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Grassley, Thune: Energy Department's electric car loan caters to the 1 percent

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The Hill -- Two Republican senators are bashing the Energy Department for using taxpayer funds to support production of a luxury electric car that costs six figures.

Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) are the latest GOP lawmakers to raise questions about federal support for Fisker Automotive.

The company in 2010 won approval for up to $529 million in Energy Department (DOE) loans for two projects.

The smaller portion, $169 million, supported U.S. engineering and design work for the roughly $100,000 Fisker Karma, which is manufactured in Finland.

In a letter to Energy Secretary Steven Chu released Monday, the senators question whether a 2007 energy law that created the loan program for advanced vehicle manufacturing should support such a pricey ride.“The statute which created the [Advanced Technology Vehicles Manufacturing (ATVM)] program did not specify a retail price range for vehicles that are financed by federal dollars, but it would seem questionable how financing $100,000 luxury class automobiles would be the best use of taxpayer money,” the senators write in the letter, which is available here.

The second, larger portion of the funding was to support a project to build a separate and less costly plug-in vehicle, now called the Atlantic, at a former GM plant in Delaware, a plan slated to employ 2,500 people.

That car will retail for around $50,000, but the Delaware project has been delayed and faces uncertainties, and the company has not drawn all of the funding.

The company must meet more “milestones” to draw more of the money, according to DOE. The company has drawn $193 million of the DOE loan funding thus far, according to press reports.

The Grassley-Thune letter to Chu questions the portion of the funding that supported the overseas manufacture of the Karma model, even though the money was used for U.S.-based work. ...continues...

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