published Friday, March 16th, 2012

Pricey new federally subsidized sports car breaks down on test drive

It was alarming when the federal government provided a $529 million loan to help a California car company build expensive plug-in hybrid electric cars -- in Finland!

But now that the start-up company, Fisker Automotive, is turning out its pricey sports cars, the painful results are more evidence that Washington needs to get out of the car business as fast as possible.

Consumer Reports magazine took the $108,000 car, ironically called the Karma, for a test drive. Here is what happened:

"While doing speedometer calibration runs on our test track ... the dashboard flashed a message and sounded a 'bing' showing a major fault. Our technician got the car off the track and put it into Park to go through the owner's manual to interpret the warning. At that point, the transmission went into Neutral and wouldn't engage any gear through its electronic shifter except Park and Neutral.

"We let the car sit for about an hour and restarted it. We could now engage Drive and the same error message disappeared. After moving it only a few feet the error message reappeared and when we tried to engage Reverse the transmission went straight to Park and again no motion gear could be engaged. After calling the dealer, which is about 100 miles away, they promptly sent a flatbed tow truck to haul away the disabled Fisker."

So the brand-new, U.S. government-subsidized Karma broke down on its test drive.

"We buy about 80 cars a year and this is the first time in memory that we have had a car that is undriveable before it has finished our check-in process," the seemingly astonished author of the article in Consumer Reports wrote, adding that the magazine had spotted other problems with another Karma.

"[S]o far, Fisker ownership is proving to be a bumpy ride," the article added.

And even people who have no intention of buying a Karma are being taken for a "ride," because tax dollars helped Fisker design the car.

Vice President Joe Biden initially praised the half-billion-dollar loan to Fisker as a path to thousands of manufacturing jobs in America. Instead, Fisker has created a few hundred jobs in Finland. And instead of reviving a shuttered General Motors plant in Delaware as promised, Fisker recently laid off most of the skeleton crew it had working at that plant, as well as 40-45 engineers in California.

All this comes on top of the unpopularity of the government-subsidized Chevrolet Volt and other electric vehicles. GM actually suspended production of the Volt recently because the car just wasn't moving at dealerships despite huge federal tax credits for its purchase.

It should be apparent to the Obama administration and Congress by now that top-down, government-directed economies do not produce jobs and real innovation, much less products that satisfy consumers and meet their needs. What the government subsidies, bailouts, tax credits and other market-distorting interventions are creating is a bigger national debt.

Washington has no expertise in building automobiles, and it is past time for it to get out of the car business.

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nucanuck said...

The Chinese will supply the world with electric transportation in a few short years if we don't find a way to compete. If our century of leadership is over, we can now look forward to the lower paying jobs of a second tier nation by following the advice of this editorial.

Over the last century huge government outlays in space and technology have spawned thousands of now ubiquitous American products all because of US government investment in risky unproven technologies.

The Taliban arn't our big enemies, it's idiotic thinking like the editorial above that is the enemy within.

March 16, 2012 at 1:37 a.m.
conservative said...

The Chevy Cruise gets 42mpg and cost around $20,000, the VW Passat gets the same at $26,000. One could buy 5 of the Chevy and 4 of the VW for the price of this boondoggle, with no wasted tax dollars!

It is going to take an election to stop these Solyndras.

March 16, 2012 at 7:05 a.m.
conservative said...

The sheep ( sheep are easily led ) seem to think that without government involvement the technologies of wind, solar, electric cars, and low wattage bulbs would not have come into existence. However, these have been around for decades, brought into existence without government involvement and are still expensive.

The "greens" want to waste taxpayer dollar by subsidizing them so they APPEAR to be viable alternatives to CHEAP oil and coal. CHEAP coal and cheap oil is the "greens" enemy so they want to artificially make them competitive with their "green" dreams by curtailing drilling and coal production.

We just need an alternative President!

March 16, 2012 at 8:30 a.m.
eastridge8 said...

With the government spending OUR tax dollars on this (or any) project of this kind shows just how much Washington is ignoring and ignorant of our economic situation. Another valid reason we need another man in the White House! He can't blame this mismanagement/stupidity on Bush!

March 16, 2012 at 11:44 a.m.
Plato said...

As any banker will tell you, every small business loan doesn't turn into a small business success story. A percent of businesses will fail. That's just par for the course. The Right loves to point to failed companies that received government backed loans but never mention the many success stores which greatly outnumber the failures.

Another California company Tesla Motors, started from scratch, also manufactures a futuristic electric sports car which is becoming a success and has branched out into more practical EVs. Without loan guarantees from the DOE in it's startup phase, it would never happened and cars like this would be manufacture in China instead of the good ole USA:

BTW Tesla is hiring :)

March 16, 2012 at 12:47 p.m.
rick1 said...

Plato, let's see how many people continue to buy this model of the Telsa when they find out the cost of having the vehicle repaired if the battery is every totally discharged. Yeah this sounds like a practical vehicle.

March 16, 2012 at 6:35 p.m.
nucanuck said...

Is America satisfied to have the technologies of the future come from the rest of the world? Yes or no?

Many Americans treat green technologies like a plague, as though they weren't inevitable. At some point in the near future, the price of oil will rise past the falling price of green energy and at that point, those who have persevered through the developement of those green energies will be in the sweet spot to dominate an enourmous industry.

Governments have pooled tax dollars for heavy-cost front end developement for hundreds of years and that's because the risk is often to great to be bourn by the private sector. Government has a place in our world in spite of what some now seem to think.

March 16, 2012 at 7:02 p.m.
Plato said...

Rick - there's a solution to the Tesla battery discharge problem which occurs after several weeks of sitting - plug the thing in like the owners manual tells you too. It's kind of like checking the oil level in your internal combustion engine. Bad and expensive things happen if you don't.

Should we now produce a list of all the safety recalls that have occurred over the years to cars powered by internal combustion engines? I'm afraid NFP won't allow us the space.

Bottom line is Tesla is a new design with new technology. Like any new technology it will have bugs, the bugs will be fixed, the technology will evolve and we will move along in time - or not depending on who wins the "argument"

March 16, 2012 at 7:19 p.m.
rick1 said...

Plato, let them do it with their own investors money and not the governments. Let the free market decide if people want to buy this car not the govt.

March 16, 2012 at 8:43 p.m.
Plato said...

rick - are you saying you want to stop all government backed loans like SBA loans for small businesses or DOE guaranteed loans for energy and transportation start ups? The DOE guaranteed loan to Tesla is being repaid on schedule.

People sometimes ask me why, as a small business owner I'm a Democrat, your expressed opinion which is typical from the Right is a good example of why.

March 16, 2012 at 9:31 p.m.
rick1 said...

Plato, solar, wind and electric cars are not new technologies. Since electric cars were being sold in the late 1800s, my answer is no, we should not be giving money to green energy.

March 16, 2012 at 10:55 p.m.
rolando said...

If this wasn't such a sad reflection on America today and our "diversity" kick, this situation -- and way too many just like it -- would be hilarious...something I once saw on an old Laurel and Hardy movie [or should have].

It is as bad a giving $17Million in stimulus money to a college that just happened to be planning to fire a poorly-performing basketball coach...somehow the money made a difference and his job was saved. [Parenthetically, the coach is the First Lady's brother -- our President's bro-in-law. Ever wonder why Barak The Usurper was holding all those unspent stimulus dollars? Now you know.] Oh yes, the money was personeally delivered by an Ed Dept personage...

And the weepy laughs just keep rolling in.

March 18, 2012 at 8:35 p.m.
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