The Department of Energy says it plans on handing out billions in loans to financially viable companies developing fuel efficient cars in the next month.
But are there any companies that fit that description?
The Washington Post points out that neither Chrysler nor General Motors have hit the benchmarks needed to procure the loans. Those companies have been explicitly singled out by the Obama administration as financially untenable.
It’s not just those stodgy old companies that have problems. Their upstart rivals don’t look particularly brilliant either.
Fisker Automotive has raised over $150 million from venture capitalists, but it has yet to produce a single one of its Karma plug-in hybrids. How can the DOE determine if the company will be financially viable if it’s not even in business yet?
Fisker’s rival Tesla has produced many cars, a truly impressive feat, but it’s not in much better shape. Tesla has delivered 320 Roadsters thus far, but it is not profitable. It wants to make its sedan, the Model S, a car for mass adoption, but there are questions about how profitable those will be too. So, does the government give Tesla money when the company is struggling to raise private cash, too?
To get loans from the DOE, each of these companies undergoes a thorough investigation into its business plan. Obviously, the DOE will be well informed about who gets money and how much, but from the sidelines where we sit, it’s hard to figure out who fits the simple criteria of financially viable.
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