California start-up Fisker Automotive has received a $529 million loan from the U.S. to try to build a hybrid sports car in Finland.
$529 million of your money. To build a sports car. In Finland.
News of the Fisker loan comes amid questions about the controversial $465 million taxpayer loan to Tesla at a time when the Silicon Valley-based electric car start-up has already raised over $200 million in private venture capital from prestigious VC's like Draper Fisher Jurvetson, cash-rich companies like Google (NASDAQ: GOOG), and the likes of JPMorgan Chase (NYSE: JPM).
"This is not for average Americans," Leslie Paige, a spokeswoman for Citizens Against Government Waste, told The Wall Street Journal (subscription required) last week. "This is for people to put something in their driveway that is a conversation piece. It's status-symbol thing."
Of course, there's no evidence of corruption or self-dealing in this matter. By all accounts, the money was doled out fairly. And in Fisker's defense, it says that most of the money will be used to finance the production of a $40,000 sedan that hasn't been designed yet.
But still -- huh? Why did we just give a start-up $529 million to build something that they haven't designed yet? Can I have $529 million for the AIDS cure I haven't discovered yet?
It's all very confusing. Still, Fisker did announce last week that it expects to report a profit in 2011, when it estimates it will sell 15,000 units of its Karma car -- a luxury sedan that will cost $87,900.
Of course, to butcher a line from the Roman poet Catullus, the forward-looking predictions of profitability from CEOs of starts-ups should be written in the wind and running water.
