Taxpayers could lose out big on the sale of the government’s loan to Fisker automotive to a Chinese investor.
The Obama administration is currently ironing out the details of its sale of its $192 million loan guarantee to Fisker to the Chinese billionaire Richard Li. The Energy Department completed its auctioning off of Fisker’s loan this week, reports Reuters. Li and the Obama administration are currently ironing out the details of the purchase.
The sale to Li represents the second acquisition of an Obama-backed green company to Chinese investors. Earlier this year, the electric car battery maker A123 Systems was sold to the Chinese auto parts conglomerate Wanxiang Group.
“Fisker is just one of the many failures resulting from this administration’s green energy spending bonanza, and now Chinese investors will once again gain from another fumbled project while the American taxpayers will lose,” said Rep. Marsha Blackburn, a Tennessee Republican and vice chairman of the House Energy and Commerce Committee, in an emailed statement to The Daily Caller News Foundation.
No details on how much the loan was bought for have been released, but those interested in purchasing it had to bid at least $30 million on the outstanding $168 million of the loan. This means that taxpayers could lose up to $138 million on the loan guarantee to the troubled green automaker.
The last auto loan the Energy Department sold off — a $50 million loan to the Vehicle Production Group — netted taxpayers a $42 million loss.
“The Obama administration has gotten into the business of picking winners and losers at a significant cost to taxpayers,” said South Dakota Sen. John Thune. “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.”
Fisker was awarded a $529 million loan guarantee by the Obama administration in 2009 to help the company produce its luxury hybrid Karma, which sold for a $103,000 per car. However, the company experienced many problems early on, exacerbated by the failure of A123 which was supposed to supply batteries to Fisker.
The Energy Department cut off Fisker’s loan in 2011, after the company drew down on $192 million of the loan. The Karma’s poor sales and the lack of DOE funding has hurt the company’s ability to attract new investors.
Earlier this year, the Obama administration seized $21 million from Fisker to help repay the money it owes to taxpayers.
Li’s purchase of Fisker would give the Chinese mogul a key stake in Fisker, but it could take hundreds of millions of dollars to right the company’s financial situation and begin producing cars once again, reports the Christian Science Monitor.
The Energy Department did not respond to TheDCNF’s request for comment.
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