By Keith Laing - 10/21/11 03:31 PM EDT
A $529 million federal loan guarantee to an electric car company manufacturing automobiles in Finland is drawing more unwanted attention to Energy Department loans.
A report by ABC News on Thursday said Fisker, a startup electric car company, is making cars in Finland after receiving the loan because it could not find a contractor in America to actually manufacture its electric vehicles.
The company and the Energy Department have emphasized that the federal funds are being spent in the U.S. on design and other work.
Still, the news that Fisker is using a portion of the loan guarantee to design cars that are being manufactured in Finland is sure to fire up critics of the loan program already angered over a $535 million loan guarantee to Solyndra, a California solar firm that went bankrupt despite the loan.
Republicans have been hammering the White House over the Solyndra loan, and even before ABC published its story Thursday evening, conservative websites were hinting that a Solyndra-like story was coming.
The Energy Department blog post also defended the administration’s investment in auto manufacturers more broadly, something President Obama has highlighted in recent weeks.
It said the federal loans were helping the U.S. auto industry reinvent itself.
“Two years ago, critics said we shouldn't be investing in American auto manufacturing because the industry wouldn't survive,” the Energy blog post said. “They were wrong then and they're wrong today. From well-established names like Ford to innovative startups like Tesla and Fisker, America's auto industry is being reinvented, and the department’s loan program is helping play an important role.”
Tesla is another firm making electric cars, and has also won federal loan guarantees.
The ABC report noted that Fisker’s backers include former Vice President Al Gore, while investors in Tesla, which has also benefited from federal loan guarantees, include the co-founders of Google.
ABC reported that Tesla’s SEC reports show the company has lost money in every quarter, while Fisker has only delivered two of its Karma electric cars, one of which went to Leonardo DiCaprio.
The network’s report suggested these findings indicate the companies might have trouble repaying the federal loans, but officials with both companies told ABC that comparisons to Solyndra were unfounded and that government investments would be paid off.