U.S. gives $529 million to build car with worse gas mileage than SUV

The story of the Fisker Karma is the perfect picture of why politicians and bureaucrats shouldn’t pretend to be venture capitalists. They don’t know what they’re doing, so they make all the wrong decisions. Why should they care, though? It’s not their money.

You might have heard about the U.S. government giving a $529 million loan guarantee to a car company headed by Henrik Fisker, a well-connected Democratic Party donor. Al Gore is a partner at the venture capital firm that’s backing Fisker in building a luxury electric vehicle.

Well, it turns out that Fisker isn’t building those cars in the United States. He’s building them in Finland, so U.S. taxpayers are subsidizing the jobs of Finnish autoworkers. And, yes, the Obama administration signed off on the deal about where to build the cars.

So let’s assume we can ignore the fact that the cars are being built overseas but financed by U.S. taxpayers. At least it will be an environmentally sound car to drive, right? Well, not really.

In a scathing article for Forbes, Warren Meyer explains why this “green” car is a sham. You see, its electric engine has a range of only 32 miles, according to the EPA test procedures. After 32 miles, you switch to its gasoline engine, which gets 20 miles per gallon. You can walk into any car showroom and get better gas mileage than that — with no taxpayer funding subsidy.

We’re not finished with its problems, though. You might that think the car at least does well on energy use when it’s running on electric power, but that’s not true, either. Although the EPA rates it at 52 MPGe (which they claim is the equivalent of MPG for electric vehicles), the Forbes article shows that by realistic calculations — not the ones designed to make an electric vehicle look good — the Karma get the equivalent of 19 miles per gallon on its electric engine. (The article explains why there’s controversy over the testing standards.)

Since the base model costs only $95,900, it’s a great bargain, huh? You can also pay $109 850 for the top-of-the-line model, but that would pay for a cheap house in many places.

So who is this turkey for? It doesn’t generate U.S. manufacturing jobs. It doesn’t save energy. It’s a risky company on which taxpayers seem likely to lose half a billion dollars. There must be a pony in here somewhere. Right? Actually, it’s closer to a pig in a poke than a pony.

My guess is that there’s only one reason this turkey — or pig — is being built. It’s for rich celebrities who want to flaunt their “green” credentials, but don’t want to be stuck in a cheap Prius econobox anymore. So when you see some Hollywood star rolling at someplace talking about how he’s saving the environment, remember what it’s really all about. It’s all about his ego and comfort — and our tax money.