Simply For The Archives: Where Is Fisker?

Yahoo/Reuters is reporting:

The U.S. Department of Energy will auction next month a green technology loan made to Fisker Automotive, a move that may allow the struggling company to mount a comeback under a new owner.

Fisker, which has not built a vehicle in more than a year, now owes $168 million to the DOE. The auction is scheduled for October 11 with bids due on October 7, according to a notice posted on Tuesday on govsales.gov, which tracks government asset sales.

The auction comes about a month after the DOE put its $50 million green-energy loan to the Vehicle Production Group LLC on the block. The loan was later sold for $3 million.

"After exhausting any realistic possibility for a sale that might have protected our entire investment, the department announced today that we are auctioning the remainder of Fisker's loan obligation, offering the best possible recovery for the taxpayer," said Peter Davidson, executive director of the DOE's loan program office, in a blog post.

Another great investment paid for by the US taxpayer.  See also the "list of 38."

Another One Bites The Dust -- This Time An Israeli Electric Car Company

The AP is reporting:

Israel's trailblazing electric car company Better Place announced Sunday that it is shutting down, less than six years after unveiling an ambitious plan that promised to revolutionize the auto industry by reducing the world's dependency on oil.

Better Place was perhaps Israel's best known clean-tech company and a leading symbol of its "startup" nation status. Israel, along with Denmark, was the company's test market for developing nationwide networks of charging and battery-swapping stations that it hoped would eventually spread globally. But the company experienced repeated delays in getting off the ground and experienced weak demand for its cars after burning through millions of dollars.

The announcement that the company was filing for liquidation comes less than eight months after company founder Shai Agassi was forced out. The project won the support of Israeli President Shimon Peres, received generous financial incentives from the Israeli government and made Agassi a dynamic celebrity CEO.

Another reminder how incredibly the technology must be to get the "right" battery.

The interesting thing: Israel is so tiny, "range" for the battery-car should not have been an issue. And with all the natural gas Israel is finding, they will have no trouble producing electricity. If the Israelis can't make EVs work, it just begs the question...

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A Note to the Granddaughters

I guess I'm still in my Los Alamos / quantum mechanics reading phase. While visiting Tucson, my niece(s) introduced me to Louise Gilder's book, c. 2008, The Age of Enganglement: When Quantum Physics Was Reborn. My review of the book at Amazon. com should be up by the end of the week.

The author was 25 years old when she wrote this book, her first book.

Some years ago, I was unable to find the answer to the question: how and when was "quantum mechanics" invented? In high school and college, the atomic theory and quantum mechanics was presented in such a way that to those unfamiliar with how scientific discoveries were made (including me at the time) that it seemed like it "just happened."

Louise Gilder really does an outstanding job tracing the development of quantum mechanics. It will be interesting to see how quantum mechanics plays out over the next fifty years. It will be most interesting to see if what you lean in college (in about 10 years) is all that different than what I learned in college in 1972.

The book is just full of bits of trivia we all know, or should know, but have forgotten or never learned.

For example. back in 1927, one one atomic particle had ever been successfully predicted: Einstine's photon. The photon was one of only three particles even known at that time, and the other two had been found experimentally: the electron and the proton.

Feynmann, I believe, has said no one understands, and no one can understand quantum mechanics, and yet, with the development of QM, theorists predicted dozens of atomic and sub-atomic particles which have gone on to be experimentally confirmed. It's almost a metaphysics, I suppose.

And then this, in the golden years of physics (the five years after the 1927 Solvay Congress), "they" split the atom." A 25-year-old Gamow predicted that the proton, as a WAVE, could burrown into the nucleus and split it, but as a PARTICLE, the proton could not split the nucleus. Is that not bizarre? On April 13 or April 14, "they split the atom." [The exact date is open to question: two of the physicists dated their logs on this momentous day, but one dated it April 13th, one April 14th.]

This is a hard book to read; my review at Amazon, when it goes live, expands on this.

Animation:
Animation, Quantum Mechanics

Fisker Owners Unloading Cars At Huge Loss -- Well, At Least Trying To Unload Them

The LA Times is reporting:

In a week in which beleaguered Fisker Automotive failed to make a $10-million loan payment, owners are looking to unload their cars. In some cases, they are seeing some very low offers.

There were 48 listings for the high-end, hybrid electric Fisker Karma Eco-Chic and Eco-Sport cars on the Yahoo! auto sales pages.

That might not seem like a lot, but the new- and used-car research company Edmunds said there were only 947 new registrations of Fisker automobiles between January 2012 and February of this year.

Fisker Automotive hasn't sold a new car in nearly a year. On Wednesday, its executives were grilled on Capitol Hill on whether the company had used political influence to finance a fatally flawed business plan.

Fisker had been scheduled to start to pay down about $192 million it had borrowed under the Energy Department's Advanced Technology Vehicles Manufacturing Loan Program. It also laid off most of its workers this month.

Like The Eveready Bunny, The Fisker Story Just Keeps Going And Going And Going

Yahoo!Finance is reporting:

For a few months in 2012, Bruce Simon, the chief executive of gourmet food retailer Omaha Steaks International Inc., drove a $100,000 plug-in hybrid electric car known as the Fisker Karma. No longer.

Mr. Simon says his car broke down four times over the span of a few months. Each time, Fisker Automotive Inc. picked it up and sent it by trailer from his home in Omaha, Neb., to a dealer in Minneapolis.

The Karma was "so vulnerable to software errors, and the parts used were of such poor quality that eventually I insisted they take the car back and return my purchase price, which they did," he says. "It's a real shame, the car itself was beautiful."

The near collapse of the Anaheim, Calif., company—it missed a loan payment on Monday, earlier dismissed most of its staff and has hired bankruptcy advisors—comes as affluent buyers like Mr. Simon have turned away from the once promising startup and falling gasoline prices have chipped away at demand for electric cars.

Barring a last-minute rescue, Fisker is poised to become another DeLorean Motor Co. or Tucker Corp., a symbol of the difficulties of creating entirely new car companies. Unlike those others, it also represents one of the most prominent failures of the government's use of public funds to wean American industry from fossil fuels—and of how that government interest pushed Fisker to reach too far.

I am posting the story for two reasons: a) the Fisker is an important story; many, many story lines; and, b) I try to order Omaha Steaks at least once a month (for my younger daughter/son-in-law or for my granddaughters).

Someday I will do a cost analysis of Omaha Steaks vs local supermarket offerings, but needles to say, Omaha Steaks is great at marketing; has exceptionally good food; and, always delivers on time. 

Many Stories Being Posted -- WSJ Links

The wells coming off the confidential list have been posted.
There are several important and/or interesting stories coming in from readers. In an effort to get them posted as soon as possible, I may just post the link and a quick note, and then come back to them.

If you see "In Progress" at the top, it means I plan to come back to the article and clean it up.

Taking up a lot of time this morning is sorting out KXNET's story about Charlotte 2-22H which I think is an error. At the link, it's the very last story.

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WSJ Links

Section D (Personal Journal): some good stories today, but not enough time; maybe later

Section C (Money & Investing):

• Age starting to catch up with ATT 

That vitality may be skin-deep, though. Tuesday's first-quarter results should look fine. Analysts polled by FactSet forecast earnings per share of 64 cents, up from 60 cents a year earlier.

But AT&T's ability to throw off cash may have peaked last year. That matters for any company, and especially one whose shares are valued for their yield in a low-rate world. 

AT&T's stock has risen almost twice as fast as the broader market in the past year, with its dividend yield dropping to 4.6% from 5.6%. But that still leaves it as the highest-yielding component of the Dow Jones Industrial Average.

• Netflix growth goes from stream to rapids. 

The Internet-video company Monday said it added a net 2.03 million domestic streaming subscribers in the first quarter, compared with a net 1.74 million in the first quarter of 2012. That gives Netflix 29.2 million total domestic streaming subscribers, roughly the same as Time Warner's TWX +0.30% HBO in the U.S. Aiding this growth was the media buzz surrounding Netflix's original series "House of Cards."

• Consumers running on more than fumes.

This might have something to do with the weather, since last month was wintrier than usual. But the decline in a variety of consumer-confidence gauges suggests there is more than just a chill in the air at work. The favorite theory is that January's payroll-tax increase has begun to weigh on consumers just as sequester-related government-spending cutbacks are putting a further drag on paychecks.

But while spring swoons in consumer spending have in recent years become a regular occurrence, any downtick this time around will likely be brief. While government-related moves are sapping consumers' strength, two other forces, lower energy costs and rising asset prices, are bucking them up.

• Germany joins low-speed Europe.

Germany's sudden aversion to new cars has been more puzzling. The latest 17% year-on-year drop in sales in March was partially attributed to there being two fewer working days this year. But German car manufacturers are generally at a loss to explain the sales slump, other than to cite weak consumer confidence amid continuing uncertainty around the European economy.

The concern is that Germany's car market is simply now catching up with other depressed European markets. Germany's car sales last year were still only 11% short of their 2006 peak, whereas Spain and Italy's markets have shrunk about in half since precrisis highs. 

Section B (Marketplace):

• Viewers stream to Netflix.

Shares of Netflix soared 24% in after-hours trading. The company also reported a small profit compared with a loss a year earlier, as well as a strong reception for "House of Cards," its high-profile original series which debuted in the quarter.

Netflix now is nearly on par with Time Warner Inc.'s HBO premium cable channel in terms of paying customers. HBO had 28.7 million paid U.S. subscribers at the end of the year, according to SNL Kagan, while Netflix's paid streaming subscribers at the end of March totaled 27.91 million.

The company ended the quarter with 29.2 million U.S. streaming video subscribers, including those with free promotions, beating Wall Street's expectations.

• Pilot Flying Chief CEO 'embarrassed' by fraud allegations

Pilot Flying J Chief Executive Jimmy Haslam III said Monday the truck-stop giant has put some of its sales team on administrative leave and is reviewing all contracts with trucking companies amid allegations its employees defrauded customers on diesel-fuel rebates.

Pilot also will scrap manually processed contracts by the end of June and hire a chief compliance officer and outside special investigator in the coming weeks to address allegations of wrongdoing, Mr. Haslam said in a statement delivered to reporters at company headquarters in Knoxville, Tenn. The allegations were raised by a current employee and a former employee, among others, according to the Federal Bureau Investigation.

• US seized $21 million from electric car make Fisker

The U.S. Department of Energy said Monday that it has taken $21 million out of a reserve account set up as part of a loan to luxury plug-in car maker Fisker Automotive Inc. in anticipation of a default on a payment the company owes on a federal loan.

"Given the obvious difficulties the company is facing, we are taking strong and appropriate action on behalf of taxpayers," the Energy Department said in a statement. The department "recouped the company's approximately $21 million reserve account—funds that came from the company's sales and investors, not our loan—and will apply those funds to the loan."

Fisker's chief executive, Tony Posawatz, said in March the payment on the $192 million the company borrowed under a federal advanced technology vehicle program was due Monday. 

The Energy Department said it took the money 12 days ago. The Obama administration has been criticized by Republicans in Congress for its management of loans made to several clean energy technology companies, including Fisker. A GOP-controlled House subcommittee has scheduled hearings on the Fisker situation later this week.

Section A:

Stories about the surviving Boston Marathon bomber and his legal rights. The rhetoric from the Obama administration: terrorism. Legal actions suggest he will be tried as a common criminal. He is a US citizen; he was read his Miranda rights once he was officially accused and, more importantly, conscious, and able to respond (folks were upset that he was not given his Miranda rights, despite the fact he was unconscious; part of the Miranda mantra includes a "do you understand" clause). By the time this is over, 47% of Americans will remember him as a enemy combatant who went back to an Al Qaeda training camp in Chechnya for training (right or wrong, that's what 47% of Americans will believe). Others, including his mother, will believe he was framed by the FBI.

• Mayo Clinic's upmarket move.

The Mayo Clinic has big plans to join other top-flight medical centers in an expensive fight for well-heeled patients, but it faces a problem: Its sleepy hometown needs a face-lift.

Mayo, the biggest private employer in Minnesota, is proposing to invest $3 billion to $3.5 billion over 20 years to transform its already big operation here into a "destination medical center." But the clinic thinks Rochester needs some major upgrading as well—including new parking, sewers and other public works and maybe even a high-speed rail link to Minneapolis/St. Paul some 75 miles to the north.

Much of that would be aimed at attracting a bit of glitz to this out-of-the-way city, such as high-end hotels and restaurants, to help the clinic appeal more to lucrative patients from around the world.

• Obama budget spreads the tax pain. Obama decides to start raising taxes on the poor. This I have to read. Later. And especially the 48 comments, so far. Apparently the rich don't have enough money to pay for ObamaCare.

The op-ed articles are all great today, but don't have time to go through them here. 

Your Tax Dollars At Work: $600,000 For Each Car

Bloomberg is reporting:

Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report.

The Anaheim, California-based company made about 2,500 of its $103,000 Karmas before halting production last year, disrupting its plans to use a $529 million U.S. loan to restart a shuttered Delaware factory owned by the predecessor of General Motors Co. The Karma was assembled in Finland.

Fisker was allowed to keep using money from its Energy Department loan after violating its terms multiple times, according to a report released April 17 by PrivCo, a New York- based researcher specializing in closely held companies. It said it based its report on documents, including the loan agreement, obtained through the U.S. Freedom of Information Act.

Energy Dept spokesman disagrees with some of the report, but apparently everyone agrees that the endeavor cost the government about $600,000 to make a $100,000 car for the elite. My opinion, of course.  And, yes, I know start-up costs explain much of this, and when the car went into mass production, the cost/car would come down.

Of course, those start-up costs were spent on a car assembled in Finland, the foreign country that borders Russia, not a county in California.

Well, This Can't Be Good

Reuters is reporting:

The founder and executive chairman of Fisker Automotive Inc resigned from the cash-strapped "green car" startup on Wednesday, saying he was at odds with the automaker's top executives over business strategy.

Henrik Fisker's abrupt exit comes at a sensitive time for the company, which has not produced a car since last July and is looking for a financial backer to buy a stake and help build its second model, the Atlantic plug-in hybrid.

But, then Steve Jobs was fired from his own company, and things worked out well for him and Apple.

So, you never know. 

Another About Ready To Bite The Dust? Fisker Idles Production

Link here to Reuters.

Fisker Automotive Inc said on Thursday that it has temporarily idled production of its Karma plug-in hybrid after its lithium-ion battery supplier A123 Systems Inc cut its output.

A123, which is the sole battery supplier for the Karma, slowed production after filing for Chapter 11 bankruptcy protection in October, Fisker spokesman Roger Ormisher said.

Fisker has enough lithium-ion batteries on hand in case an owner needs a replacement, Ormisher said. The company expects to have clarity on its battery inventory after December 6, when an auction to sell A123 is scheduled.

How many replacement batteries would one owner need?

Instant Karma

Link  here to Jalopnik.com (a huge thank you to a reader).

Approximately 16 of the $100,000+ Fisker Karma extended-range luxury hybrids were parked in Port Newark, New Jersey last night when water from Hurricane Sandy’s storm surge apparently breached the port and submerged the vehicles. As Jalopnik has exclusively learned, the cars then caught fire and burned to the ground.

Our source tells us they were “first submerged in a storm surge and then caught fire, exploded.” This wouldn’t be the first time the vehicles, which use a small gasoline engine to charge batteries that provide energy to two electric motors, had an issue with sudden combustion.

Stunning photos at the link. 

On a completely different note, my daughter tells me that there is a high-end automobile that has a safety feature in which a car that is submerged in water (such as when folks drive their cars into lakes and rivers) in which the driver's side window will automatically open upon complete submersion.

Two nights ago, after the heavy, heavy rainstorm, in the aftermath of Hurricane Sandy, as the storm passed through western Massachusetts, a driver went out to the parking lot to find that the heavy deluge had activated the safety mechanism. The driver's side window was completely open due to the heavy rainfall. His car was full of water.

My daughter remarked that sometimes one can carry safety innovation a bit too far. After all, how often do owners of high-end automobiles drive their cars into rivers and lakes? Probably just once.

Absolutely Nothing To Do With The Bakken -- A123 Batteries -- A Mystery -- For the Bakken, Skip and Scroll

Updates

November 23, 2013: A123 is now B456, owned by the Chinese. 

Original Post

This story was on CBS Nightly News tonight -- Don alerted me to the story.

The story has to do with A123 -- a battery company located just "down the street" from where I'm staying. I've followed this story / this company for a very long time for many, many reasons.

For two earlier updates regarding A123, click here and here.

There are so many story lines, but the best I will save for last.

Story lines:

• It shows just how challenging this battery "stuff" really is. No breakthroughs despite many companies and many billions spent. Steve Jobs of Apple Corp (the computer company) once said his biggest challenge for the company was a better battery. (There is a company in Belmont, MA, that is working on a new battery; they may be closer to a breakthrough.)
• This is yet another company that received millions in stimulus money from the administration and has nothing to show for it.
• I had read the company's press release a couple weeks ago about a new battery. I did not know what to make of the announcement. According to the linked CBS story: "many analysts seemed underwhelmed."
• A123 is a battery company, so in light of the battery breakthrough announcement, this last paragraph in the story is very strange:

A123 isn't giving up. It still has more than 100 million federal stimulus tax dollars left to spend. Recently the company said it will hire 400 people -- not to build batteries for electric cars, but for power grids.

If the breakthrough was that big a deal, why wouldn't they be using the 100 million federal stimulus tax dollars and 400 new employees to press forward on this new technology?

That is a huge  story. In fact, some folks might think that is the big story, that the company, despite a breakthrough in battery technology, is moving into a new endeavor: "power grids."

Nope, this is the bigger story, and it starts earlier in the linked article:

The road wasn't always so bumpy. When President Obama announced 90-billion stimulus tax dollars for green energy, A123 stepped up for a slice of the pie. It spent $1 million lobbying Congress and federal agencies, and won 249 million in stimulus dollars.

When an A123 plant opened in Michigan in 2010, the company even got a call from President Obama. "I'm calling to congratulate A123 Systems on this tremendous milestone," he said.
 ....

Herrera was among 1,000 workers who landed jobs at A123.

But one month after that interview, A123 laid off 125 employees.

Then the luxury electric car Fisker Karma failed. It was powered by a faulty A123 battery. "It's low, it's sleek, it's sensuous... it's also broken! " said Consumer Reports.

Electric vehicles fall drastically short of Obama's 1 million goal

All of that was in the CBS transcript including that last link. 

[Note: CBS did not note that Fisker was a recipient of federal stimulus money also; if I remember correctly, the Fisker was going to be built overseas. But I digress.]

Finally: here's the big story -- CBS Nightly New has very limited time to present the news; the producer must be very, very selective in what he/she decides to air. The question is, and the big story is, why would CBS, a huge supporter of the president and liberal causes, air a story on another administration failure jut months before the election? In the big scheme of things, it's a pretty uninteresting story for the average viewer.  I cannot, for the life of me, figure out why CBS would air this story.

A Feel Good Story To Brighten One's Friday

Unable to restart the $100,000 Fisker Karma

Consumer Reports bought the Fisker Karma from a Connecticut dealer.

CR takes it for the speed test. While gently moving through 65 mph, the "engine light" comes on. CR completes the speed test, brings it back to the center to park it. Moments later, it would not restart.

On Wednesday, Consumer Reports engineers were just starting to calibrate the Karma's speed by driving 65 miles per hour down the magazine's test track in East Haddam, Connecticut, Champion said.

"During the gentle run down the track, a light on the dashboard came on," he said, referring to the battery light.

The speed test was completed despite the light on the control panel, but after it was parked, officials were unable to get the car restarted. A spokesman for A123 Systems, which makes the Karma batteries, could not be reached. 

Champion, who called the Karma "gorgeous looking,"  said problems with new technology is not surprising.

But it sure looks gorgeous sitting there. I can't make this stuff up.

The question is whether AAA is trained to re-start Fisker Karmas.

Thank you to a reader for alerting me to this. I had to do some valet parking this morning and all cars started without a hitch. No, a Fisker was not among them.

Forbes Take On the Demise of the Coal-Powered Vehicle -- Bright Automotive Folds

Updates

February 19, 2014: I guess Fisker is now a Chinese company -- Wanxiang Group, China's top auto parts company. 

January 2, 2014: Fisker bankrupt; in court trying to sell assets to Korean company. Chinese company that Fisker says caused their bankruptcy is trying to buy Fisker's assets. In one corner: Wanxiang Group, China's top auto parts company. In the other corner: South Korean tycoon Richard Li.

September 17, 2013: where is Fisker? DOE putting the $168 million loan on the auction block for another huge loss for the taxpayer. 

May 26, 2013: another electric car company folds -- this time, an Israeli company.

April 28, 2013: Fisker owners trying to unload their cars; willing to take huge loss. 

April 24, 2013: how the wheels came off the Fisker.

April 19, 2013: $600,000 for each $100,000 car. 

April 5, 2013:  Fisker will fire 75% of work force.

April 5, 2013: Key staff being laid off. 

Fisker Automotive has laid off its public relations staff and other employees today, according to a source familiar with the company, another sign of deepening problems at the beleaguered electric car maker.

March 13, 2013: Founder and CEO resigns. Abruptly.

November 29, 2012: Fisker idles production. Battery supplier, A123, in bankruptcy.

August 20, 2012: more chariots on fire; GM recalls a quarter-million mid-size SUVs at risk of ... you guessed it ... fire due to possible electrical shorts in power windows and door locks. I think I saw this in a movie: hit the remote control on your key fob to unlock the doors and the vehicle bursts into flames.

August 18, 2012: more chariots on fire; Fisker recalls 2,400 Karmas for cooling problems due to bad fan; results in vehicle fire;

August 15, 2012: Fisker needs "at least" $150 million to keep going. Has raised $400 million from venture capitalists, but needs more. Cut off from govt trough.

April 4, 2012: Fisker, the luxury electric vehicle appears to be nearing the end of its run.

Fisker was awarded a $529 million loan under an Obama administration program designed to spur production of advanced technology vehicles. Fisker drew about $193 million of the Energy Department loan to engineer its Karma luxury plug-in hybrid.

But a plan to retool the former GM factory to build a second model, now called the Atlantic, was delayed, and the Energy Department froze the loan last May.

The production site for the Atlantic could depend on where Fisker gets new money to replace the U.S. loan. If an overseas investor emerges, the car could be built overseas.

Fisker no longer plans to start building the Atlantic this summer.

The company is reviewing many aspects of Fisker's strategy, including whether battery maker A123 will supply batteries for the Atlantic.

Fisker has suffered setbacks on recent weeks, including a recall by A123 of batteries installed in Karma models to fix defects that caused vehicles to stall.

April 3, 2012: a bit more on the financing --

Last week Bright Automotive, an electric vehicle start-up company that General Motors helped two years ago with an investment of at least $5 million from its venture capital arm, gave up hope on winning a $450 million loan from DOE’s Advanced Technology Vehicle Manufacturing program. As the company announced the withdrawal of its loan application and that it would end operations, CEO Reuben Munger and COO Mike Donoughe sent (and released to the media) a letter to DOE Secretary Steven Chu that sharply criticized the loan programs processes and outlined their frustrations.  

Meanwhile, Fisker's bankruptcy "worse" than Solyndra. SEC could take legal action against brokers promoting this deal back in 2009.

The Securities and Exchange Commission has notified the brokers who raised most of the private financing for taxpayer-backed electric automaker Fisker Automotive that charges may be brought against them, in connection with a private offering in 2009.

Original Post

I don't get it, the fascination folks have with the coal-powered vehicles. I have nothing against coal-powered vehicles, per se. But at twice-the-cost for half-the-product I just don't get it. Give me an electric vehicle with half-the-cost and twice the product and I will buy three: one for me, one for my wife, and one for my younger daughter.

Here's Forbes' opening:

Bright Automotive, a promising start-up company developing hybrid plug-in delivery vans for fleet customers, closed its doors this week after running out of money. It’s too bad, really. Its lightweight van, called the Bright Idea, seemed like a perfect vehicle for businesses that need to make service calls or deliveries. With a 30-mile range on electricity, and the equivalent of 85 mpg, the van would supposedly lower their total cost of ownership by 10 percent to 30 percent. By building it in Indiana, Bright expected to create 675 Midwestern jobs.

If it was such a bright idea, why didn't it survive? Where's the beef? 

For starters, lowering one's total cost by 10 percent just doesn't grab headlines (the "... to 30 percent" is a marketing tool -- if they could deliver 30 percent savings, they would advertise "... to 50 percent").

I see on CNBC today, Chrysler increased its sales by 40% over some time period, compared to single-digit increases for many of the other dealers. The CNBC folks were surprised, saying that Chrysler leaned towards SUVs, minivans, and gas-guzzling jeeps. How could Chrysler do so well with gasoline trending higher? Probably because Chrysler is offering twice-the-product at a great price (CNBC noted that Chrylser's sales improved even after Chrysler ended some of their incentives).

I can understand why folks don't want an all-electric vehicle but hybrids are a different story. If the driver doesn't like to plug it in at night, or park somewhere where there is no outlet, not to worry; they always have the gasoline engine as backup, although I believe the tank is small and range is limited if that's all you have. 

One of the CNBC talking heads mentioned that he bought two new cars this month; it would have been interesting to find out if he was concerned about mileage or the environment when he bought the car. (I assume, except for Joe, all CNBC commentators will vote for Mr Obama or will stay home.)

The start-ups blame...drum-roll..... the hand that feeds them, the US government:

Both companies [the other being Fisker automotive -- the company that was building its cars in Finland with US taxpayers stimulus money] blamed their financial troubles on bureaucratic gridlock in a U.S. Department of Energy loan program intended to promote the development of cleaner, more fuel-efficient cars in the United States. Three months ago, another fledgling EV maker, Aptera, pulled the plug on its four-year-old business for the same reason.

It should be noted that North Dakota farmers, recipients of much federal aid, have had to put up with bureaucratic gridlock for decades. Get over it. The oil industry, not only has no federal aid, but literally has to fight the administration for every one step forward, two steps back. And they are doing just fine, thank you.

The last paragraph in the linked Forbes' article:

I want the government to be vigilant when deciding to whom it’ll loan my tax dollars. And any company whose business model is built around a government loan doesn’t deserve to be in business. But I do think there’s nothing wrong with government giving a temporary leg up to entrepreneurs with promising technologies that will boost American competitiveness in the long run. Other countries do it all the time. The U.S. had better wake up.

Vigilant. Like being vigilant in loaning to the four or so solar companies that are now bankrupt or near bankruptcy.

Obama's Team of Five: $3.9 Billion to 21 Energy Companies -- Another Solar Company Files For Bankruptcy -- Energy Conversion Devices

Updates

November 16, 2012: A123 received almost $1 million (auto-pilot disbursement) on very day it filed for bankruptcy.

The Obama administration provided struggling battery maker A123 Systems Inc with nearly $1 million on the day it filed for bankruptcy, the company told lawmakers investigating its government grant.

The company, which makes lithium ion batteries for electric cars, filed for Chapter 11 bankruptcy protection last month after a rescue deal with Chinese auto parts supplier Wanxiang Group fell apart.

That same day, October 16, A123 received a $946,830 payment as part of its $249 million clean energy grant from the Energy Department, ...

I guess it's the principle of the thing. $1 million / $249 million  --> 0.4 percent. Also, one million dollars is about as much as it costs for the Obamas to go to Paris for the weekend. In other words: it is so inconsequential, it does not matter. Posted for archival purposes only.

October 16, 2012: A123 declares bankruptcy; automobile business assets bought by Johnson Controls.

August 9, 2012: A123's angel? China.

Early in 2012 President Barack Obama responded to critics of his multi-billion-dollar green technology initiative by saying he was "not going to cede the wind or the solar or the battery industry to China."

Six months later, he faces that very real possibility for the U.S. car battery industry, a once-high flying sector buttressed by generous federal grants, but struggling with a green car market that has fallen far short of expectations.

A123 Systems Inc on Wednesday became the second U.S. government-backed battery maker this year to go overseas for a lifeline - and it turned to China. Auto parts supplier Wanxiang Group will take a controlling interest and invest $450 million in the Massachusetts-based battery maker, which faced running out of cash by the year-end.

Earlier this year, Ener1 Inc, another battery maker that received a government green technology grant, emerged from Chapter 11 bankruptcy under the control of Russian investor Boris Zingarevich. New York-based Ener1 is also a joint-venture partner in China with a Wanxiang subsidiary.

June 17, 2012: CBS Nightly News had this story on A123. 

A123 has declined further interview requests. As for that battery breakthrough announced this week, many analysts seemed underwhelmed.

"These new technologies that are introduced have to be vetted over a number of years before they actually find their way into products," said Theodore O'Neill of Wunderlich Securities. "So the product itself is interesting, but doesn't do anything to solve the financial problems that A123 has."

A123 isn't giving up. It still has more than 100 million federal stimulus tax dollars left to spend. Recently the company said it will hire 400 people -- not to build batteries for electric cars, but for power grids.

February 24, 2012: another "green company" in financial trouble; $400 million in stimulus money; lays off 125; increases pay for top executives; this time it's A123 in Boston, a battery company, the company's primary customer, Fisker Automotive, is also struggling financially;

February 17, 2012: Democratic National Convention co-chair received $230 million in "green stimulus" money.

February 15, 2012: Venture capitalists on Obama's team explains the solar debacle. 

Sanjay Wagle was a venture capitalist and Barack Obama fundraiser in 2008, rallying support through a group he headed known as Clean Tech for Obama.

Shortly after Obama’s election, he left his California firm to join the Energy Department, just as the administration embarked on a massive program to stimulate the economy with federal investments in clean-technology firms.

Following an enduring Washington tradition, Wagle shifted from the private sector, where his firm hoped to profit from federal investments, to an insider’s seat in the administration’s $80 billion clean-energy investment program.

He was one of several players in venture capital, which was providing financial backing to start-up clean-tech companies, who moved into the Energy Department at a time when the agency was seeking outside expertise in the field. At the same time, their industry had a huge stake in decisions about which companies would receive government loans, grants and support.

During the next three years, the department provided $2.4 billion in public funding to clean-energy companies in which Wagle’s former firm, Vantage Point Venture Partners, had invested, a Washington Post analysis found. Overall, the Post found that $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.

Original Post

Link here to Reuters article.

Lightweight solar product maker Energy Conversion Devices Inc filed for bankruptcy protection on Tuesday, the latest in a string of solar companies that have collapsed in an industry shakeout.

The company, whose filing follows years of losses and months of public discussions with bondholders, said it would sell its United Solar Ovonic unit and other assets in bankruptcy.

Energy Conversion, whose solar laminate products are used for panels on rooftops and buildings, said it would continue to operate during the sale process.

Energy Conversion's failure is the fourth major bankruptcy in the industry in the past year. Evergreen Solar Inc, Solyndra and SpectraWatt have also sought Chapter 11 protection.

The dots are starting to connect. A long laundry list of solar energy companies were given loans, grants, tax breaks, etc., by the federal government all about the same time. They all had a similar business plan, and right on cue, they all foundered about the same time, about the time the taxpayer money ran out.

My hunch is that if the current president is re-elected, these companies will get a new lease on life, and the process will start anew.

It should be noted that bankruptcy does not occur overnight. Although the bankruptcies come when natural gas prices are in free fall, these solar companies couldn't even make it when natural gas prices were (a bit) higher and when these solar companies had the venture capital and tax breaks on their side.

Investors Only -- Pickens' Picks -- One Surprise -- Nothing To Do With The Bakken

Updates

March 27, 2012: Wow, the news for A123 keeps getting worse. Now, they have a $55 million bill to fix faulty batteries.  Data points from the article:

• 2nd time in three months that A123 found a flaw in its automotive batteries, used in several cars, including hybrid BMWs and the all-electric Karma, manufactured in Finland; Fisker headquarters in Anaheim, CA
• company's stock peaked above $25/share in 2009; now below $1.50
• A123 already shaky after Fisker announced it would be building fewer Karmas; the loss of business there resulted in several hundred Michigan employees being laid off
• Fisker Automotive recent cut off from hundreds of millions in federal funding
• an A123 plan in Livonia, Michigan, received nearly $250 million grant from the government; has not turned a profit since its IPO in 2009
• A123 burning through cash, and probably will need to borrow more money to cover most recent bill

Original Post

At first I was not going to link this article. There were no surprises in the list compiled by an oilman.

Then I took a second look. Look what's missing. There are no -- nada, zip, zilch -- unless I missed them -- no renewable companies in this list. This list was compiled by one of the most vocal advocates for wind energy back in 2008, or whenever it was. No, nothing.

There's a difference between renewables as a significant energy source for the world's needs and the opportunity for a retail investor to make money investing in renewables. It is obvious that renewables will have minimal effect on meeting global energy needs in my investing lifetime, but that doesn't mean investing in small renewable growth companies can't be very rewarding.

So, it's surprising that there are no companies in the renewable energy business on the Pickens list.

One of his very few (only one?) non-oil-related company was A123, and that took a huge hit, down almost 20 percent so far.

A123 is in the electric battery business, particularly for hybrid vehicles. Recently their share price plunged (not my word; "plunged" was used by Motley Fool.com). Motley Fool suggested the plunge was due to financial reasons (dilutive stock offering, and other matters). With 100 million shares outstanding, another 18 million shares is a significant offering. But when oil companies in the Bakken announce a public offering, their share price appreciates as often as not. What Motley Fool failed to note was that simultaneously with the dilutive stock offering, news was coming out of Japan that the automobile industry is in a world of hurt due to rolling blackouts following loss of 30% of their electrical capacity. And correct me if I'm wrong, on top of that, the vast majority of hybrid vehicles are coming out of Japan. And as long as I'm piling on, Motley Fool also failed to note something else (see below).

Incidentally, the headquarters for A123 in Watertown, Massachusetts, is just down the street from where I am typing.

I don't particularly like linking "advertisements" for one's products, but the message in this MarketWatch story is worth the link:

The underlying thesis is that a country in which public unions are starting to strike at the state levels and the federal government is cutting services and welfare for the poor and elderly can no longer afford to subsidize many of these so-called alternative/green companies like A123. And while that thesis continues to play out, one of the other primary tenets behind our bet against A123 specifically is that this Company is nowhere near generating real cash flow and that the Company will have a very hard time surviving without a major dilution or debt raise — or a miracle — in its current iteration. Indeed, on the company’s most recent earnings call, they told analysts to expect their EBITDA loss would widen again this year.

The title of the link from "A123 Headlines" was: "Alternative Energy Is Doomed and How To Profit On the Collapse" and is in the Wall Street Journal.

It will be interesting to hear tomorrow morning whether the president reiterates that oil is yesterday's energy in tonight's energy "security" speech. As one listens to the speech (which I won't hear) keep in mind that his economic czar is the CEO of GE, a huge proponent of wind energy, but a company that has been rapidly diversifying into oil; his Secretary of the Interior formulated the "permitorium" in the Gulf; and his Secretary of Energy is a nuclear physicist who advocates nuclear energy.