A123 Systems declared bankruptcy this week despite receiving $249 million in stimulus funding, and a lawmaker responsible for overseeing the Energy Department’s decisions to subsidies green companies fears the damage could get worse.
“A123’s bankruptcy is a sign that the Obama administration’s green house of cards is starting to collapse,” said House Oversight and Investigations Subcommittee Chairman Cliff Stearns, R-Fla., in a statement to The Washington Examiner. “These projects are intertwined, and taxpayers find themselves at the end of the line for far too many green gambles,” Stearns warned.
Stearns was referring to two other green tech companies which he said received taxpayer subsidies and depend on A123. Fisker Automotive received a $529 million DOE loan guarantee (only $193 million was disbursed to the company) and uses A123-produced batteries for its $102,000 electric sports car, the Karma. Stearns also said that AES Energy Storage received another $17.1 million in taxpayer support for a 20 megawatt energy storage system that also relies on A123.
Update: AES contradicted Stearns’ statement. “While AES Energy Storage did successfully pursue a $17.1 million loan guarantee from the Department of Energy for our deployment of commercial ready energy storage technology, no money was borrowed,” said vice president John Zahurancik in a statement to The Washington Examiner. ” The company cancelled the loan guarantee before it was funded and never accepted any money from this program. In fact, AES Energy Storage has never received any government funding for any of its projects.”
Zahurancik also said that AES Energy Storage is not relying on A123 to supply batteries for any future projects.
Fisker says that A123′s bankruptcy isn’t a problem because the battery company sold its automotive assets to Johnson Controls Incorporated.
“Fisker welcomes the prospect of JCI, a recognized and strong Tier One supplier with which we already have a relationship, acquiring A123′s automotive operations in order to continue production of the battery pack that we currently use on the Karma to supplement our existing inventory, which is expected to cover our needs through at least the first quarter 2013,” spokesman Roger Ormisher told Investor’s Business Daily.
IBD quoted an analyst noting that A123 isn’t the only problem taxpayers have in the electric car battery market. “Taxpayers allowed the U.S. government to fund the building of two fairly good-size lithium ion battery companies,” Theodore O’Neill said in June, four months before the bankruptcy. “What we’ve got is one of them went bankrupt (Ener1). The other’s (A123) stock is down 96% from the peak and who knows how much longer they’ve got?”
Correction: This story misstated the type of AES Energy Storage project that A123 had supported.