“Another green subsidy favorite goes belly up.”
The Wall Street Journal editorializes,
President Obama keeps pushing the (Warren) Buffett rule that nobody making more than $1 million a year should pay less than 30% in taxes. He’d do better by the economy if he adopted a Solyndra Rule, in which no company touting unproven and expensive technology should receive millions in taxpayer subsidies.
After the demise of Solyndra (with its $535 million loan guarantee) and Beacon Power ($43 million loan guarantee), last week saw the bankruptcy of Indiana-based lithium-ion battery maker Ener1. In 2009 an Ener1 subsidiary was awarded a grant worth up to $118 billion from the Energy Department, with Vice President Joe Biden touring and touting its factory a year ago.
Like Solyndra, Ener1 was a foolhardy bet for taxpayer cash. Founded in 2002, Ener1 had not turned a profit by the time of its grant and has proceeded to hemorrhage the $55 million of the DOE money it has received to date. Its losses in fiscal 2010 were $165 million.
The company has had to compete in a market with a glut of battery makers, all of which are selling into a lackluster electric-car market. This battery glut was created in substantial part by the Obama Administration, which handed out money to no fewer than 48 different battery technology and electric vehicle projects in 2009.
In the small favors department, defenders of the White House’s green corporate welfare are noting that, unlike Solyndra, Ener1 is not closing its doors while in bankruptcy. Then again, Ener1 has created fewer than 400 of the 1,700 jobs it had promised by this year, and a successful restructuring is by no means assured.
Mr. Obama is undeterred. In last week’s speech, he defended his taxpayer “investments” in private commercial companies, noting that “some technologies don’t pan out, some companies fail.” He would know. Though perhaps if Mr. Obama weren’t throwing hundreds of millions down the green sinkhole, he wouldn’t have to target the nation’s real job creators for higher taxes to foot his losses.