Revisiting the Half billion dollar loan Al Gore's car company got to build cars in Finland

Remember this from 2009? Loans rejected by private lenders? Why is the federal government think that it can do a better job of figuring out where the best investments are? Why subsidize cars for the wealth? Why subsidize production in Finland and Britain? Giving money that no private lender would lend to a well connected Democrat? Shades of Solyndra? These just makes it seem as if this stimulus was just a way of funneling money to Democrats. From the WSJ:

A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.

The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California startup focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.

The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.

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

So how has it worked out?

Jim Cramer has this new discussion:

Cramer is bearish on Tesla Motors (TSLA), and he suggests selling if you own it. The California-based Tesla has a P/E ratio of -11.2, and a forward P/E ratio of -13.2, as of the September 12 close. Five-year annualized EPS growth forecast is 20.0%. Tesla pays no dividend yield. . . .

"Avoid the Stock"

The above link shows that this investment just makes no sense.

Something from the beginning of the year:

Tesla Motors is attempting to rapidly expand into the mainstream electric car market but we have concerns with its dependence on lithium. Lithium is believed to have the second smallest accessible metal supply in the world, which stands right above the “rare earth metals” category. Should Tesla be highly successful and sell thousands of its new Model S in conjunction with other large scale electric car competitors there is a real probability that the price of lithium batteries could sky rocket. Given that this is the most expensive part of an electric car this could destroy a profit margin that Tesla doesn’t even have yet. . . .

It’s unbelievable how competition has come out of the woodwork for the electric car space with big names like Ford (F), Toyota (TM), Nissan (NSANY.PK), and more in the line up. . . . If Toyota or other major names find the space unprofitable they can leave it and survive but this isn’t the case for Tesla Motors. Further, big auto names can afford to hang out in this space longer and may even attempt to financially bleed out Tesla Motors. The only hope Tesla Motors has in surviving currently against competition is to start running circles around them in terms of sales numbers. Otherwise it may get squashed like a fly if it stops to take a breather. . . .

Fisker is a privately held company so I can find this type of details on that investment.