Fisker treads carefully between DOE watchdog and skeptical senators

The DOE hired a consulting firm to keep tabs on some of the companies that have received loans under the Advanced Technology Vehicle Manufacturing program.

 

The football that is federal funding for Fisker continues to be passed around, with neither team scoring a goal. Bloomberg reported this week that the DOE hired consulting firm Houlihan Lokey last October to keep tabs on some of the companies that have received loans under the Advanced Technology Vehicle Manufacturing program.

The department didn’t mention Fisker specifically, but it seems likely that it’s been under the microscope since February, when it was forced to lay off employees and suspend development of its planned second car (more recently, the company raised $392 million in private financing, which should enable it to bring the Atlantic to production).

Also this week, Senators Chuck Grassley (R-Iowa) and John Thune (R-South Dakota) sent a letter about Fisker to Energy Secretary Steven Chu. The letter recapped Fisker’s troubles, asked for details on the DOE’s decision-making process, and noted that “it would seem questionable how financing $100,000 luxury class automobiles would be the best use of taxpayer money.”

DOE spokesman Dan Leistikow replied to similar criticism in October, pointing out that Fisker and Tesla “plan to start with high end vehicles and then quickly move to more affordable product lines. These are start-up companies that intend to grow over time, so they are following a common pattern for emerging companies: starting with a premium product for a smaller customer base, and eventually moving to lower cost, mass marketed products as they gradually scale up operations.” Leistikow also noted that the largest DOE loans went to Ford and Nissan, which used them to develop more mid-market vehicles.

Senator Grassley: “It’s important to know what went into the Energy Department’s decision to fund the production of expensive luxury vehicles. The riskiness of loans to companies that may or may not be able to pay them back deserves scrutiny.”

 

Source: Bloomberg, Green Car Reports
Image: Fisker