The Department of Energy's clean energy loan program helped fuel the achievements of electric car company Tesla Motors, yet the major broadcast, cable and print media only mentioned the loan in 20 percent of their coverage of Tesla in 2013 (and in only 7 percent of coverage of Nissan's best-selling electric car, the Leaf). Meanwhile, 84 percent of coverage of Fisker, an electric car company that declared bankruptcy, mentioned its federal loan. This skewed coverage may have misinformed the public about the overwhelmingly positive success rate of the program.
DOE Clean Energy Loan Program Has A Higher Success Rate Than Venture Capitalists
After Hiatus, DOE Reviving Advanced Vehicles Loan Program. The U.S. Department of Energy (DOE) announced on April 2, 2014 that it would revamp and improve its Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, one of of the agency's loan programs for low-carbon technologies. The DOE will be offering new loans for the first time in years, using its remaining $16 billion in budgetary authority from a law signed by George W. Bush. [AutoBlogGreen, 4/2/14]
ATVM Program Part Of Overwhelmingly Successful Clean Energy Loan Program. The ATVM is a subset of the DOE's low-carbon loan programs, which were authorized in 2005 and 2007 with bipartisan Congressional support. The loan programs have been overwhelmingly effective. According to testimony by the Executive Director of the program, 98 percent of funds went to companies that have not defaulted on their loans, despite a few high-profile defaults from companies such as the bankrupt solar company Solyndra. [National Journal, 4/2/13; Senate testimony by Peter Davidson, 7/18/13]
DOE Loan Programs Have Higher Success Rate Than Venture Capitalists. Richard Stuebi, venture capitalist advisor and President of NextWave Energy, asserted that typically “3 in 10 successes represents a successful [venture capital] investment strategy,” as reported by CleanTechnica. Only four loans in the DOE program had to be discontinued of 31 total ventures, or a success rate of 87 percent. [CleanTechnica, 10/21/11; U.S. Department of Energy Loan Programs Office, accessed 4/8/14]
Advanced Vehicles Loan Program Supported Successful Tesla, Nissan Leaf. Tesla Motors' $465 million loan from the DOE allowed it to reopen a shuttered auto manufacturing plant in California to produce its cars, which have won several awards, recently receiving the highest score from Consumer Reports has ever issued for best overall vehicle. The company turned a profit in 2013, allowing it to repay its loan nearly 10 years earlier than required. The program also supported the first advanced battery packs to be produced in the United States, which are powering the all-electric Nissan Leaf. The Nissan Leaf was the best-selling electric car in the first quarter of 2014. [Energy.gov, 9/17/13; CNBC, 2/25/14; CNN Money, 5/22/14; EV Obsession, March 2014]
Fisker Represented Just A Fraction Of Amount Budget For Anticipated Losses. The DOE detailed how, even though it froze Fisker Automotive's loan when the company could not pay back its support, the losses due to Fisker were just a fraction of the anticipated losses in the investment portfolio:
Early on, Fisker Automotive looked very promising -- raising more than $1.2 billion from leading private sector investors who believed in the company and its business plan, and also attracting strong support from both Republicans and Democrats.
All our loan agreements include strong safeguards that allow us to protect taxpayers when a company can't meet its obligations. Accordingly, the Department stopped disbursements to Fisker in June 2011 after the company fell short of the rigorous milestones that we had established as conditions of the loan. As a result, while our original loan commitment was for $528 million, only $192 million was actually disbursed. In addition, the Department has already recouped more than $28 million from the company's accounts.
These actions combined have already protected more than two-thirds of our original loan commitment, and we will continue to work through the auction process to maximize whatever additional recovery is possible. While this result is not what anyone hoped, the $192 million disbursed to Fisker represents approximately 2 percent of our advanced vehicle loans, and barely one half of 1 percent of our overall loan program portfolio. [Energy.gov, 9/17/13]
Even if DOE had not recovered any of its assets from Fisker's loan (it recovered over a third), it would have made up only 2.6 percent of the $7.5 billion set aside to cover losses:
[Media Matters, 4/8/13]
But Mainstream Media Overwhelmingly Covered Program In Context Of Failure
Media Mentioned Loan Program Often When Discussing Failed Fisker, Rarely When Covering Successful Tesla And Nissan Leaf. A Media Matters study of 2013 coverage in the major print and TV outlets found that the media mentioned the DOE loan program while reporting on Fisker 84 percent of the time, but only mentioned the loan while reporting on Tesla 20 percent of the time (and Nissan only 7 percent):
Previous Analysis Found Extensive Coverage Of Solyndra's Failure. A previous Media Matters study found that every major news outlet devoted much more coverage to the bankruptcy filing of solar company Solyndra, which received funding under a related DOE loan program, than to two other stories on massive waste and corruption. [Media Matters, 9/28/11]
Fox News Cherry-Picked 3 Percent Failure To Attack Loan Program
Fox News Focused On Failed Companies. According to our Nexis search, Fox News covered Fisker far more often than Tesla -- an anomaly among media outlets -- and mentioned its DOE loan a majority of the time. Fox News and MSNBC daytime shows are not included in Nexis.
In covering Fisker, Fox News often used the company's struggles to criticize the entire DOE loan program. On Fox News' America Live, Fox Business' Lou Dobbs cited Fisker as a reason that “we have got to get this government, and this administration, out of picking winners and losers, because all they pick are losers.” The network also invented statistics for the DOE's loan program failures, claiming that “56% Of Carmakers Who Got Federal Help Fizzled,” while that figure actually applies to the number of carmakers that applied for a loan -- most of which were denied. [America Live, 4/8/13, via Media Matters; Fox & Friends Saturday, 6/8/13, via Media Matters]
In Daytime Shows, Fox News Stopped Mentioning Tesla's DOE Loan When It Became Successful. In 2012, Fox News declared that Tesla Motors had “failed.” But when Tesla first announced that it turned over a profit in the beginning of 2013, Fox trumpeted the company as a “success story” and a “winner.” The network continued to trumpet Tesla's success throughout 2013 on its daytime shows (which were not included in our study) often without mentioning its federal loan. [Media Matters, 4/9/13; Media Matters, 5/16/13]
Fox News Has Already Attacked ATVM Revival By Distorting The Government's Success Rate. While discussing the DOE's loan programs on The O'Reilly Factor, Fox News host Eric Bolling reversed the success rate of the programs, claiming that “for every Tesla, there's four Solyndras.” Bolling later criticized the revival of the ATVM program, asserting that “the government screws everything up and should let the free market decide.” [Fox News, The O'Reilly Factor, 4/1/14; Fox Business, Cashin' In, 4/6/14]
METHODOLOGY: We searched Nexis for Fisker or Tesla or Nissan w/3 leaf from January 1, 2013 to December 31, 2013, for print outlets Associated Press, Los Angeles Times, The New York Times, The Washington Post, and USA TODAY; cable outlets CNN, Fox News, and MSNBC; and broadcast outlets ABC, CBS, and NBC; and searched Factiva for Reuters and The Wall Street Journal. Fox News and MSNBC daytime shows are not included in Nexis.
We included only articles and segments that gave at least a significant mention (a paragraph or more) to either of the three vehicle makers, and excluded letters to the editor.
Max Greenberg and Media Matters intern Gabriel Marcus contributed to this report.