Everyone wants government money. It seems that all of the electric vehicle manufacturers, whether making parts, batteries, or cars want in on that cheap Department of Energy cash. Matthew Lesko is already working on a new book with a working title of “Get FREE Government Money For Your Electric Car Company!”*
Tesla Motors recently scored a $465 million low interest loan from the DoE and immediate speculation about why it was given, how it would end up overseas, and why Elon Musk is such a jerk for taking it. With Tesla recently (as of July) hitting the black and with another injection of cash from private investors like Fjord Capital and Daimler, many are wondering why they get so much dough from the government.
Meanwhile, other startups with more affordable and innovative products, like Aptera with the Aptera 2e 3-wheeler, are denied loans because their vehicles don’t count as “cars,” but as motorcycles instead. The Department of Transportation lists any powered vehicle with less than 4 wheels and weighing less than a couple of thousand pounds as being a motorcycle. So the Aptera doesn’t qualify as a “car” for the DoE loan program.
Same with XP Vehicles, whose inflatable car design and innovative battery electric hydrogen fuel cell with swappable cartridges is unique, to say the least. They were refused earlier this year because their car is just too strange for the DoE.
What I haven’t figured out is why the Department of Energy is handing out money in the first place. With deficits as high as they are and with the questionable track record of bureaucrats when choosing those to hand fist fulls of cash to, is it really necessary that the DoE be involved? Tesla sure hasn’t had any trouble getting cash out of private interests.
Of course, bailout mavens like General Motors are all for the DoE plan to snub the little guys. Calling vehicles like the Aptera “novelty vehicles,” GM spokesman Greg Martin said while attempting to justify their own “loan” for another $10 billion from the DoE program. That would be for the Chevy Volt and its power train. That model of innovative marketing new technology.
A new spending bill that has now been passed through the House of Representatives would address this issue by expanding eligibility to any fully-enclosed vehicle capable of 75mpg or better (or equivalent). The bill also requires already-rejected applications be reconsidered. We’ll see how far it gets in the Senate.
My earlier question still stands, however: why is it government’s job to dole out this money? So far, the federal government hasn’t had a very good showing in their attempts at throwing money at the automotive industry’s problems. We’ve been informed that it’s not likely the bailout money will ever really get paid back and we’ve seen how, while GM can at least make up stuff about “green” cars, Chrysler can’t do anything better than stop printing owner’s manuals on paper.
One estimate shows that the bailout of Chrysler alone will cost $870,000 per job “saved.” In other words, for the estimated 38,500 jobs saved thanks to the bailouts given to them, it will cost us $870k per job. Were I a UAW worker, I’d just take the cash and forget the job. Wouldn’t you?
Were the government a private investment firm, its shareholders would be very unhappy at this kind of drunken sailor spending. Meanwhile, as GM and Chrysler find new ways to spend the federal government’s money, foreign competition horns in on the U.S.
Both Honda and Toyota are increasing their market shares here while other foreign makers prepare to launch sales of their hybrids and electrics in North America in the next couple of years. Smaller companies like Aptera, Fisker, and even Tesla are also moving ahead with their plans for mainstream vehicles on the market, with or without DoE donations.
All while the big government money goes to the still-questionable Volt (which even GM says won’t make any money) and the total lack of innovation at Chrysler.
Ya, that’s where I want my tax dollars invested.
*To my knowledge, no such book is actually being written. That doesn’t mean it isn’t, just that I made this part up. For all I know, Lesko’s new book will be titled “The FREE Government $$ is Almost Gone!” He always capitalizes “free.”
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