The U.S. government is today under pressure as Fisker Automotive moves closer to potential bankruptcy after laying off 75% of staff last week. The company received a $193 million U.S. taxpayer funded loan just two years ago, with President Obama placing the company in his elite band of electric car companies of the future. However there are questions being asked about the prudence of lending such an enormous amount of money to a relatively new company and indeed whether due diligence was carried out to an acceptable level.
Was the timing of the multimillion dollar loan misguided?
There is growing concern that the multimillion dollar loans given out to an array of electric car companies in the U.S., with the idea of having 1 million electric vehicles on the road by 2015, were perhaps missed time. There is some suspicion that the loans were made because funding was available at the time, rather than funds made available after due diligence. That is not to say that the U.S. government did not carry out any due diligence, but were these loans in any way politically motivated?
The fact is that the U.S. government could potentially take control of all Fisker Automotive assets in the short to medium term as a way of at least attempting to claw back some of the taxpayer funds invested in the company. This would put the government in a very tricky situation, and probably lead to a fairly quick trade sale, because there would definitely be a conflict of interest.
Has this setback the US electric car market?
In all honesty, Fisker Automotive is not the financial basket case that some people are suggesting and indeed in many ways the company was a victim of circumstance. In recent times the company was unable to supply batteries required to power its electric cars and indeed a number of earlier vehicles were destroyed during Hurricane Sandy. Ongoing attempts to find an investor to effectively bailout the company appear to have fallen on deaf ears and while the bankruptcy hammer has not yet fallen, many suspect it is not too far away.
Quote from ElectricForum.com : "According to numerous reports, the entire Fisker PR team, along with a number of other various employees have all been laid off, effective 8AM PST."
It will be interesting to see what the U.S. government does if the company's financial troubles continue and indeed how it will attempt to instil at least some confidence into the electric car market.
The U.S. government had initially hoped to have 1 million electric and plug-in vehicles on the road by 2015. The figure at the moment is in excess of 87,000 vehicles which is well short of the earlier target and we will likely see a repositioning of this goal in the short to medium term. The reality is that the economy, austerity measures around the world, and indeed the investment markets are not necessarily conducive to the introduction of a groundbreaking technology such as electric vehicles.
There is a growing feeling that the electric car ball continues to roll and is now unstoppable but the pace at which it will roll in the future may slow. Issues such as the financial woes of Fisker Automotive do not help the situation but in reality this was never going to be a mass-market electric vehicle manufacturer and therefore the damage in the longer term is unlikely to be great.