Fisker automotive may be kaput. But my friend Dave insisted that before I joined the parade of writers comparing the failed electric-car company to Solyndra, the other California-based manufacturer that went bust after landing a federal clean-energy loan, I had to borrow his curvaceous Fisker Karma. It’s been described as the most beautiful sedan ever built, and I must say that Dave’s sparkling ocean-blue model—there’s crushed glass coated with sterling silver in the paint—looks particularly cool. As I cruised through Miami’s South Beach, tourists kept giving me thumbs-up and taking pictures with their phones, which rarely happens when I drive my Honda Odyssey. I aired out the Karma on the highway too. It’s a pretty sweet ride.
So now I’m more qualified to conclude that yes, Fisker has a lot in common with Solyndra. And that’s nothing for the government to be embarrassed about.
President Bush signed the loan program into law in 2005. He let it languish, but President Obama expanded it and started handing out cash to solar manufacturers, wind developers, fuel-efficient-car makers and other clean-tech businesses in 2009. The goal was to commercialize cutting-edge green technologies that could reduce the U.S.’s foreign-oil addiction and carbon emissions while creating jobs in tomorrow’s industries. Everyone knew some loans would go bad. The hope was that some loans would change the world.
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Fisker probably won’t, but that doesn’t mean it was a dumb bet all along. An exhaustive Republican investigation found no wrongdoing connected to the Solyndra loan, and there’s no reason to think the Fisker loan was shady either. Like Solyndra, it was once considered a game-changing example of American innovation. Like Solyndra, Fisker raised a billion dollars from private investors. But like Solyndra, Fisker couldn’t cut it in the marketplace. The $100,000 Karma broke down on the Consumer Reports test track. Its display panel is a mess; I couldn’t get the radio to work. Fisker had awful production problems and ultimately sold only about 2,000 Karmas before suspending operations. Its second model, which was supposed to revive a shuttered GM factory in Delaware, was never built. The Energy Department cut Fisker off after it drew down just $192 million of a half-billion-dollar loan.
So it goes. companies that receive tax breaks and subsidies fail all the time. Ordinary Americans who get tax deductions and subsidies fail too. Success is not guaranteed in a capitalist economy. The loan program provided a jump start, not a free ride. But Solyndra’s failure has overshadowed a spectacular boom in the solar industry, which has grown more than tenfold since Obama took office. Fisker’s failure could overshadow similarly impressive growth in plug-in electrics; there were almost none on U.S. roads before 2008, and now there are more than 100,000. During a presidential debate, Mitt Romney memorably lumped in Tesla Motors with Fisker as an Obama-supported “loser,” but Tesla just had its first profitable quarter and is on track to pay back its federal loan five years early. Its Model S has won the big Car of the Year awards and received the highest Consumer Reports score of any car since 2007. Its reviewers have sounded like teenage boys reviewing porn. So who’s the loser?
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The larger point is that overall, as an independent review by Republican Senator John McCain’s finance chairman confirmed, the Energy Department’s $40 billion loan portfolio is performing well. It’s also transforming the energy landscape with America’s largest wind farm, a half-dozen of the world’s largest solar plants, cellulosic-biofuel refineries and much more. Obama didn’t support one company or one technology; he supported all kinds of plausible alternatives to fossil fuels. He didn’t pick winners and losers; he picked the game of cleaner energy. And we’re winning. The U.S. has doubled its production of renewable power. Our carbon emissions are at their lowest levels since the early 1990s. And after decades when the U.S. invented products like solar panels and lithium-ion batteries only to see them manufactured and deployed abroad, we’re finally making green stuff at home. For example, not only are we generating twice as much wind power, we’re making twice as many of the components for U.S. wind turbines.
Unfortunately, Dave’s ocean-blue midlife-crisis car probably won’t be one of those things we’ll make. The Karma will become a collector’s item, a 21st century DeLorean, a reminder that even sexy products can stumble in the marketplace. But that’s not a scandal. That’s just a bump on the road to a green future.