The U.S Energy Department loan program has provided a boost in innovation to promote the development of cleaner cars. Its loan program is sizable at $25 billion and looks to make a significant impact in the next generation automotive industry. A program of its kind can only succeed if the businesses it invests in can make an impact and shows progress and results. It hasn't gone off to a perfect start however. Let us look at the companies it has invested in and how they have done:
Source: DoE website and company websites
Fisker Automotive (plug-in hybrid sports cars). Considered the "Solyndra" of the green automotive movement, Fisker is arguably the most infamous of the bunch. Fisker was awarded $529 million in 2009 but received only $193 million before the DOE cut them off because of missed milestones. Fisker also raised over $1 billion from more than 100 venture investors over the past five years, according to company documents filed with the SEC. In August, 2011, Fisker was seeking to raise around $200 million which put the company at a valuation at about $2.2 billion. Earlier valuations for the year came in at $1.5 Billion. In early 2012, Fisker was denied access to more than half of a $529-million government loan due to failing to meet production milestones. In August 2012, Fisker was seeking an additional $150 million. The most recent buyout offers put the company valuation at just over $410 million. Its supplier for lithium-ion batteries, A123 Systems filed for bankruptcy late in 2012. However, recently Fisker has laid off most of its employees and it has missed its first loan payment to the government. On top of that, Fisker has had repeated production issues and hasn't built a car in months. Bankruptcy seems to be the next logical step.
Vehicle Production Group (wheelchair-accessible vans) VPG received $50 million. Vehicle Production Group, which planned to build thousands of wheelchair-accessible vans powered by natural gas, has called it quits. According to Bloomberg, the company ran out of money and couldn't pay its 100 employees anymore.
Bright Automotive (electric delivery vans). Bright Automotive is an Indiana electric vehicle company that had planned to build energy-efficient fleet trucks. It repeatedly blamed the Obama administration for stringing the company along for three years and false promises to deliver a federal loan. It closed down in early 2012 after it was unable to secure a $314 million federal loan.
Carbon Motors (clean diesel-powered police vehicles) Based in Connersville, Indiana, Carbon Motors was formed to develop and produce police vehicles. It asked for $310 million in financing from the Energy Department's Advanced Vehicle Technology Program. However, after months of supposedly encouraging meetings, the company was suddenly told that its application had been declined. By April 2013, due to the failure of the DOE to provide the needed start-up funding and even though it had backlog orders from over 600 police departments, the company closed shop.
Aptera Motors (three-wheeled electric cars). Aptera Motors first showed off its three-wheeler electric car in 2007 and had plans to develop a more conventional sedan. It placed its future on a bet to receive federal funding. Aptera had a conditional letter to receive $150 million under the Advanced Technology Vehicle Manufacturing loan program. However, they ran out of funding before the loan was granted and closed their doors in 2011,
Coda Automotive (all electric sedans) Coda emerged three years ago with Fisker Automotive and Tesla. It raised $300 million in capital from some high profile financers including Aeris Capital, the Limited Brands CEO Les Wexner, and former Treasury Secretary Henry Paulson. After only selling 100 of its all-electric sedans, Coda Holdings filed for bankruptcy protection in May 2013. It fetched just $15 million in bankruptcy.
Wheego Electric (electric low-speed vehicles) Wheego Electric of Atlanta, an EV start-up founded in 2006. It started out making glorified golf carts and now sells a handful of bubble-shaped electric two-seaters. The company is talking about plans to introduce a $44,000 electric SUV next.
Tesla Motors (electric cars) Tesla (NASDAQ:TSLA) maker of the plug-in Tesla roadster and the new Model S sedan and run by Elon Musk. We have covered Tesla extensively and even had an interview with the Wall Street Journal about Telsa's future. After 10 years of continuing losses and cash burn, in Q1 2013 it posted a profit. Tesla first introduced the Roadster and its new Model S sedan has been impressive, garnering top reviews and accolades.
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