Apparently electric vehicle maker -- and recipient of lots of your and my money -- Fisker Automotive is struggling. Who would have thought that a company that could not fully fund itself privately and had to rely on political connections to use the coercive power of government to take money from taxpayers might be a bad investment?
As a reminder, Fisker's taxpayer largesse likely came at the behest of politically powerful Ray Lane of Kleiner Perkins. It is his firm's investment returns we taxpayers are supporting. So it should come as no surprise that Ray Lane says, in the video below, that he thinks Obama is the greatest public sector venture capitalist ever. What does he use as justification for this conclusion? Why, Solyndra! I kid you not, check it out.
Output of cellulosic ethanol will surge starting in 2013, according to the U.S.' largest corn-based biofuel production firm, Poet LLC.
Poet says 2013 marks the start of commercial-scale cellulosic ethanol production in the U.S. and predicts its lone facility will "open the floodgates" for the advanced biofuel....
As Poet exec Greg Hartgraves points out, production of cellulosic ethanol is expensive and that means those floodgates need to be helped open with federal monies. Without an energy policy mandating its production, U.S. firms are likely to shy away from the cellulosic biofuel, he said.
Duh. It's a substitute that is both less effective (lower btu per gallon) and more expensive that what it is supposedly substituting. I am just floored at the number of investors who are putting money up on the come with an expectation that somewhere down the road they can convince the government to subsidize them. Poet knows this plant is uneconomic but has built it anyway, probably hoping to extract promises of support from candidates in the Iowa caucuses. Kleiner Perkins did the same think with Fisker Automotive, making early stage investments that could only be bailed out by future political largess. As Ayn Rand would say,the aristocrats of pull.
It was the quickest and shortest column I have ever written on Forbes, so of course it has turned out to be the most read. It has been sitting on top of the Forbes popularity list since about an hour after I wrote it, and currently has 82,000 reads (I am not a Twitter guy but 26,000 tweets seems good).
I wanted to add this clarification to the article:
Most other publications have focused on the 20 mpg the EPA gives the Karma on its backup gasoline engine (example), but my focus is on just how bad the car is even in all electric mode. The calculation in the above article only applies to the car running on electric, and the reduction in MPGe I discuss is from applying the more comprehensive DOE methodology for getting an MPG equivilent, not from some sort of averaging with gasoline mode. Again, see this article if you don’t understand the issue with the EPA methodology.
Press responses from Fisker Automotive highlight the problem here: electric vehicle makers want to pretend that the electricity to charge the car comes from magic sparkle ponies sprinkling pixie dust rather than burning fossil fuels. Take this quote, for example:
a Karma driver with a 40-mile commute who starts each day with a full battery charge will only need to visit the gas station about every 1,000 miles and would use just 9 gallons of gasoline per month.
This is true as far as it goes, but glosses over the fact that someone is still pouring fossil fuels into a tank somewhere to make that electricity. This seems more a car to hide the fact that fossil fuels are being burned than one designed to actually reduce fossil fuel use. Given the marketing pitch here that relies on the unseen vs. the seen, maybe we should rename it the Fisker Bastiat.
Ray Lane of Kleiner Perkins has helped score hundreds of millions of dollars of taxpayer money from the Obama administration to help subsidize Kleiner investments. More corporate welfare for billionaires.
It is a nice touch, therefore, that the first tangible result of these sizable public subsidies will be... a new family car for Ray Lane (the car is from Fisker Automotive, a Kleiner investment and recipient of $529 million in taxpayer subsidies. It appears to be a cool car, but an iPhone is a cool piece of tech too but you don't see me advocating taxpayer money for Apple.
In an extraordinary speech, Lane laid out how market socialism can guarantee profits for politically connected VC firms like Kleiner -- far more preferable to the old model of "throwing a dart at a dart board," as Lane has put it. While Silicon Valley-based Kleiner made its reputation as a financier of tech startups like Netscape, Lane confided that they are inherently risky ventures in uncertain, fast-moving markets.
By contrast, Lane expressed admiration for communist governments like China and market-socialist economies like France where government determines new markets, thus providing a more certain investment climate for rent-seekers. With Kleiner partner Al Gore lobbying for federal mandates from wind to electric cars, Kleiner would be assured of a return on otherwise risky investments like Fisker Automotive, a California electric car company.