The fuse is lit on another green stimulus loan.
You may remember that the Obama administration loaned $529 million a foreign carmaker to produce $96,000 luxury EVs.
It’s looking like the Fisker loan may do for EVs what Solyndra did for solar power.
Fisker hopes to sell 12,000 to 15,000 $96,000 Karmas next year — even though fewer than 3,900 Chevy Volts — priced at “only” $41,000 — have sold through September.
Read the Washington Post‘s “Fisker, electric carmaker backed by $529 million U.S. loan, balks at Solyndra comparison“.
Read Investor’s Business Daily‘s “Green Energy’s Bad Karma“.
Every time I hear that a business needs a loan back by the tax payers in a high risk business area, I know the tax payers are about to get hosed.
For survival in high risk businesses, you need equity, not debt financing. In the real world, especially with anything innovative, shit happens and with debt financing you can’t recover from even the small setbacks. With equity financing, your capital costs payments are zero until you solve your problems.
What crony capitalists are saying when they say they “need” government loans or guarantees in risky businesses is they they want the tax payers to take all the downside risk and they get all the upside benefits. Heads he wins, tales you loose big time.
At $96,000 (with or without tax credits) they are not going to sell a lot of them. The similarly priced Porsche 911 sold 6,000 copies in 2010, and it works.