The Truth About Cars » department of energy The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 20:45:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » department of energy Gasoline Power To Dominate U.S. Highways Through 2040 Fri, 20 Dec 2013 13:30:56 +0000 2014 Chevrolet Corvette Stingray

The green warriors who hoped EVs and hybrids would be the dominate force on the highways of America may need to wait a bit longer: the United States Department of Energy predicts gasoline will be the fuel of a generation until at least 2040.

In fact, the DOE’s Energy Information Administration states in a report issued earlier this week that 78 percent of all vehicles on the road in 2040 will still burn fossil fuels, though more efficiently; the EIA predicts an average of 37.2 mpg at that point in time. While 42 percent of all vehicles will use some form of advanced fuel-saving technology, plug-in hybrids and full EVs will each account for only 1 percent of sales.

As for the pump, the EIA believes a gallon of gas will rise to the equivalent of $3.90, with diesel tagged for $4.73. The agency also predicts 30 percent increase in miles traveled from 2012 through 2040, and overall fuel consumption in the nation’s transportation sector to fall by 4 percent.

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Fisker Files For Chapter 11 Bankruptcy Mon, 25 Nov 2013 05:51:47 +0000 Fisker Karma Courtesy

What do Justin Bieber, Ashton Kutcher and Al Gore all have in common? They may soon — baring a miracle — become the proud owners of the first orphan cars made in the 21st century for well-moneyed consumers by an automaker born in the 21st century, as Fisker Automotive has filed for Chapter 11 bankruptcy protection.

Unlike Chapter 7, where everything is liquidated and everyone is laid off forever (an experience this writer has gone through herself with her last full-time employer), Chapter 11 will allow Fisker to attempt to get it together through reorganization with Richard Li of Hybrid Tech Holdings, LLC at the helm. Li purchased Fisker in a United States government auction last month for $25 million.

As for who this bankruptcy filing affects, look no further than your wallet: Fisker Automotive was one of a few automakers who took out a loan from the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing program. The total note was $529 million, though Fisker only took $192 million from the government while also taking $525 million from private investors. While the DOE recouped $28 million from the automaker’s first missed payment, the government (and thus, the taxpayer) lost $139 million on the investment.

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Fisker’s Dept of Energy Loan to be Auctioned Off Today Fri, 11 Oct 2013 19:39:06 +0000 atvm-550x472

The United States Department of Energy will today auction off Fisker Automotive’s loan from the federal government, on which the moribund hybrid car startup defaulted. Last month the department said that it would hold the auction after “exhausting any realistic possibility” that it could recoup all of the $168 million still that Fisker still owes.


Purchasing the debt could be the first step to revive Fisker, which hasn’t built any cars in over a year. The company hasn’t yet gone through bankruptcy, as investors are covering its day to day expenses, but it cannot pay millions of dollars in outstanding bills and it has laid off most of its employees. Company founder designer Henrik Fisker, resigned last March, citing differences of opinion on the company’s future.

Though the federal government is currently undergoing a partial shutdown, the auction will proceed as planned today.Bidders had until Monday of this week to tell the DoE that they planned to make an offer. To qualify to bid, potential buyers had to offer at least $30 million, with a mandatory 10% down payment when placing the bid. That would be the least part of restarting Fisker, which analysts say could cost a half billion dollars or more. Fisker Automotive and the law firm handling its restructuring, Kirkland & Ellis, could not be reached for comment.

The winner of the bid process could be named as soon as next week. The DoE originally extended Fisker a credit line of $528 million under the Advanced Technology Vehicles Manufacturing loan program in 2009, but the department froze it in mid 2011 after Fisker failed to meet production benchmarks specified in the loan. Of the $528 million allocated, Fisker drew down $192 million before the freeze.

So far this year, at least three possible buyers of Fisker have surfaced. German investment group Fritz Nols AG, according to sources, was one of the companies that submitted a bid to the DoE. Another team that includes Bob Lutz and Chinese auto supplier Wanxiang Group also submitted a bid. That group had previously tried to buy the entire company for $20 million. It’s not clear if that attempt is related to VL Automotive, an enterprise of Lutz’s that’s selling the Destino, a Fisker Karma whose hybrid drivetrain has been replaced by a supercharged LS9 V8 as used in the Corvette ZR1. It’s also been rumored that Henrik Fisker might try to purchase the remains of his namesake company.

Buying the DoE loan would be just the first step in a long process to revive the company. Fisker currently owes suppliers about $80 million, including about $10 million owed to Valmet Automotive, a Finnish company that assembled the Karma under contract. Analysts say that restarting Karma production would cost at least $50 million and reviving the development of the Atlantic, Fisker’s proposed $50,000 sedan, would cost about half a billion dollars.

Any purchaser would also have to settle Fisker’s outstanding debts related to the former General Motors assembly plant in Wilmington, Delaware where Fisker planned to build the Atlantic. The company owes about a million dollars in various local taxes and because it missed a deadline to pay, the company has forfeited a break on future county property taxes.

At the time this was posted, ~3:00 PM EST, there has been no news released about the auction results. The Department of Energy’s public affairs office is still operating during the partial government shutdown, TTAC has contacted that office, and we’ll update this post if they release any information by the close of business today.

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EV Charging Station Maker Ecotality Files For Ch. 11 Bankruptcy, Potential Asset Sale Thu, 19 Sep 2013 16:46:18 +0000 blink

EV charging system maker Ecotality has filed for Chapter 11 bankruptcy protection from its creditors, saying that it wants to sell its assets in an auction. The Associated Press is reporting that Ecotality might be forced to sell or file for bankruptcy after the U.S. government suspended payments as part of the Department of Energy EV Project. Ecotality, based in San Francisco, makes charging and power-storage systems for electric vehicles under the Blink and Minit Charger. It also makes charging stations for Nissan’s Leaf brands, and provides testing services for government agencies, auto makers and utilities. The company now says that it would prefer to sell its assets through a court approved bankruptcy auction.

Ecotality has received funding from the state of California and the federal governments of Australia and the United States, including more than $100 million in funding from the Department of Energy since 2009. The Energy Department suspended payments to Ecotality last month after the company said that it might not be able to find new financing to meet benchmarks demanded by the DoE program.
Ecotality lost $9.6 million in 2012 on $54.7 million in revenue, an improvement over its $22.5 million loss in 2011. However, the charging station maker said in a SEC filing in August that it was not selling sufficient commercial products to sustain operations through the end of 2014. The company had recently announced that due to “unacceptable performance” during testing it would not release a new industrial Minit Charger as scheduled. If all that bad news was not enough, Ecotality is also facing an investor lawsuit based on allegations of failing to meet federal securities laws.

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U.S. Dept. of Energy to Auction Off Fisker Loan Wed, 18 Sep 2013 11:30:43 +0000 atvm

The United States Department of Energy has announced on its website that it will auction off the loan that it made to Fisker Automotive, a loan for which the hybrid luxury startup carmaker only repaid a small fraction of the principal. Peter Davidson, the executive director of the department’s Loan Program Office, told Automotive News that the DOE decided to auction off the loan, “after exhausting any realistic possibility for a sale that might have protected our entire investment.”

Fisker originally won a $529 million loan guarantee from the DOE’s Advanced Technology Vehicles Manufacturing Loan Program in September 2009, from which it drew down $192 million before defaulting. After the Energy department ruled that Fisker was not complying with terms of the loan, missing important deadlines and struggling to make its payments on the loan, it froze the rest of  Fisker’s credit line in May 2011. Less than $21  million of the $192 million was repaid.

Fisker built about 2,450 Karmas and according to Reuters it lost $35,000 or more on every one of the $100,000+ extended range hybrid cars. Company founder Henrik Fisker resigned in March 2013 citing differences with management. Soon after that, Fisker Automotive defaulted on its government loan and hired bankruptcy advisors. All but a few FiskerAutomotive employees were laid off this spring.

The Fisker Automotive brand and rights to produce the Karma have attracted a number of potential buyers including Fritz Nols AG, a German investor group lead by Ingo Voigt. According to the Autobild magazine, Fritz Nols has offered $25 million for Fisker. In a Facebook post last week, Voigt said that his group had submitted a “detailed offer including a signed [letter of intent] and a short presentation of our restructuring plan” to the DOE. Chinese auto parts maker Wanxiang Group and a Hong Kong investment group have also expressed interest.

Bids on the remaining $168 million in Fisker’s outstanding debt are due by Oct. 7. The auction will take place Oct. 11. Davidson said that the DOE “will require all bids to include a commitment and business plan that promotes domestic manufacturing capabilities and related engineering for advanced technology vehicles here in the United States.”

Fisker Automotive had no comment.

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U.S. Dept. of Energy to Resume ATVM Alternative Vehicle Loan Program Wed, 28 Aug 2013 15:38:07 +0000 Picture-491

Though it has been criticized by those who oppose government financing of business, in part because of the failure of Fisker, one of the recipients of the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing loan program, the DoE has announced that it will resume marketing the ATVM to industry and possible applicants. About 60% of the $25 billion that Congress allocated to the program still remains. No loans have been made since 2011.

“With no sunset date and more than $15 billion in remaining authority, the program plans to conduct an active outreach campaign to educate industry associations and potential applicants about the substantial remaining funds available and the application process in general,” a Dept. of Energy spokeswoman said.

Demand for the low interest loans may not be as high as it was when the program began disbursing funds in 2009, following the financial crisis which tightened credit and made it difficult for alternative energy firms, many of them startups, to find financing. Now that private capital is available at low interest rates, businesses may opt for private rather than public funding.

Some of the criticism of the ATVM program was due to the failure of other, unrelated, government loan programs, like the hundreds of millions of dollars loaned to Solyndra, but the ATVM program itself approved only five loans, the Ford, Nissan, Tesla, Fisker and mobility van maker Vehicle Production Group. Fisker and VPG were not successful, but Tesla has repaid their loan and Ford and Nissan are currently profitable and paying down their ATVM loans.

Analysts say that because of the political controversy involved, if any loans are extended, they will be to applicants looking for supplemental funding, not a main source of capital.

The DoE announcement was greeted with criticism by South Dakota Republican Sen. John Thune. “From Solyndra to Fisker, taxpayers have already paid too much for President Obama’s risky green energy bets. Now is not the time to revive defunct Department of Energy loan programs that have already wasted hundreds of millions of taxpayer dollars.”

Though the ATVM program began loaning money in 2009, the program was created in 2008 by the administration of George W. Bush with the support of congressional Republicans.

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Has the Dept of Energy’s Advanced Technology Vehicle Manufacturing Program Been a Failure? Not Really Sat, 18 May 2013 22:35:38 +0000

Click here to view the embedded video.

Critics of the current administration have pointed to the impending bankruptcy of Fisker Automotive and the recent suspension of operations at taxi maker Vehicle Production Group as examples of why the government shouldn’t be picking winners and losers in it’s zeal to promote alternative energy. The DoE effort under which those two companies received financing is the Advanced Technology Vehicle Manufacturing Program, ATVM. Putting aside political ideologies, contrary to the image given by the apparent failure of Fisker and VPG, the ATVM program actually has a pretty decent track record when it comes to picking winners and losers.


Revolution Motors

The ATVM was actually started during the Bush administration, in 2007 and received $25 billion funding from Congress in 2008, before President Obama took office, though the final determination of all loans awarded so far has been made by the Obama administration. Only a few loans have been made so far, so it’s easy track the program. In part the small number of loans is because of the political fallout over the 2011 failure of Solyndra, which got over a half billion dollars from the DoE as part of a different program at the DoE. So far less than $9 billion of that $25 billion has been awarded and none since March of 2011, though in the video above, posted in March of 2012, the Department of Energy explicitly was soliciting more companies to apply for loans.


Vehicle Production Group

Of the car companies that were actually awarded loans, the DoE did pretty well, three out of five seem to be thriving. Ford was the primary recipient of ATVM loans, $5.9 billion, used to upgrade factories in six states. Nissan came next, with $1.45 billion, used for a battery factory and preparing their Smyrna, Tennessee plant for Leaf production. Tesla, currently flying high with investors and now producing Model S EVs at a rate of 20K/year, got $465 million and has repaid it in full.



The status of Ford and Nissan’s debt to the ATVM is unclear, though I presume they are not behind in their payments. Ford has been very aggressive in retiring corporate debt since its turnaround following the mortgaging of the company for something like $23.6 billion in 2006. Of the two failures, Fisker got promised just over a half billion, of which about $200 million was drawn before the DoE put the brakes on after Fisker failed to meet loan criteria, and VPG got the smallest loan, $50 million.


Bright Automotive

Not only is the ATVM currently batting .600 on moneys disbursed, looking at the companies that have been turned down for loans, the Department of Energy has actually done a even better job picking winners and losers in determining which startup car companies had truly viable business plans.



While it’s true that two out of the three startups funded under the program are failures, assuming that Tesla is indeed a success, those three were the only automotive startups out of 18 that applied were approved for loans. We know about seven of those rejected because they went public with the denial. All seven are pretty much out of business today. Of them, only Coda actually produced real production cars for sale to the public and in their case they only sold about 100 cars. Perhaps if your business model is significantly dependent on government financing, maybe you need a different business model. Tesla has had ample private financing and looks to be viable, but Fisker had over a billion dollars put up by private investors, about six times the amount loaned by taxpayers, and even that wasn’t sufficient.


XP Vehicles

In addition to Fisker, VPG and Tesla, whose loans were approved, companies that applied for loans and went public with their refusal, were:

Company Loan Request Amount Company Status as of 5/13
Bright Automotive  $450 million  Shut down 2/12
Aptera  $150 million  Shut down 12/11
Coda  $334 million  Filed for bankrupcy 5/13
Think  Withheld under privacy laws  Multiple bankruptcies
Carbon Motors  $310 million  Plant shuttered
Next Auto Works  $342 milion  Factory cancelled in 2011
XP Vehicles  $40  Suing Dept of Energy over claims of political bias

Next Autoworks

Actually, a lot more than 7 other companies applied for loans. A Freedom of Information Act request filed in 2009 revealed a list of 108 applicants. So in all, there were only five companies approved for ATVM loans and 103 that were rejected or put on hold. Looking over the FOIA response, I identified another eight automobile startup companies, Zap, Revolution Motors, Electrorides, Wrightspeed, Phoenix Motors, Electric Motors Corp, Environmental Transport Solutions, and Local Motors.


Carbon Motors

Zap has been perpetually troubled, Revolution hasn’t gotten beyond a prototype for their leanable reverse trike, and Electric Motors is out of business. Four of the companies that seem to be surviving, Electrorides, Wrightspeed, Phoenix and Environmental Transport, are concentrating on electrified commercial vehicles, not passenger cars. It look like investing money, private or public, in startup passenger car companies, is not a very good bet.



Rather than being a profligate waste of taxpayers’ money, the  Advanced Technology Vehicle Manufacturing Program appears to have been managed in a responsible manner. The majority of the companies that received funding are in business and appear to be thriving. The majority of startup car companies, which are high risk enterprises in the first place, that were turned down for loans or that had their applications put on hold in 2011, are either no longer in business or financially troubled.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

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DoE Gets Some Money Out Of Fisker Tue, 23 Apr 2013 14:44:15 +0000

The U.S. government has managed to recover $21 million in cash from Fisker, funds that will go towards repaying the nearly $200 million its received from the government in the form of loans.

Automotive News reports that the funds came from sales and private investment, rather than unused loan money. Reports say that Fisker’s emergency fund was tapped to obtain the cash. Fisker’s first payment for the loan was due on Monday, though the Department of Energy didn’t say whether the funds helped satisfy that requirement.

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VC Firms Expected To Take A Billion Dollar Bath On Fisker Thu, 18 Apr 2013 12:30:13 +0000

PrivCo, a private corporate intelligence firm, has published a 20+ page dossier on Fisker’s seemingly strong ability to fundraise for itself, while failing to do a good job of actually creating cars. With Fisker teetering on the verge of bankruptcy, the results are staggering; with just under 2000 units sold, Fisker burned through an estimated $1.3 billion in venture capital, taxpayer-funded loans and private investor funds.

According to PrivCo’s estimates, that amounts to $660,000 per Karma sold. PrivCo has charted out an extensive, detailed timeline of Fisker’s operations, and highlighted key information pertaining to corporate developments, government loan proceedings and the various ways that Fisker breached their agreements with the government. What materializes is an amazing picture of how Fisker was able to raise enormous sums of money merely on the promise of providing a “green” car for the very wealthy few, without every creating anything tangible or ready for the marketplace. According to the firm, the government

“…applied negligent underwriting standards in granting the DOE Loan and Credit Agreement to Fisker, which was by any commercial standard clearly a financially unqualified borrower for the loan.”

You can view the full report at PrivCo’s website.

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Issa Wants House To Investigate Fisker Loan Thu, 11 Apr 2013 11:00:03 +0000

California Congressman Darrell Issa wants to investigate the Department of Energy’s loans to nearly-bankrupt Fisker after the company laid off most of its employees and retained bankruptcy lawyers last week.

According to Bloomberg, Issa is concerned that Fisker’s loan may have prevented other, more deserving companies from getting the money, stating

“[Fisker] is a design company, not a manufacturing company…It was destined to fail from the beginning. The greater concern is, does this affect more viable companies, whether they received loans or not.”

Bloomberg notes that Aptera, an EV start-up that Issa backed in the past (and was based in his congressional district) was denied a DoE loan under the Advanced TechnologyVehicles Manufacturing Program – the same program that Fisker got its funding from. Fisker’s $529 million loan was meant to convert a former GM factory in Delaware into a Fisker production center. But Fisker never produced a single car there, instead relying on Finland’s Valmet to produce the Fisker Karma sedan under contract.

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Fisker: How To Light $529 Million On Fire Fri, 05 Apr 2013 16:55:28 +0000

Fisker has laid off nearly all of its rank and file employees. Reuters reports that 160 people were out of a job as of today, while 53 senior employees will stay on, apparently to help find a buyer for Fisker’s assets. Fisker is also hoping to re-negotiate a loan payment to the Department of Energy, due on April 22nd.

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Geely No Longer Interested In Fisker Mon, 18 Mar 2013 14:39:09 +0000

Fisker is still likely to be rescued by a Chinese savior, but it won’t be Geely. Reuters is reporting that Fisker’s outstanding obligations to the Department of Energy have scared off the Chinese auto maker, leaving Dongfeng as the sole suitor for the beleagured EV maker.

According to Reuters, the strings attached to the $529 million loan – such as commiting to restoring jobs and production capacity at American plants on a set timetable – were too daunting for Geely.

“Those obligations are too complicated to handle and seem too risky,” one of the sources said. “The plan’s footprint was too big. It would take a long, long time to fill up the plant with products and restore employment there.”

Originally, Geely was said to be eyeing Fisker’s Delaware plant as a means of producing Volvos in the United States. As of now, Dongfeng is said to be the sole bidder in the final round. Meanwhile, Fisker has yet to produce any cars since July of 2012, and is looking for funding to help produce the smaller Atlantic plug-in sedan.

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Tesla To Pay Down DoE Loan In 5 Years Or Less Wed, 27 Feb 2013 17:27:45 +0000

Tesla announced plans to pay down their $465 million dollar Department of Energy loan in 5 years or less, as Tesla seeks to achieve profitability.

Automotive News reported on comments made by Tesla CEO Elon Musk while attending a conference in the Washington, D.C. area

That loan currently must be repaid within 10 years, Musk said. Tesla will “codify” a commitment with DOE to reimburse the government within five years or less, Musk added, after declaring that the loan guarantee should be “viewed as a success.”

In addition to Tesla, Ford, Nissan and Fisker all received loans under the $25-billion dollar program Advanced Vehicle Technology Manufacturing program, which was introduced by President George W. Bush.

Ford and Nissan’s loans are worth $5.9 billion and $1.4 billion respectively, and Energy Secretary Steven Chu said that he expects to be paid back in full by the auto makers, despite other loans that “…may be at risk”. According to Tesla’s 10-Q filing for Q4 2012, the company made its first loan payment of $12.7 million on schedule, with the next payment due in March.

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Workers At LG Chem Plant On Furlough As Green Jobs Wilt Fri, 19 Oct 2012 18:56:03 +0000 Click here to view the embedded video.

Workers at an LG Chem plant in Holland, Michigan have already been put on furlough before a single battery has come off the line. Workers have three weeks of paid “work”, and one week off unpaid at the $300 million plant.

As early as 2010, the Holland plant was touted by President Obama as the return of manufacturing jobs to America, and green ones at that. The facility was estimated have produced 15,000 batteries a year and added hundreds of jobs. So far, 200 workers are being paid to do nothing.

The Department of Energy provided a $151 million Recovery Act grant for the factory, while LG received property tax breaks worth $50 million over 15 years (contingent on reaching 300 workers over 5 years), and $2.5 million in other tax breaks. While the plant’s largest customer was supposed to be the Chevrolet Volt, all of its batteries have come from South Korea so far.

Target 8, A local NBC affiliate interviewed plant employee Nicole Merryman, who said that

“We were given assignments to go outside and clean; if we weren’t cleaning outside, we were cleaning inside. If there was nothing for us to do, we would study in the cafeteria, or we would sit and play cards, sit and read magazines,” said Merryman. “It’s really sad that all these people are sitting there and doing nothing, and it’s basically on taxpayer money.” 

Worers placed on furlough are eligible to collect unemployment for that week, but that’s not the only government subsidy that is used to sustain LG Chem’s work force. Of the 200 employees at the plant, half are being paid via Recovery Act funds. 40 percent of the company’s $133 million expenditures have gone to foreign companies, mostly South Korean, according to Target 8. The station is also reporting other taxpayer-funded expenditures

A Target 8 analysis of federal records shows taxpayers spent $7 million to train workers and have paid more than $700,000 for workers’ health and dental insurance. There’s millions of dollars more at stake for LG Chem if it doesn’t keep hiring, or if its job numbers fall. The state approved a $25.2 million job-creation state tax credit over 15 years, and a battery cell state tax credit worth $100 million over 4 years. Both are tied to job creation. LG Chem has yet to file claims for that money, state officials said.

Workers haven’t produced anything since December, when production of test units of battery cells ended. Sluggish sales of the Volt are one possible culprit, though the plant hasn’t made any components for the Ford Focus EV either, as it was originally planned to do. One possibility is that the Holland plant will produce batteries for the second generation Chevrolet Volt, but even then, there are controversies over the technology being farmed out to LG Chem after it was developed with public funds. The next generation battery is due out in 2015 and is said to be 35 percent cheaper than what’s out there today.

Right now, we are left with a $300 million mystery. The subsidization of unused capacity is puzzling, to say the least, not to mention a horribly inefficient use of stimulus funds. The grants given out by the government are contingent on hiring more workers, but if nothing is being produced, how can LG Chem justify keeping the plant open, even with workers (half of whom are paid via Recovery Act funds) on furlough?

At least there’s one upshot to the whole ordeal. The report by Target 8 has led to an investigation into the LG Chem plant by the  Recovery Accountability and Transparency Board, a government agency responsible for overseeing the stimulus funds.


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Romney Dubs Tesla, Fisker As “Losers”, As Tesla Issues Stock To Stay Afloat Thu, 04 Oct 2012 17:53:33 +0000

Viewers of last night’s Presidential debate may have caught Mitt Romney bad-mouthing Tesla and Fisker during his remarks. Meanwhile, Tesla’s new prospectus shows that they’re hardly out of the woods yet, financially speaking.

Last night, Gov. Romney delivered this barb to President Obama

“You put $90 billion — like 50 years’ worth of breaks — into solar and wind, to Solyndra and Fisker and Tesla and Ener1,” said Romney. “I mean, I had a friend who said, you don’t just pick the winners and losers; you pick the losers.”

The remarks came right as Elon Musk and Tesla prepared another stock issue to raise so much needed cash. Tesla’s latest SEC filing declares that

Based upon our current financial forecast, we currently anticipate that if we do not raise the proceeds anticipated from this offering and do not otherwise adjust our operations accordingly or amend the DOE Loan Facility, we may not be compliant with the current ratio covenant for the quarterly period ending March 31, 2013. For the quarters ending September 30, 2013 and December 31, 2013, we currently anticipate that without taking advantage of additional revenue opportunities or making adjustments to our spending, we expect that we will need to seek an amendment from the DOE to modify the fixed charge coverage ratio covenant. Moreover, we currently anticipate that without raising capital in addition to this offering, we would need to seek an amendment from the DOE to modify the total liabilities to stockholder equity covenant for the quarter ending March 31, 2014 and the two subsequent quarters.

While Tesla will apparently become cash flow positive next month, the mainstream media has glossed over the fact that they are also in grave danger of being out of compliance with their DOE loans for as much as 18 months into the future. Unfortunately, it doesn’t matter how good the Model S is. If it don’t make dollars, it don’t make sense.

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Tesla To Pay Back DOE Loans By Year End Mon, 14 May 2012 12:46:12 +0000

Tesla Motors has almost used up funds from a Department of Energy loan program – but the startup car maker also says that they’ll start paying back the money at the end of 2012.

Regulatory filings made by Tesla show that the company still has nearly $104.5 million in DOE money left over, and claims that deliveries of the Model S will begin in June. Tesla’s CFO told Automotive News that the money is earmarked for the company’s third quarter, with re-payments starting in December.

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Coda Withdraws DOE Loan Request Worth $334 Million Thu, 26 Apr 2012 20:57:58 +0000

Coda Automotive withdrew a Department of Energy loan application after two years of waiting. The $334 million loan was supposed to have gone towards establishing an assembly plant in Columbus, Ohio, but for now, production will continue in China.

The plant would have created as many as 2,000 jobs, but the DOE’s stalling means that production will continue overseas. Coda’s Forrest Beanum told Automotive News that

“It became clear to us after the Solyndra debacle that things in Washington as it pertains to this program were becoming quite politicized…Going into an election year, our objective was not to be unnecessarily scrutinized due to politics,” he said. Rather, its goal was to focus on the U.S. launch of its new EV this year, he added.”

Coda final assembly is carried out in California using “glider” chassis assembled in China. Speculating whether Coda would have really added jobs in the Midwest would just be conjecture at this point (Fisker, anyone). It’s encouraging to see Coda looking to add jobs in America, even if, as Ed points out, the car needs some work to be up to American market standards. Maybe their new tie-up with Great Wall will let them build an EV here without government help too.

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Ford PR: “We are also going to pay back our loans unlike other companies” Wed, 11 Nov 2009 04:50:32 +0000 Bomb thrower? (courtesy

Responding to TTAC commentator Ohsnapback, Ford’s Communications rep defended his employer’s turnaround plan. “At Ford we have never said that we have won the battle already,” Jay Ward wrote. “Just that we are making considerable progress against our plan. You are right that the job is not done, but the evidence so far is overwhealmingly [sic] positive.” So far, so PR. And then . . . “We are managing our debt and working hard to pay it off. We are also going to pay back our loans unlike other companies (not just automotive – how about the banks while we are on the subject).” It’s a blunt and entirely accurate appraisal of GM and Chrysler’s chances of returning the government’s $72 billion (plus) “investment” in the failed domestic automakers. Ward goes on to underline Ford’s official position that its $10 billion no-to-low interest, 25-year “retooling” loan from the Department of Energy does not constitute a government bailout. ” . . . we did shun bail out money. We accepted government loans available to all auto manufacturers both domestic and foreign. We have committed to paying these back and I fail to see how we can be critisised [sic] for that.” And just in case you thought the attack on GM and Chrysler’s mega-suckle was a slip of the tongue, Ward makes a second strafing run. “If everyone else pays back every penny that Uncle Sam has ‘loaned’ them, I will eat my Mustang and my Flex.” Jay’s cars are safe. His ability to post on TTAC without interference from The Glass House Gang? Not so much.

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