I have no problem with Fisker, Solyndra, and A123 trying to make a go of it. There's nothing wrong with trying an idea that ultimately turns out to be before its time. It just shouldn't be done with taxpayer money.
There's absolutely no evidence that funding these failures will get us to oil alternatives any faster. And I have to wonder if Fisker was "encouraged" by its government overlords to choose A123 batteries -- ultimately a bad choice -- because they also had a big taxpayer subsidy that needed to be justified.
(Photo credit: Fisker Automotive)
Fisker Automotive is gearing up for - another round of battery replacements. The plug-in hybrid maker says that it will swap out drive batteries for 2012 Karmas free of charge after customers experienced unsatisfactory performance.
The defect was confirmed by battery maker A123 Systems. Sadly, it’s deja vu far too soon for Fisker, which preemptively recalled faulty A123 systems batteries late last year for posing a fire hazard. Its acknowledgment of this latest defect comes after Consumer Reports acquired a US$108,000 test car that died (very publicly) before even making it through its initial round of testing.
It would be too easy –and unfair– disparage Fisker’s products. The 2011 Karma was rated luxury car of the year by BBC Top Gear magazine. Consumer Reports was pleased with its service, and its initial review was somewhat positive. See here:
The Karma’s sleek lines and dazzling design concept aside, its misfortunate can’t be understated. The automaker has confronted a parade of horribles during the Karma’s rollout, and with frequent trips to the dealer, its yet to live up to Fisker’s promise of delivering “pure driving passion.”
The Karma was originally slated to ship in 2009 - the same year when Fisker received a loan guarantee from the U.S. Department of Energy for $529 million. A123 received a $249.1 million grant to build its battery concept. Both companies have encountered significant roadblocks on their trail toward profitability.
A battery failure might spook shareholders and be good fodder for jokes about electric cars, but energy has become a big deal this election cycle. A friend e-mailed me wondering whether A123 Systems could become the next Solyndra.
“The problem is only a few hundred chevy volts are sold every month - they have to sell millions just to break even which wont happen. [A123 Systems] will be bankrupt in 6 months - they are burning through money and with the stock at $1 they wont be able to raise more money. The $300m Obama gave to [A123 Systems] is probably lost for good…. There are plenty of videos on Youtube of Obama and Pelosi in front of [A123 Systems] plants announcing tons of money. This story will be huge soon. Stock has 33% short ratio. Everyones betting on a bankruptcy.”
Yikes.
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