Fisker's Federal Fiasco: Loans, 20-MPG Electric Cars, Shoddy Reporting

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2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

Today, if the news cycle cooperates, ABC News will air a segment on its Nightline program that looks at Fisker Automotive--makers of the 2012 Karma plug-in luxury sport sedan--and the low-interest loans it and Tesla Motors have been granted by the U.S. Department of Energy.

Full investigations into government support of any private company--from Fisker to, say, natural-resource extraction firms--are always healthy. And we look forward to today's segment.

But there's been some remarkably sloppy reporting across the media spectrum, so we feel the need to point out a few facts.

Bumped by Iraq

The first stories appeared last Thursday on the websites of ABC News and the Center for Public Integrity's iWatch, the joint partners in the investigation.

The ABC story includes a brief 3-minute video clip from Good Morning America previewing the story. The full ABC segment was to have aired Friday, but was bumped by the news of U.S. troop withdrawals from Iraq.

Lots of stories, little new info

Nonetheless, a flurry of coverage reprised the stories, often adding the political slant of the outlet. Electric-car advocates questioned the motives that led to the story; outlets suspicious of government industrial policy slammed the loans (and occasionally the entire electric-car industry) as doomed to failure.

There have been a couple of hundred articles over the last week or so, notes electric-car advocate Chelsea Sexton, "but very few of them contain actual new info." In her opinion, most of the coverage has been either "partisan attacks or repackaging of the ABC article."

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

Relatively few, however, have focused on the 2012 Fisker Karma's fuel economy. In range-sustaining mode, the Karma's 2.0-liter gasoline engine propels the car by generating electric power to run a pair of electric motors that turn the wheels. But it does so at just 20 mpg, according to EPA ratings.

The S-word: Solyndra

In most of the coverage, comparisons of Fisker (and sometimes Tesla as well) to the bankrupt solar-panel maker Solyndra are rife.

The right-wing site BigGovernment.com, for example, touted a "shocking new dimension" to the "emerging Fisker Karma scandal" by saying, "Insiders tell Big Government that the Fisker Karma scandal is a 'green car Solyndra.'”

That company received roughly half a billion dollars in loans from the DoE, though many solar-industry analysts say it failed largely because Chinese solar-panel makers have cut prices deeply enough to bankrupt virtually any U.S. producer.

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

(The day before ABC's Fisker story, a coalition of U.S. solar panel makers filed a trade case against the Chinese industry in Washington, accusing it of using billions of dollars of government subsidies to gain U.S. market share in contravention of international trade law.)

Electric-car advocates worry that misunderstanding of the Fisker terms could imperil the DoE low-interest loan program, which still has roughly $10 billion in loan capacity uncommitted to advanced-tech vehicles--with many applications yet to be decided on.

Project Nina delay

Fisker fought back, with cofounder Henrik Fisker saying the next day--not surprisingly--that Fisker and Solyndra are "completely different; you can't compare at all" in a Washington Post article.

The company didn't do itself any favors, though, by saying yesterday that full production of its mid-size Project Nina plug-in sedan won't begin until mid-2013, though it continues to insist that some production will take place before the end of next year.

Revised terms not public

And that Washington Post article raised a disturbing note on the topic of government transparency. The Energy Department confirmed to the paper that it had "eased expectations after conditionally approving the loan to Fisker, and has made allowances for scaling back projections in the final loan agreement"

But, according to the article, the DoE "declined to make public those adjusted terms, including projected car sales volume or milestones [Fisker] must meet."

2012 Fisker Karma

2012 Fisker Karma

Enlarge Photo

Nonetheless, much of the journalism around Fisker's DoE loans has been somewhere between superficial and shoddy. So it's time to point out a few facts to keep in mind as you view tonight's ABC segment.

The basics ...

(1) The Fisker Karma and Project Nina are two different cars

Because plug-in cars apparently remain exotic and confusing to much of the media, it's important to differentiate between the 2012 Fisker Karma (now in production) and "Project Nina," the code name for Fisker's second car line.

Of the $529 million in low-interest DoE loans granted to Fisker in June 2009, $169 million was allocated for engineering integration work on the Karma.


 
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