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This Week in Clean Economy: U.S. Electric Carmakers Get the Solyndra Treatment

Is Fisker a scandal, or much ado about nothing? In solar news, worries mount over an industry darling, and China fires back at America's tariff push.

Oct 28, 2011
Fisker's 2012 Karma Eclipse

The hunt for the next Solyndra heated up this week, as GOP critics of Pres. Obama's clean energy programs turned the spotlight on Fisker Automotive, a California electric carmaker backed by a $529 million federal loan.

Their gripe is that the company assembled its first car, called Karma, in Finland—creating green jobs there and not here. Rep. Tim Murphy (R-Pa.), who is on the House committee investigating Solyndra, told the media, "American taxpayer dollars went to a Finnish automaker to build high-end luxury automobiles for Hollywood."

The congressman confirmed this week he has called for an investigation.

The Department of Energy insists there's no foul play. In its 2009 announcement of the loan, DOE made clear that "final assembly of the Karma will be done overseas." Last week it said, "While the vehicles themselves are being assembled in Fisker's existing overseas facility, the Department's funding was only used for the U.S. operations."

The scrutiny followed an Oct. 20 report from ABC News and the Center for Public Integrity's iWatch News. Media Matters for America, a nonprofit research center, wrote on Tuesday that the story, which was touted as an exclusive, "rehashes a flawed narrative pushed by Fox News more than two years ago."

Fox ran a series of segments in 2009 that similarly characterized Fisker as "a car company that is creating jobs in Finland," the group said.

Fisker conceded in a Oct. 21 news release that 500 manufacturing jobs went to a rural Finnish firm in a privately funded deal. It said it first tried, to no avail, to find a U.S. automaker to partner in production of its Karma sedan. (In 2009, Fisker similarly responded to Fox News reports saying it "searched for a U.S. plant to assemble the Karma, but none were willing or able to build the 15,000 of these advanced vehicles per year Fisker required.")

The E.V. maker says it employs 650 people at its California headquarters and more than 100 engineers and other workers at its Delaware plant. It expects to create some 2,000 jobs at the East Coast facility over the next couple of years. 

The jobs issue aside, the ABC/iWatch article quotes experts alleging that Fisker is a Solyndra waiting to happen. They say Fisker's $97,000 hybrid electric Karma has fallen more than a year behind its production schedule—as have plans for its next model, a more affordable family car to be made in Delaware.

The report pointed out similar concerns with Tesla Motors, another California E.V. maker backed by a $465 million DOE loan. According to its SEC filings, Tesla has shed money every quarter and expects to lose more in the future.

Both companies vehemently denied they're sinking.

The controversy spilled into presidential politics this week. GOP hopeful Mitt Romney wrote in an op-ed that investors of Fisker and Tesla are Obama campaign contributors and called for an investigation into alleged "cronyism."

"Congress should investigate carefully how so much taxpayer money was spent so poorly on behalf of so many donors," he wrote. (Romney is now facing criticism for his association with a Solyndra-linked lobbyist, reported the Hill.)

The Fisker/Tesla campaign follows recent attacks against SunPower, published by Fox News, claiming the California solar firm backed by a $1.2 billion is failing. Market analysts, by contrast, said SunPower is going strong.

According to news reports, Congressional hearings are expected to target all three companies in the coming weeks.

First Solar CEO Gets Axed as Sales, Profit Outlooks Slashed for 2011

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