's best to start by marketing them to people who can afford them and who can influence others to buy them...
And the headline is just misleading (like most headlines on Yahoo News): not only did the company say they've spent the money in the US, they actually can't spend them outside the country...
[+] [-] pg|14 years ago|reply
[+] [-] OstiaAntica|14 years ago|reply
[+] [-] tomjen3|14 years ago|reply
[+] [-] hugh3|14 years ago|reply
It's weird-looking, expensive ($100K), has a very limited electric range (32 miles) and is incredibly fuel-inefficient (20mpg) once the battery runs out.
Furthermore, unlike Tesla, they don't seem to have a firm plan to proceed from a low-volume luxury model to a higher-volume cheaper model.
Besides, Tesla seems to have the rather limited "I'm a rich dude who wants to show how much I care about the environment by driving around in an expensive electric car" market sewn up pretty well. And the Nissan Leaf and Chevy Volt are far cheaper, generally better, and I'd trust 'em a lot more.
The only real question is how many Karmas will get built before Fisker goes bankrupt taking $528 million of US taxpayer money with it.
Car manufacturing is a really hard business to break into. If you look at the world's big car companies, they've practically all been around since the 1920s, and possibly slightly before. Kia was founded in 1944. I can't think of any companies (aside from offshoots of existing car or related motorized equipment companies) that have been sucessfully founded since the end of WW2.
[+] [-] brc|14 years ago|reply
Proton : formed by the Malaysian government in 1983. Yes- government created so not a fair comparison. Perodua : other Malaysian manufacturer. Both exist under a heavy tariff protection scheme, so possibly not good examples.
Pagani : started selling with no govt backup or protection in 1991. Very high priced, but similar market to Fisker. Koenigsegg : created in 1994, again high priced. Mclaren : created in 1989 as an offshoot of the racing team. To be fair both McLaren and Pagani get assistance with engines from larger manufacturers.
There are a few more specialty/small manufacturers that have been created and still exist.
I think your original point stands that no new mass-production car companies have been created without severe government intervention.
Some of the chinese manufacturers would be interesting to study from this point of view.
I'm not sure why this is - I suspect it's related to the massively high fixed costs, but also the huge amount of government intervention that goes on in the vehicle market. There's not a market in the world that isn't affected by some type of regulatory requirements, tariff and trade protectionism etc.
I think vehicle manufacture is a bit like airlines in that many people seem to want to be involved for reasons other than making a profit.
[+] [-] vaksel|14 years ago|reply
The others Land Rover, Hummer, MINI etc, were all bought by others. Tata also counts...but they are part of a conglomerate that's been in business since mid 1800s
[+] [-] gamble|14 years ago|reply
I've always wondered about that. Tesla only shipped about 2500 Roadsters before they were discontinued. I find it hard to believe that there isn't demand for 2500 units per year of a unique, high-performance car like the Roadster in California alone. It seemed like the real constraint was Tesla's inability to produce them in volume, or make money doing so.
[+] [-] tomfakes|14 years ago|reply
I have places I go that are > 200 miles from home. I want to drive my fun car to these places. The Tesla can't do this. I can never be a customer of Tesla's with this restriction.
I will be buying the convertible Fisker Karma if they ever get to the point of selling it!
[+] [-] stillout|14 years ago|reply
I have moderately high hopes for Honda, but I can't really see toyota being a success. Why don't we just have one company succeed and the rest of them can just go to hell. Why is it always a zero sum game?
[+] [-] jdherg|14 years ago|reply
* ( http://www.grist.org/cleantech/2011-10-21-the-facts-on-fiske... )
[+] [-] tomfakes|14 years ago|reply
Maybe it's a bit long for a headline
This news is also 2 years old!
[+] [-] hugh3|14 years ago|reply
Oh, I looked it up. Apparently it's an assumption of the risk if the company defaults. So if I'm understanding this correctly, from the US Government's point of view it has all the risk of giving them a loan (we're on the hook if they default), with none of the upside (if they pay it back we don't get the interest). Right?
[+] [-] hariis|14 years ago|reply
[+] [-] OstiaAntica|14 years ago|reply
[+] [-] jakeonthemove|14 years ago|reply
And the headline is just misleading (like most headlines on Yahoo News): not only did the company say they've spent the money in the US, they actually can't spend them outside the country...
[+] [-] TMK|14 years ago|reply