The U.S. Energy Department will auction off Fisker Automotive Inc.’s unpaid loan balance to cut its losses after concluding there’s no prospect of finding a buyer for the dormant plug-in electric carmaker’s assets.
The agency, which disbursed $192 million to Fisker before cutting off funding in June 2011, said today in a blog post that it will require bidders to make a commitment to doing design and engineering work in the U.S.
“After exhausting any realistic possibility for a sale that might have protected our entire investment, the department announced today that we are auctioning the remainder of Fisker’s loan obligation, offering the best possible recovery for the taxpayer,” Peter Davidson, executive director of the agency’s loan program office, said in the post.
Fisker, based in Anaheim, California, has about $168 million remaining on its loan after the Energy Department recouped about $28 million from the company’s accounts after it missed its first payment.
The auction will be held Oct. 11 with initial bids due Oct. 7, according to a posting on a government sales website. The posting notes “the loan is not presently performing.”
The Energy Department last month reopened the vehicle loan program for business with about 60 percent of the program’s $25 billion remaining. Created by President George W. Bush, this and other Energy Department loan programs were criticized by Republican lawmakers following the failure of solar-panel maker Solyndra LLC.
“Not every investment and every company can succeed in such a competitive environment,” Davidson wrote.
The department stopped loan disbursements to Fisker after the company missed production milestones for its first model, the $103,000 Karma. Most of the initial $529 million loan commitment was to finance development of a second model at a former General Motors plant in Delaware. It was never produced.
Fisker’s car production ceased last year after its battery supplier, then known as A123 Systems Inc., declared bankruptcy. Most of Fisker’s unsold vehicles were destroyed by flooding during Superstorm Sandy.
Fisker was one of five companies to receive loans under the Advanced Technology Vehicles Manufacturing program. Tesla Motors Corp. in May repaid its $465 million loan in full nine years early, and Nissan Motor Co. and Ford Motor Co. (F:US), which got the largest loans in the program, are making regular payments.
The fifth company, wheelchair van maker Vehicle Production Group, ceased operations earlier this year without making a payment on its $50 million loan.
The loan program has advanced President Barack Obama’s goal of having 1 million electric vehicles on the road by 2015.
Through August, sales of plug-in electric vehicles in the U.S. rose to 58,000, according to data compiled by Bloomberg. That compares with about 50,000 sold in all of 2012.
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