Fox News Attacks US Loans to Fisker and Tesla

According to Fox News, the US Department of Energy threw away nearly $1 billion in loans to Fisker Automotive and Tesla Motors—two Calif.-based auto startups trying to produce the next generation of American-made energy-efficient cars. On several of its shows, including America's Newsroom and Your World, Fox News criticized the loans because Fisker and Tesla currently produce expensive cars that are made in Europe.

Moreover, Fox insinuated that Fisker received the DOE loan because of its connection with former vice-president and global warming activist Al Gore. America's Newsroom co-host Martha MacCallum said: "Listen to this. The US government is making a $529 million loan to a small car company that happens to be backed by former Vice President Al Gore. Get this. It's called the Karma. It's a hybrid. It's built by Fisker Automotive. The price tag for this greenmobile is about $89,000."

During the segment, on-screen text read, "Americans Fund Car Co That Will Create Jobs...In Finland.”

Fox News contributor Stephen Moore stated, "I think most of the people watching this show, I think, would question the wisdom of the Department of Energy giving out these grants in the first place. But I think the vast, vast majority of Americans would say, at least if we do it, find an American company that's going to employ American workers to do this."

While the all-electric Tesla Roadster is currently being built in England, and components of the Fisker Karma plug-in hybrid are made in Finland, Fox neglected to fully explain that the loans will be used to establish US manufacturing facilities for more affordable future models.

The DOE loan will support Fisker engineering work to be conducted at the company's Pontiac, Mich. office, with support from its Irvine, Calif. headquarters. Fisker estimates that it will produce 75,000 to 100,000 of a more affordable plug-in hybrid—about $45,000—every year beginning in late 2012. DOE officials said they spent months working with Fisker on its application, touring its Irvine and Pontiac facilities and test-driving prototypes.

Tesla received a $465 million government loan to support production of its Model S—expected to sell for around $55,000. Production is scheduled to begin in 2011 and ramp up to 20,000 vehicles per year by the end of 2013. The new manufacturing facility is expected to create 1,000 jobs in Southern California. The rest of the loan will support a new facility to manufacture battery packs and electric drivetrains, employing about 650 people in Northern California."

Your World host Neil Cavuto acknowledged, “Some of that cash will go toward building cars here, but that is years down the road."

Fisker's top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm of which Gore is a partner. Employees of KPCB have donated more than $2.2 million to political campaigns, mostly for Democrats, including President Barack Obama and Hillary Clinton, according to the Center for Responsive Politics.

Congress established the $25 billion alternative vehicle loan program during former President George Bush’s administration in 2007 to provide incentives for automakers to invest in green technology. The DOE has awarded $8 billion to Ford and Nissan. The low-cost loans will carry a discounted interest rate of about 5 percent. Automakers have up to 25 years to repay the money.