The Government Subsidized Fisker Hybrid Manufacturer is Liquidating its Assets

Posted by PITHOCRATES - November 24th, 2013

Week in Review

The Boeing 787 Dreamliner has had some problems with its lithium-ion batteries.  And now there is an icing problem with its engines.  Which is a bug to fix in their radical new design that eliminated the bleed-air system from its engines.  Reducing weight and increasing the efficiencies of the engines.  Which translates into lower fuel/operating costs.  Making the Boeing 787 Dreamliner a winning economic model.  And why airlines are waiting anxiously to add it to their fleets.  Now contrast this to a losing economic model.  The electric/hybrid car (see Fisker sells its assets to Hong Kong tycoon, files for bankruptcy by Jerry Hirsch posted 11/22/2013 on the Los Angeles Times).

An investor group headed by Hong Kong tycoon Richard Li purchased the federal loan made to Karma plug-in hybrid sports car maker Fisker Automotive and acquired the assets of the nearly defunct automaker.

Fisker has voluntarily filed petitions to liquidate under the U.S. Bankruptcy code, and Li’s Hybrid Technology has committed up to $8 million in financing to fund the sale and Chapter 11 process.

The federal government, which had lent money to the Anaheim auto company under a Department of Energy clean vehicles program, will lose about $139 million on the deal.

“Because of these actions, along with the sale announced today, the Energy Department has protected nearly three-quarters of our original commitment to Fisker,” said Bill Gibbons, a department spokesman.

The all-electric car suffers from range anxiety.  The dread a person feels as they are far from home and their battery looks like it won’t have enough charge to get them home.  Hybrids are expensive.  But carrying around that extra internal combustion engine in addition the electric system makes the car heavier.  And reduces its battery range.  Meaning that if you drive more than, say, a 45-mile round-trip you’ll be using that internal combustion engine most of the time.  Which will burn more fuel than in a gasoline-only powered car.  Because they don’t have the extra weight of the electric system to drag around.

This is why there isn’t a long list of orders for these electric/hybrid cars like there is for the Dreamliner.  For the Dreamliner is what most airlines are looking for in a jetliner for solid economic reasons.  While the electric/hybrid car is more of a novelty.  Few people are buying them.  And because of this they need government subsidies to remain in business.  Whereas Boeing’s strong sales are one of the few things driving the nation’s GDP into positive territory.

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