South Dakota Republican Sen. John Thune is calling for the Senate to end the Obama administration’s controversial green vehicle loan program in the wake of news that the Department of Energy is selling off the $168 million loan it gave to financially troubled Fisker Automotive.
“The Obama administration has gotten into the business of picking winners and losers at a significant cost to taxpayers,” said Thune in a statement. “From Fisker and Vehicle Production Group, to the Chinese-owned A123, this administration should not be making questionable investments with the American people’s hard-earned money.”
Energy Secretary Ernest Moniz recently hinted that the Obama administration may revive the dormant loan program that lent out millions of taxpayer dollars to Fisker and the Vehicle Production Group, both of which are financially troubled.
To counter that, Thune has put forward an amendment to the bipartisan Shaheen-Portman energy efficiency bill that would eliminate the Energy Department’s Advanced Technology Vehicles Manufacturing loan program.
The Energy Department has announced that they will sell off their $168 million loan to Fisker Automotive early next month. The company was given a loan guarantee to sell their luxury hybrid Fisker Karmas, which sold for $109,000.
But taxpayers will likely take a huge hit on the loan sale, as potential buyers are offering as little as 15 cents on the dollar for the troubled green automaker, The Wall Street Journal reports. Selling the loan for that little would mean taxpayers only recover about $25 million — a loss of $143 million.
The Energy Department has even admitted that it will not be able to recover the entire loan.
“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 W. Davidson, executive director of the Energy Department’s loan program office.
The Energy Department recently sold off its $50 million loan to the Vehicle Production Group for only $3 million, resulting in a $42 million loss for taxpayers after Vehicle Production Group paid back $5 million on the loan.
VPG was given the $50 million loan to make natural gas-powered vans. The company was estimated to produce up to 22,000 gasoline and natural gas-powered vehicles annually while creating 900 permanent jobs. They only built 2,500 vehicles and the Energy Department cut off their funding.
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