DOE Should Be Less Selective When Funding Green-Car Companies, Siry Suggests
Darryl Siry, the chief marketing officer of Tesla Motors from December 2006-2008, has an uncommon opinion regarding the U.S. Department of Energy loans Ford, Nissan, Tesla and Fisker Automotive have received under the Advanced Technology Vehicle Manufacturing program, which seeks to hasten the development of green cars.
Energy Secretary Steven Chu addresses Ford workers last June after announcing automaker will receive a $5.9 billion loan.
Together, the four companies received about $8 billion in all out of a $25-billion budget. The problem, as Siry described it in a recent article posted at Wired's Autopia blog, is that "this massive government intervention in private capital markets may have the unintended consequence of stifling innovation by reducing the flow of private capital into ventures that are not anointed by the DOE."
In other words, a fledgling automaker might have a much harder time of raising funds from the private sector than one that has received millions of DOE greenbacks due to the tremendous amount of money needed to bring a car to market.
Siry writes that several sources within startup companies seeking DOE loans or grants have admitted that private fundraising is complicated by investor expectations of government support. Siry, incidentally, is a special adviser to Coda Automotive, which has not sought an Advanced Technology Vehicle Manufacturing loan.
The former Tesla spokesman notes that Aptera Motors has struggled this year to raise money to fund production of the Aptera 2e, its innovative aerodynamic electric 3-wheeler, recently laying off 25 percent of its staff to focus on pursuing a DOE loan.
According to a source close to the company, Siry writes, "all of the engineers are working on documentation for the DOE loan. Not on the vehicle itself. Another highly placed source at Aptera told Wired.com many potential investors wanted to see approval of the DOE loan before committing to invest."
He concludes that a potential solution to the problem he outlined "may seem counter-intuitive. The best way to avoid market distortion would be for the DOE to cast the net more broadly and provide loans and grants to a larger number of companies -- which ironically means being less selective."
We're not so sure we like the sound of that, because a lot of companies simply don't deserve our tax dollars. At a time when many Americans are worried about their financial situations, do we really want to encourage the government to be less selective regarding the companies that receive federal funding - to "start spreading the love," as Siry put it?
Posted by Scott Doggett December 8, 2009, 12:04 AM Permalink Categories: Coda, Emissions, Fisker, Ford, Fuel Economy, Hybrid, Legislation, Nissan, Plug-ins and Electric, Tax Incentives, Tesla Technorati Tags: Advanced Technology Vehicle Manufacturing, Aptera, Chu, Darryl Siry, Department of Energy, DOE, Fisker, Ford, Grants, Loans, Nissan, Tesla Motors
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Interesting take from Tesla Motors about Aptera's situation. We certainly hope the DOE loan to Aptera happens soon--we want to test drive our new car!