Electric Car Cos. Clean Up on Gov. Loans

A second California electric car company, this one backed by former Vice President Al Gore, has landed big money from the federal government.

The Wall Street Journal reports that Fisker Automotive, which counts Gore among its investors, has received a loan of $529 million to build hybrid sports cars in Finland that will sell for $89,000 in the U.S. Tesla Motors, the maker of a $109,000 electric sports car, recently received $465 million.

The loans for Fisker come from a $25 billion Department of Energy program designed to seed companies with money to create the car of tomorrow.

All this government largesse for companies building cars for the elite has raised questions for some.

"This is not for average Americans," Leslie Paige, a spokeswoman for Citizens Against Government Waste, an anti-tax group in Washington, told the Journal. "This is for people to put something in their driveway that is a conversation piece. It's status symbol thing."

But both Fisker and Tesla have said they are building high-end cars now, but that’s the way innovation usually starts—at the high end of the market. Both companies are experimenting with new technologies meant to make electric cars a reality, and prices in the market will come down as those technologies advance.

Matt Rogers, overseer of the government’s loan program, said as much to the Wall Street Journal, arguing that Fisker could deliver a highly-efficient hybrid to the masses. Most of the money from the loan will be used to help the car company finance U.S. production of an $87,900 sedan. But Fisker also plans to use loan money to develop a $47,900 user friendly plug-in hybrid.

Fisker hopes to sell 75,000 to 100,000 cars per year beginning in 2012, the Los Angles Times reports.

"This conditional loan represents a significant step in America's future," said Henrik Fisker, the automaker's chief executive, saying it would "help restore the U.S. as an auto industry leader."