Tesla electric car, bashed by Romney, now showing profit, paid back Obama admin. loan 5 yrs early

Boy. Romney sure can pick ’em.  For a guy who claimed to know Detroit and the auto industry, Mitt Romney sure was wrong about Tesla. The company that offers sporty (and expensive) electric cars is now recording profits, and will pay back government loans ahead of schedule.

Maybe Romney didn’t like Tesla because it was helped by the government and not his dad (like he was) or his vulture capitalist friends. Whatever it was, Romney used Tesla as an example of bad investment by Obama during one of the debates last year.

“Investing in companies? Absolutely not. That’s the wrong way to go.”

Oops.

Like many other points the Repbulicans tried to make during the campaign, they missed it on this. You probably remember how Romney made an effort to take credit for the successful Detroit bailout that he was actually against. The New York Times called him out in an editorial for his ever-changing positions on the bailout. Even the CEO of AutoNation (the largest car retail outlet in the US) blasted Romney for his positions on Detroit.

As a VC guy, Romney should know that every investment is not a winner. There are plenty of Solyndra failures out there in the private investment world, so it was always dishonest of Romney to make a point about that disaster. For every ten investments by VC’s, perhaps two or three are a success, the same number a failure, and the rest are break even. It’s a numbers game, and Romney knew it.

Another thing, Romney certainly knows from years in the business that not every company turns a profit immediately, especially companies that are breaking new ground in a tough industry, such as the auto industry.  Over the long term it’s hard to say what will happen with Tesla, but for now, they’re on track with paying back the government five years ahead of schedule and they’re turning a profit.

This reminds me of Fox News bashing solar energy a few months back.  Remember that one?  Fox claimed, incredibly, that the only reason solar power works in Germany is because Germany – a relatively small country known for cold dark rainy days – gets more sun than the US, home of Florida, California, and the entire southwest.  How man deserts does Germany have?  We posted a solar map showing how much sunlight the US gets versus Germany – not surprisingly, we blow Germany out of the water, in terms of how much sunlight we got.

These guys just lie. They hate science.  They hate innovation. And they really hate anything that challenges the guaranteed income of their big campaign donors like Big Oil, Big Finance and Big Pharma – to hell with the American people.  Whether it’s “family values” or electric cars, the Republican party has a vested interest in keeping America in the 1950s.

I never thought highly of Romney, but I never thought he was stupid.  Perhaps this is just one more piece of evidence of how truly dishonest, or desperate, the man – and the party – truly were.  After all, as John noted this morning, Romney’s campaign manager is now claiming it’s Democrats who keep politicizing gay rights.  These guys will say anything to win.  And perhaps that’s why they keep losing.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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34 Responses to “Tesla electric car, bashed by Romney, now showing profit, paid back Obama admin. loan 5 yrs early”

  1. Camarada Chavez says:

    LOL YOu are buying your gasoline from Russian Lukoil, Venezuelan Citgo, European BP and Shell. You are a third world nation! Keep bawling about taxing your employers more and keep repeating the pap the Sulzbergers and the Warren Buffets are feeding you while they grow rich. Stupid gringos, you hate your own employers and are left with nothing but debt.

  2. Camarada Chavez says:

    A second car that costs $ 71,000.00 and a $ 7,5000.00 Federal welfare payment for the rich (no you proles don’t qualify because you don’t have tax bill large enough to qualify for the corporate welfare payment) and a second corporate welfare check for “electric car credits” mandated by government from car buyers in progressive states like California. Must be nice being rich and on corporate welfare. Of course, this is is hardly what I would call transportation for the masses.

    Keep bashing the RINO Romney, who was rejected by his own party) while Bansker/Government complex keeps your wages depressed due to high unemployment. You deserve the miserable country you are getting. LOL

  3. Right Speak says:

    hahaha….I Guess Romney was right…Da ya think?

    Fisker issues big layoff, employees hire firm that sued Solyndra

    Read more: http://www.foxnews.com/politics/2013/04/06/report-obama-backed-fisker-lays-offs-workers-faces-suit-by-solyndra-related/#ixzz2PjJkg9NI

  4. Richard Veil says:

    HI. I am so sorry to interrupt your dream and Romney bashing that you are doing for reasons unknown to me. Living in the past I guess. In any case knock knock.

    Reality here.

    Tesla rival Fisker lays off nearly entire workforce

    By Jerry Hirsch

    Los Angeles Times

    Posted: 04/05/2013 12:40:01 PM PDT

    Updated: 04/05/2013 03:08:43 PM PDT

    Everything Auto

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    More automotive headlines

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    Calif. DA says Toyota to pay $16M settlement

    Tesla rival Fisker lays off nearly entire workforce

    Hybrid vehicle sales speed up

    Hyundai-Kia recalling nearly 1.9 million vehicles

    Stymied by unsuccessful efforts to craft a deal with Chinese investors to save the company, struggling carmaker Fisker Automotive laid off most of its workers Friday.

    Analysts said the move, combined with retaining a bankruptcy law firm last month, likely signals the death of the Anaheim company, which was founded by auto designer Henrik Fisker in 2007 years ago with high hopes of selling highly styled hybrid sports cars and sedans.

    That could leave the federal government essentially owning the automaker.

    Fisker ran into a cash crunch after the federal government froze an Energy Department Advanced Technology Vehicles Manufacturing Loan Program loan in 2011. Fisker is supposed to make the first payment

    A Fisker Karma luxurious electric car is seen the US car maker’s booth during the 83rd Geneva Motor Show on March 5, 2013. FABRICE COFFRINI/AFP/Getty Images ( FABRICE COFFRINI )

    on some of about $192 million it borrowed from the government later this month. Fisker’s tooling equipment and other property make up the collateral on the loan.

    The Energy Department froze the funding after Fisker stopped meeting various development milestones for the business set as conditions for the financing, said Aoife McCarthy, a department spokesperson.

    McCarthy said the government “is committed to the best outcome for taxpayers. Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact.”

    Fisker “was on life support before,” said Dave

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    Sullivan, manager of product analysis for AutoPacific, an industry consulting firm. “It just doesn’t look good.”

    Fisker has sold just 2,000 of its Karma hybrid sports cars and hasn’t assembled a vehicle in about nine months.

    “Without cash coming in they can’t pay bills, they can’t do development on the next vehicle. The race is over for them now,” Sullivan said.

    The cars might live on, probably with an adventurous investor buying the assets from an eventual bankruptcy and dropping conventional gasoline engines, such as a turbo-charged V-6 or larger V-8 into the sleek Karma body and selling it as a specialty car, Sullivan said.

    “Expect the assets to be sold for pennies on the dollar,” he said.

    About 160 employees, or more than three-quarters of the staff, lost their jobs Friday. They were paid remaining vacation days but did not receive any severance payments.

    “They pulled back another layer as they try to work out a last-minute deal. They need to do a deal quickly, and they know it and are working on it,” said Mike Sullivan, who has a Fisker store among his chain of LACarGuy dealerships in Southern California.

    Fisker dismissed all but a core group of workers needed to keep the business running as it continues talks with the three Chinese businesses considering buying or investing in the company, according to individuals familiar with the negotiations.

    “Our efforts to secure a strategic alliance or partnership are continuing in earnest, but unfortunately we have reached a point where a significant reduction in our workforce has become necessary,” the automaker said in a statement.

    Last month, Fisker hired Kirkland & Ellis, a major bankruptcy law firm, to review the company’s options as it sought investors or a buyer.

    Fisker has been working for months to raise $500 million so it could restart production of the Karma, its only model, which was built in Finland. Fisker stopped making the six-figure plug-in hybrid last year after A123 Systems, the maker of its lithium-ion battery, filed for bankruptcy.

    Fisker is trying to work deals with three different Chinese companies, including Geely Holding Group, which owns Volvo, and Wanxiang Group, which recently bought A123 Systems out of bankruptcy. The other bidder, according to an individual familiar with the negotiations, is a business owned by the Chinese government.

    Regaining access to the Department of Energy loan, which would make Fisker more attractive to potential investors, is the biggest obstacle to a deal, according to people familiar with the negotiations.

    Potential buyers would want to tap into the federal money to restart the business and launch work on a second model, the Atlantic, a $55,000, four-door rechargeable sports sedan. But the government is reluctant to extend more credit without getting guarantees for U.S. employment and setting milestones for the development of the next vehicle.

    Fisker has suffered from constant management turnover, changing chief executives three times in just about a year. Henrik Fisker, the automaker’s executive chairman and founder, quit the automaker last month in what he described as a management dispute.

    Sullivan of AutoPacific said Fisker also struggled with other problems, including trying to launch a new auto nameplate during a recession.

    The fuel economy on the Karma wasn’t as high as Fisker had hoped. Once the car went into production, there were several embarrassing recalls. The bankruptcy of the battery company upended production. The fit and finish of the cars coming out of Finland didn’t measure up to other expensive luxury makes.

    About 300 Karmas at a New Jersey port were flooded and destroyed during Hurricane Sandy.

    The Karma is a plug-in hybrid, not a fully electric car like the Tesla Model S. A pair of 150,000-watt electric motors power the rear wheels. Those motors get their energy from the large 180-killowatt lithium-ion battery, which can power the car on electric-only power for 30 to 50 miles, depending on how the Karma is driven. After the batteries are depleted, a 2.0-liter turbocharged four-cylinder engine, sourced from General Motors, kicks in to recharge them.

    The sports car was designed by Henrik Fisker, who had worked on other high-end cars including the Aston Martin DB9 and V-8 Vantage and the BMW Z8. The four-door Karma cut a dramatic silhouette on the road, with sweeping lines flowing around massive 22-inch wheels, a long hood and a cramped cabin.

    “I am still amazed that they were able to make those vehicles during the darkest time the auto industry has ever seen in this country,” Sullivan said. “It was impressive, but in the end, they are a footnote, and it shows how hard it is to crack into this business.”

  5. hollywoodstein says:

    Romney, like Cheney, Rummy, Rice, Feith, is waiting in the wings. The Mormon Church has 100mill if he even wants to give it a go. He’s not dead politically. After all, he’s a captain of industry, which means he’s rich no matter how he stole it, rubes respect that.

  6. hollywoodstein says:

    Take it from a troll, You are a troll.
    Or stupid.
    You choose.

  7. Pat Bahn says:

    i had a 97 Camry it was nice but it was getting problematic, so I bought a 2010 Insight, which i like a lot.

  8. Pat Bahn says:

    will his civic get 40 MPG in the city? Cab Drivers get amazing city MPG using a Prius.

  9. Pat Bahn says:

    well cranking out 5,000 units for the quarter is good. thats $300M in revenue for the quarter, they may actually be close to profits.

  10. Pat Bahn says:

    didn’t he coach some losing midwestern football team? Couldn’t win despite all sorts of coaching?

  11. perljammer says:

    One swallow doesn’t make a summer.

    Tesla eked out a slight Q1 profit by wheedling advance payments from customers who have not yet received cars. This makes Q1 look pretty good, but doesn’t bode well for subsequent quarters. Here’s the email sent by Tesla in March to customers waiting for their cars to be built:

    “Tesla is right on the cusp of profitability this quarter for the first time in 10 years since the company started. This is a huge company milestone that will not only be great for the company, but also for our customers.

    “In order for Tesla to be able to count your Model S for the quarter, we simply need to receive payment.”

    http://www.businessinsider.com/tesla-urged-buyers-to-pay-for-cars-early-make-it-profitable-2013-4

  12. ComradeRutherford says:

    If the point was that government shouldn’t be making large bets, then why do the Republicans demand that oil companies get $4B in taxpayer welfare every year even while they post insanely huge profits?

  13. ComradeRutherford says:

    “Investing in companies? Absolutely not. That’s the wrong way to go.”

    Because if the USA did such a thing we might be able to compete with China on the world stage. And since the CEO class has decided to turn America into a third-world nation of slaves, nothing that would compete with China can be considered.

    USA has $4B every year to hand to massive oil companies that post hundreds of billions of dollars in profits, but $500M for a solar power company that goes bust is a national disaster.

    Why don’t we have cars that get 100 MPG? Because of ‘conservative’ Republicans.

  14. zorbear says:

    Wasn’t he that guy, you know, who did that thing?

  15. Drew2u says:

    the best replacement I found for my ’99 escort is a. ’00 escort, LOL

  16. Naja pallida says:

    My daily driver is still a 1991 Honda with 200k miles on it, because it gets ~35 mpg in city, and I can do almost all my own maintenance on it, and it has enough space in the hatch for most of my regular work stuff. Plus, I don’t have to worry about parking it at the airport for the long times I’m out of town. It has always started, no matter how long it’s been sitting. And it’s barely worth what it costs to park it, so if it gets stolen or damaged, I’m not really out much. Aside from a really reliable car. But I have a second identical one in the garage, that I’ve been using for parts and such, which wouldn’t take much effort to get back on the road if something happened to the first one.

  17. Naja pallida says:

    One of the reasons. In fairness, Burger King has been the target of vulture after vulture for decades. Bain is just the latest one to pick at their innards. Domino’s is probably a better example. Their product quality plummeted for years, while their company debt skyrocketed, under Bain… but as soon as Bain walked away, they were able to revamp the products and start to rebuild.

  18. Naja pallida says:

    What you see as “large bets”, others see as investment in innovation. What actually was a large bet with tax payer money was bailing out the banks, but not making them actually fix the problems with what they were doing – and letting them continue to do it to this day. What is a gamble with tax payer money, is giving huge subsidies to companies that are poisoning our environment and our food. The amount of money loaned to Tesla was a pittance compared to what we literally flush down the shitter every single day.

  19. Economist, Game Theorist says:

    Calm down! The point was that government shouldn’t be making large bets with taxpayer’s money during a debt crisis. Your obvious biases are unfortune. Your rigor for critical thinking… lacking. I’m unaffiated politically (don’t see myself aligned with crazies on either side), but comments like these look desperate! How’s the Economy? Sorry to provide the only criticism.

  20. Wayne Peterson says:

    Romney can write off 47% of US auto manufacturers……

  21. Oh, I know it well. My best friend in town (and ex, but that’s neither here nor there :p) is still driving an early ’90s Civic that gets about 40 mpg highway. That’s partly why I refuse to be impressed by hybrids: their mileage isn’t really all that impressive and they’re an order of magnitude more costly to maintain.

  22. Drew2u says:

    You know how difficult it is to find a new used-car that gets as good of fuel economy as my 99 escort? Everything newer has worse mileage than my car unless I want to pay out-the-nose.

  23. Drew2u says:

    is is that why Burger King got really bad the past decade?

  24. Drew2u says:

    the crow, however, will always be caught in his grille
    .

  25. BeccaM says:

    Bingo. There’s a huge difference between someone who puts money into a company hoping to see it grow, flourish, and prosper, and someone who uses leveraged buyouts solely to plunder and loot previously viable businesses.

    Any company that has managed to survive Bain Capital’s tender mercies has done so despite the vulture capitalists’ rampant looting.

  26. BeccaM says:

    On the other hand, he wouldn’t have to worry about hosing dog poop off the roof.

  27. Naja pallida says:

    The plan all along was for the first car to be a ‘novelty’ and rather expensive, to drum up enthusiasm and cash sales, so that they could then afford to create something more sensible. The Model S is a four door sedan, and the Model X is a crossover-style SUV. Still rather expensive, but a lot more real-world usable than a two-seater roadster.

  28. SkippyFlipjack says:

    Romney’s out of the picture. Bashing him is kind of an involuntary reflex now. I’d be more interested in which Republicans who are actually, like, still in politics criticized the investment in Tesla, because there have been a lot of them.

    SOLYNDRA! SOLYNDRA! SOLYNDRA!

  29. I’m rather glad to see Tesla Motors achieving some success although I think their product is a futile novelty. (Rather like supercars in general, only with the extra gimmick of being electric.)

  30. Naja pallida says:

    It’s a tried and true strategy that has made Romney, and other Bane board members, very wealthy men. While it has also put thousands upon thousands of people out of work, and emptied their retirement funds. Even current Bane investments that they didn’t outright destroy, like Burger King and Toys R Us, are struggling to stay afloat and compete, while essentially wearing a weighted vest with a Bain Capital logo embroidered on it.

  31. freewayblogger says:

    My brother has a Tesla and it is FAST. Romney obviously didn’t like his because he kept losing dogs.

  32. emjayay says:

    Cut down maintenence and R & D, throw out management, load up on debt, suck out millions in fees, sell it when the balance sheet looks good, hide your money in the Cayman Islands, then who cares if it goes bankrupt later.

  33. Naja pallida says:

    The problem there is, Romney may ostensibly be a venture capitalist, but he doesn’t really seem to understand how venture capital works, because he’s actually a vulture capitalist. He simply doesn’t understand investing in a company to give it a chance to be better, because his career has been built around either safe bets, or corporate raiding and pillaging. Most of the times Bane has tried real venture capitalism they’ve failed because they simply don’t know how to do anything but destroy companies for profit.

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