Tesla Motors Inc. is paying back its government loan of $465 million in full, and nine years early. This is being billed as “a huge boost for the Obama administration and clean energy firms.” Actually it isn’t.
It is customary to pay back loans in full, so that is hardly a news item, and early repayment, though laudable, is not a clean-energy breakthrough. “I hope we did you proud,” said Tesla CEO Elon Musk, who certainly did himself proud by plunking down $17 million for a 20,248-square-foot Bel-Air mansion with a gym, seven bedrooms, 10 bathrooms, tennis court, motor court and a swimming pool. His company makes the Model S, a luxury vehicle selling for $70,000, more than most Americans can afford. Britain’s “Top Gear” found the Tesla car “an astonishing technical achievement” but lamented that “it’s a shame that in the real world it doesn’t seem to work.” The car ran far less between charges than Elon Musk claimed. So even with the loan payoff Tesla hardly represents a breakthrough for the masses, the environment, or the Obama administration.
The real news on the clean-energy front is the number of stimulus recipients who have gone bankrupt. In 2009 Flabeg Solar U.S. Corp. got $10 million in stimulus funds and another $9 million in job creation money. By April 2013 Flabeg had shut down its plant, laid off workers and will likely seek Chapter 11 bankruptcy protection from workers suing over severance pay. Flabeg is hardly alone.
Solyndra got $535 million in federal loan guarantees but went bankrupt in 2011. Stimulus recipients Evergreen Solar and SpectraWatt, both in the alternative energy business, also went bankrupt. And of course, Fisker Automotive Inc, is heading south despite $529 in federal loans to produce luxury cars built in Finland and selling for nearly $100,000. Tesla did better and paid back its loan but on balance the $800 billion American Reinvestment and Recovery Act, also known as the stimulus, remains more of a bust than a boost.