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I’m not an expert on political policy. For most of last night’s presidential debate, I didn’t really have a clue about what the candidates were talking about. Dodd-Frank? Simpson-Bowles? Big-Bird? Does anyone really know what any of this means?. However, I thought that one sound bite in particular would catch the attention of all of us in the automotive sector. On the topic of government subsidies to green energy companies, Governor Romney said that President Obama “only picked the losers,” mentioning not only the infamous bankruptcies of alternate-energy companies Solyndra and Ener1, but also electric automakers Fisker and Tesla.
Clearly, some of the $90 billion in subsidies given by the U.S. government to manufacturers of lithium-ion batteries and solar panels have backfired. But it seems like the plug-in luxury carmakers at Tesla and Fisker are just getting started. Tesla Motors has already begun delivering on its promise of energy independence by delivering dozens, perhaps even hundreds, of its new 2012 Model S all-electric sport sedans to the list of more than 10,000 depositors who’ve put down up to $50,000 to reserve cars when they are available.
Tesla CEO Elon Musk posted a report on Wednesday about the health of his company and wrote that Tesla would begin to repay its U.S. Department of Energy loan earlier than expected. And while Fisker hasn’t ever published a profitable quarterly report, the company has just closed a new deal for $100 million of private financing. Under new CEO Tony Posawatz, Fisker has started developing their new mid-sized Atlantic sedan and exploring partnerships within our industry.
Many investors are finding tremendous potential and value in investing in electric cars – irrespective of political affiliation. How long do you think it will take for battery-powered cars to become the new standard on the road? Will every major OEM have their own variant of the Chevy Volt within the next decade? Are government subsidies on electric technology developers a worthy cause – or are these companies just losers?