The Biden-Harris administration announced a multi-billion dollar loan for electric vehicle (EV) maker Rivian Monday as the company continues to hemorrhage cash.
Rivian lost $1.1 billion and saw its revenue fall nearly $500 million in the third quarter of 2024 as a slackening of consumer demand for EVs hampered the industry’s growth. Now, the U.S. Department of Energy (DOE) has agreed to a conditional commitment to loan the automaker roughly $6.6 billion to help finance the construction of its manufacturing facility in Georgia, according to a press release from the DOE’s Loan Programs Office (LPO). (RELATED: Auto Giants Scrambling To Slash Costs As Massive Bet On EVs, Self-Driving Fizzles)
“This loan will help create thousands of new American jobs and further strengthen U.S. leadership in EV manufacturing and technology,” RJ Scaringe, Rivian founder and CEO, wrote in a press release Monday. “A robust ecosystem of U.S. companies developing and manufacturing EVs is critical for the U.S. to maintain its long-term leadership in transportation.”
Big news for Rivian: a conditional $6.6 billion DOE loan could supercharge production of the R2 and R3 at a new Georgia plant, creating thousands of jobs. Learn more about what this means for Rivian: https://t.co/KJ8NGlZL0f pic.twitter.com/EVjvRHIYAw
— RivianTrackr (@RivianTrackr) November 26, 2024
The Georgia factory will augment Rivian’s factory in Normal, Illinois, and will produce sport utility vehicles that sell for roughly $45,000, significantly less than the company’s current fleet of consumer vehicles which start at around $70,000.
“This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize both capability and affordability,” Scaringe said in the release.
The financing agreement is part of outgoing President Joe Biden’s Investing in America agenda, which has deployed nearly $700 billion in taxpayer dollars to infrastructure, semiconductor and green energy projects. Many of the White House subsidies have gone to the EV industry specifically, including a $7,500 federal tax credit for certain EV purchases and $12 billion in taxpayer funds for car manufacturers to retrofit their plants for EV production.
Despite the subsidies, the EV industry has seen a slackening of consumer demand, with sales growing just 31% in the first half of 2024 — far less than the 71% increase in the first half of 2022. Meanwhile, a June poll from The Associated Press-NORC Center for Public Affairs Research and the University of Chicago’s Energy Policy Institute found 46% of respondents were unlikely or very unlikely to purchase an EV compared with just 21% of respondents who said they were “very” or “extremely” likely to make the change.
“Even after throwing money at EVs hand over fist, basically paying people tax dollars to drive these cars off the lots, you have a dire spiral of (1) not enough demand to support the number of cars being produced, and (2) the people you paid to buy them now wanting to go back to what they had before,” O.H. Skinner, executive director of the Alliance for Consumers and the former solicitor general of Arizona, previously told the DCNF.
Rivian and the DOE did not immediately respond to the Daily Caller News Foundation’s requests for comment.
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