Rivian's $6.6 Billion Loan: Biden Admin's Woke Gamble with Taxpayer Money
Rivian secures a $6.6B loan from the U.S. Dept. of Energy despite a cash burn rate >$1B per quarter...
In yet another questionable (some might say braindead) move, Joe Biden a.k.a. the “Biden Administration” & U.S. Department of Energy (DOE) granted a $6.6 billion loan to Rivian Automotive.
This is yet another Biden Admin move that combines: “woke” (Justice40 initiative) with indirect shots at Elon – given that Tesla’s ROI would be higher with any gov loan.
The Biden Administration likely views this loan as a chance to subsidize things they love: (1) woke (“disadvantaged workers” via gov $); (2) a U.S. EV company on life-support; (3) U.S. auto/EV jobs (in a key battleground state for Dems); and (4) competition for Tesla/Elon (the Dem regime has Elon Derangement Syndrome).
But the main reason giving this loan to Rivian is moronic has to do with the fact that Rivian is far from profitable and has been burning cash at an accelerated rate (currently >$1B per quarter) and the U.S. already has plenty of EV & EV-hybrid auto-makers.
This loan amounts to >60% of Rivian’s market cap and the company is known for having a horrendous financial and operational track-record – such that if they end up defunct, there won’t be any repayment (*gov money appears*, *poof*, *gov money gone*).
Vivek Ramaswamy ripped the loan on X by suggesting that it smelled like “a political shot across the bow” at Elon & Tesla, questioning its cost-efficiency (~$880k per job created).
Rivian Automotive: $6.6B Loan from the U.S. Gov D.O.E. & Biden Administration
Included below is a breakdown of the Rivian loan announcement courtesy of the U.S. Dept. of Energy.
Rivian plans to leverage loan to enhance its manufacturing capacity and solidify its competitive position in the EV market.
Expansion aligns with broader U.S. goals of EV leadership and reduced fossil fuel dependency.
Loan Overview
Amount: Up to $6.57 billion (includes $5.975 billion in principal and $592 million in capitalized interest)
Source: Department of Energy (DOE) Loan Programs Office (LPO)
Program: Advanced Technology Vehicles Manufacturing (ATVM) Loan Program
Conditional Approval Date: November 25, 2024
Project Horizon
Location: Stanton Springs North, near Social Circle, Georgia
Facility Size: 9 million square feet
Capacity: 400,000 electric SUVs and crossover vehicles annually (in two phases of 200,000 units each)
Production Start: Phase 1 projected for 2028
Models Produced: All-electric midsize platform (MSP) R2 and R3
Economic Impact (Est.)
Construction Jobs: Up to 2,000 full-time
Operational Jobs: 7,500 by 2030
Fuel Savings: ~146 million gallons of petroleum annually
Goals & Strategic Impact
Supports the Biden-Harris Administration’s goal of 50% zero-emission vehicle sales by 2030
Reinforces Rivian’s ability to scale production and compete internationally
Accelerates EV manufacturing to make EVs cost-competitive with gas-powered vehicles
Woke Policy
Community Benefits Plan: 25% of employees to be hired from local communities
Justice40 Initiative: 40% of benefits directed to disadvantaged communities
Workforce Training: Collaboration with Georgia QuickStart program and local technical colleges
Financial & Operational Context
Rivian's Financial Position: $7.85 billion in cash and equivalents as of Q3 2024
Other Funding Wins: Expanded partnership with Volkswagen, with an increased investment to $5.8 billion
Production Strategy: R2 and R3 production begins at the Normal, Illinois, facility in 2026. Georgia facility to scale production volumes for cost-competitive global sales
Why the $6.6 Billion Loan to Rivian is a Woke Ideological Gamble
The $6.6B loan to Rivian Auto deserves any criticism it gets… it’s an irresponsible gamble with tax dollars.
Listed below are some of the major reasons I think the loan was stupid, but I genuinely hope that Rivian has success in the future (why would I want money to be wasted?).
As a sidebar, I also happen to think Rivian EVs are cool, but they are far from a “working-class” affordable vehicle for most Americans.
1. Injecting Cash into a Financially Unstable Company
My main concern with the loan has to do with Rivian’s poor financial performance.
Cash Burn: Rivian is hemorraging over $1 billion per quarter, with negative gross margins of -41.1%. The company loses approximately $39,000 per vehicle sold, far exceeding revenue generated.
Sustainability Concerns: Despite having $7.85 billion in cash reserves (as of Q3 2024), Rivian’s accelerating losses indicate a high likelihood of financial insolvency without continuous external funding.
Misallocation of Funds: Allocating $6.6 billion—more than half Rivian's market capitalization (~$10 billion)—to such a financially unstable company is reckless and a poor use of taxpayer money.
This decision risks public funds to support a company with no clear path to profitability.
2. Prioritizing Equity Over Efficiency (Justice40)
The loan incorporates Biden’s Justice40 Initiative, which mandates that 40% of benefits flow to “disadvantaged communities” (not sure how this is defined).
I’m against anything that prioritizes “equity” over merit, pragmatism, and efficiency - especially with hard-earned tax dollars flowing to a company with a shaky financial track-record.
Misaligned Priorities: Instead of funding projects with the highest ROI or operational feasibility, resources are diverted based on social outcomes like workforce diversity quotas.
Reduced Efficiency: Justice40 shifts focus away from measurable business performance, often leading to waste and inefficiencies.
Ideological Redistribution: This framework discriminates against non-disadvantaged communities, favoring systemic redistribution over meritocracy. It’s social engineering at the taxpayer’s expense.
3. Environmental Goals via Ideology
The loan aligns with the Biden Administration’s push for 50% zero-emission vehicle sales by 2030, central to its climate change initiatives.
I’m all for advancing “green energy” but it needs to be driven by the free market – not ideology… there are a plethora of Rivian alternatives, so it’s not the end of the world if they fail.
And even if you think “global warming” or “climate change” is an urgent issue or existential risk (I don’t) – Rivian won’t be the savior. There are better options with Tesla, solar, nuclear, fusion, etc.
Questionable Environmental Impact: Rivian claims its vehicles will save 146 million gallons of petroleum annually. But why Rivian specifically? Other companies like Tesla, solar, or nuclear offer more reliable alternatives.
Misguided Priorities: Funding Rivian aligns with the perception of action against climate change, but at what cost? The focus on ideological goals risks wasting taxpayer money on an underperforming company.
4. Weaker EV Maker
The decision to prioritize Rivian – a financially unstable startup that’s been around since 2009 – over more proven or stable companies suggests an ideological preference for promoting competition and new entrants in the EV market.
Ignoring Proven Leaders: Tesla, a market leader with consistent profitability, was overlooked despite being better positioned to provide a higher ROI.
Favoritism for Rivian: The loan effectively props up a smaller competitor in a risky bet to diversify the EV market, potentially at the expense of market efficiency.
Potential for Failure: With ongoing production challenges and shrinking revenue growth, Rivian’s trajectory raises concerns about its ability to meet the loan’s goals.
This choice reflects a focus on supporting underdogs and advancing "woke capitalism," where market success is deprioritized in favor of ideological diversity in the industry.
5. Politically Motivated
The loan’s timing and location raise questions about its political motivations, as Biden is currently a “lame duck” president and knows Trump is on his way in.
Georgia as a Swing State: The loan targets Georgia, a politically crucial state, and promises 7,500 operational jobs and 2,000 construction jobs, aligning with efforts to sway voters in the region.
Biden’s parting jab at Trump?: Biden is aware that Trump will be taking over as president and may slash gov subsidies for many EV manufacturers – which may hurt their bottom lines and/or accelerate potential bankruptcies.
6. The Tesla & Elon Musk Factor
Though I don’t think the primary motivation behind the Rivian loan was an indirect shot at Tesla and Elon Musk.
I do think it will be interpreted that way - and this interpretation could have some merit given how much the Dems hate Musk.
Ideological Bias Against Musk: Elon Musk’s criticism of woke policies likely played a role in favoring Rivian, whose funding aligns with the administration’s priorities.
Favoritism Over Merit: Propping up Rivian feels less like sound economic policy and more like a political statement against Musk and Tesla.
But, but, but Tesla got a similar loan back in 2010 from the U.S. government…
Yeah but that was when there were basically zero 100% EVs on the market.
Anyone trying to suggest that the loan to Tesla back in 2010 is the same as what Rivian’s getting now is mentally challenged.
1. Established EV Market
Tesla in 2010: When Tesla received its loan, the EV market was virtually non-existent. Consumer demand was unproven, and charging infrastructure was sparse. The loan catalyzed a new industry and demonstrated the viability of electric vehicles.
Rivian in 2024: Rivian operates in a mature EV market, where Tesla alone produced 1.8 million vehicles in 2023, and EVs represent a growing share of global vehicle sales. Unlike Tesla’s pioneering efforts, Rivian is competing in a crowded market with numerous established players, including Tesla, legacy automakers, and other EV startups.
Reality: Federal funds may no longer be necessary to promote EV adoption in such a developed market.
2. Market Position & Competition
Tesla in 2010: Tesla faced no direct competitors and used its loan to establish its first manufacturing capabilities. Its success paved the way for a global EV industry.
Rivian in 2024: Rivian holds just 5% of the U.S. EV market and is up against well-established competitors with mature production systems and vast resources. Federal funds may not significantly impact Rivian’s ability to compete in a saturated market.
Reality: Rivian lacks the unique pioneering position that justified Tesla’s federal support.
3. Loan Size Disparity
Tesla’s Loan (2010): $465 million ($630 million adjusted for inflation) helped Tesla establish its initial production capacity.
Rivian’s Loan (2024): $6.6 billion (10x Tesla’s loan) is earmarked for a factory that will begin production in 2028, with a planned capacity of 400,000 vehicles annually. In contrast, Rivian plans to produce just 57,000 vehicles in 2024.
Reality: The scale of Rivian’s loan appears disproportionate to its current production capabilities and market presence.
4. Financial Viability
Tesla: Used its loan to establish production and repaid it 9 years early through proceeds from a stock and debt offering. Tesla demonstrated financial discipline and market viability early on.
Rivian: Continues to operate at a loss, with significant cash burn. The loan introduces higher financial risk for taxpayers, given Rivian’s small market share and unproven profitability.
Reality: Rivian’s financial position makes the loan a riskier investment than Tesla’s.
5. Timing & Urgency
Tesla: Used its loan for immediate growth during a critical period of EV development.
Rivian: Plans to use the loan for a factory that won’t begin production until 2028, a timeline that raises concerns about the loan’s near-term impact in a fast-evolving industry.
Reality: The delayed timeline reduces the urgency and relevance of federal funding.
6. Availability of Private Capital
Tesla in 2010: Struggled to secure private funding in an unproven EV market, making the DOE loan critical.
Rivian in 2024: Has access to private funding, partnerships, and institutional investors. For example, Rivian recently expanded its partnership with Volkswagen, highlighting its ability to secure industry support.
Reality: Rivian has alternative funding options that Tesla lacked, reducing the need for federal intervention.
Comparison Assessment
Rivian’s $6.6 billion loan appears unnecessary given the maturity of the EV market, the company’s small market share, and the availability of private funding.
Unlike Tesla’s loan, which jump-started an industry in its infancy, Rivian’s funding supports long-term goals that private capital could better address.
Public funds might be better allocated toward projects with higher-probability ROI.
The Rivian Money Pit: Cash Burn Rate vs. Sales, Revenue, Profits
This is why giving Rivian a loan that exceeds over half their market cap (currently $10.7B) is dumb AF.
Financial metrics
Revenue:
$874 million for Q3 2024, a 35% decline from the previous quarter.
Annual revenue is $4.55 billion TTM, showing YoY growth but revealing volatility in quarterly performance.
Net Loss:
$1.1 billion for the quarter, contributing to a TTM loss of $5.52 billion.
Represents a net profit margin of -121.38%, underscoring Rivian’s inability to approach breakeven profitability.
Negative Gross Margin:
Gross margin stands at -41.1% for Q3, marginally better than earlier periods but still deeply negative, reflecting inefficiencies in cost management and scaling production.
Losses Per Vehicle:
Rivian reportedly loses $39,000 per vehicle, an improvement from -$124,000 per vehicle in Q4 2022, but still unsustainable in the long run.
Cash Reserves:
Cash and cash equivalents declined to $7.85 billion in Q3 2024, down from $9.37 billion at the end of FY 2023.
This represents a cash burn rate of over $1 billion per quarter, potentially depleting reserves by mid-2026 without new funding.
Market Capitalization vs. Loan Amount:
With a market cap of $10.7 billion, the $6.6 billion DOE loan represents more than 60% of Rivian’s total valuation, raising questions about the appropriateness of extending such a substantial loan.
Operational Challenges
Underutilized Production Facilities:
Rivian’s plants are not yet operating at full capacity, limiting their ability to achieve economies of scale and reduce per-unit costs.
Current facilities produced 54,290 vehicles in Q3 2024, well below their potential, with the Georgia facility still years away from contributing.
Georgia Facility Dependence:
The Georgia plant, financed by the DOE loan, will not start production until 2028, meaning Rivian’s financial performance must rely solely on its existing facilities for the next 4 years.
Delays in scaling current production make bridging this gap even more critical.
Scaling vs. Costs:
Rivian’s costs remain disproportionately high, with $1.87 billion in SG&A (+12.67% YoY) and $1.77 billion in R&D (-5.67% YoY), both significant contributors to its losses.
What if Rivian didn’t secure the U.S. Department of Energy (DOE) loan?
Without the $6.6B DOE loan, I think Rivian would still survive – but they’d need funding quickly from another source.
Alternative Funding: Rivian would need to raise $5-10 billion through equity (diluting shareholders) or debt (increasing financial strain). Amazon or institutional investors may step in to protect their investments but could demand stricter terms.
Georgia Facility Delays: Without the loan, construction would be delayed or downsized, pushing R2/R3 production beyond 2028, limiting long-term growth potential.
Cost-Cutting: Aggressive reductions in R&D, SG&A, or other expenses would slow innovation and hurt competitiveness.
Rivian’s Future: Simulating Potential Timelines
I ran Rivian’s full financials and growth metrics through various AIs and had them estimate the most likely future for Rivian in a timeline format with “odds” of each scenario happening.
Odds of Outcomes
Basically as long as Rivian survives through 2030 – they shouldn’t have much difficulty becoming profitable due to acceleration of production and revenue growth.
Profitability (by 2030): 50%. Rivian’s success hinges on the Georgia facility ramping up as planned, strong demand for the R2/R3 models, and improved cost efficiencies.
Bankruptcy (by 2030): 30%. Financial strain remains a substantial risk, especially if Rivian fails to secure adequate funding before 2026 or faces unexpected operational delays.
Buyout or Strategic Partnership (by 2030): 20%. Rivian’s assets, contracts (e.g., Amazon), and production capacity make it an attractive acquisition target, especially if profitability remains elusive.
Assumptions
1. Georgia Facility Contribution:
Production Timeline: Phase 1, with a capacity of 200,000 units/year, is projected to begin in 2028. Phase 2, expanding to 400,000 units/year, is likely to complete post-2030.
Revenue Impact: This facility will be critical to scaling operations, achieving economies of scale, and reducing per-unit costs. However, it will not contribute revenue until 2028.
2. Cash Flow Constraints:
Current Cash Burn: Rivian is burning approximately $5.12 billion annually in free cash flow (TTM).
Funding Needs: Without additional funding, Rivian’s current cash reserves (~$6.74 billion) will deplete by mid-2026. The company will require $5-10 billion to bridge operations until Georgia facility revenue begins.
3. DOE Loan’s Impact:
The $6.57 billion DOE loan is exclusively tied to the Georgia project and cannot be used to offset operational deficits.
While it secures Rivian’s long-term production capacity, it offers no immediate relief for cash flow challenges.
4. Industry Competition:
Rivian will face intense competition in the midsize EV market from both established automakers (e.g., Tesla, Ford) and new entrants.
Its ability to succeed depends on offering competitive pricing, maintaining demand, and scaling production efficiently.
5. Demand for R2/R3 Models:
Rivian’s profitability hinges on strong and sustained demand for its R2 and R3 midsize electric SUVs.
The company must balance affordability, quality, and brand differentiation in an increasingly crowded market.
6. Execution Risks:
Delays or cost overruns at the Georgia facility could significantly derail profitability timelines.
Macro factors, such as supply chain disruptions or recessionary pressures, could further challenge scalability and demand projections.
Future Timelines & Odds
A.) 2024-2027: Pre-Georgia Facility Era
Rivian’s current facilities drive revenue growth as deliveries increase at a steady rate of ~20-30% YoY.
Margins improve but remain negative due to high production costs, limited economies of scale, and the challenge of scaling while managing SG&A and R&D expenses.
Cash burn remains a critical issue, projected at $4-$5 billion annually, depleting the current cash reserves (~$6.74 billion as of Q3 2024) by mid-2026 unless additional funding is secured.
The DOE loan, tied to the Georgia project, does not address short-term cash needs, meaning Rivian must raise $5-$10 billion in equity or debt by FY 2026.
Odds
Bankruptcy by 2026: 35%. Without sufficient funding, Rivian risks running out of cash before the Georgia facility begins contributing.
Profitability by 2027: 15%. Rivian is unlikely to reach profitability in this period due to high fixed costs and limited production capacity.
Buyout or Strategic Partnership by 2027: 20%. Rivian’s production capabilities and technology make it an attractive acquisition or partnership target.
B.) 2028-2030: Georgia Facility: Phase 1
Georgia facility begins production in 2028, adding an initial capacity of 200,000 units/year (R2 and R3 models).
Revenue growth accelerates, potentially doubling annual deliveries by FY 2030 (~500,000 vehicles/year across all facilities).
Margins improve significantly as production scales, targeting breakeven or slightly positive gross margins by FY 2029.
Rivian remains cash-flow negative during the ramp-up but reduces its cash burn to manageable levels (<$1 billion annually) due to improved operating efficiencies.
Odds
Profitability by 2030: 50%. Achieving breakeven EBITDA depends on scaling production, maintaining demand, and avoiding significant execution delays.
Bankruptcy by 2030: 20%. Execution risks at the Georgia facility or sustained demand challenges could result in financial failure.
Buyout by 2030: 20%. If financial strain persists, Rivian may be acquired for its assets, contracts, and technology.
C.) 2030+: Georgia Facility Full Capacity
Phase 2 of the Georgia facility is completed, increasing total production capacity to 400,000 units/year.
Rivian potentially delivers 600,000+ vehicles/year, achieving economies of scale that support sustained profitability.
The company begins generating positive free cash flow and focuses on expanding market share and introducing new models.
Odds
Sustained Profitability: 60%. Rivian becomes a stable player in the EV market, with production efficiencies driving long-term success.
Bankruptcy: 10%. Minimal risk of financial failure if Rivian successfully scales by this stage.
The realistic path for Rivian includes a mid-to-long-term struggle to profitability, contingent on:
Securing additional funding by FY 2026.
Smooth execution of the Georgia facility project starting in 2028.
Sustained demand and pricing for R2 and R3 models.
The DOE loan offers critical support but primarily impacts Rivian's mid-term prospects rather than its immediate financial challenges.
I would guess that Rivian stays financially afloat due to massive backers (Amazon, T. Rowe Price, Volkswagen, Ford, U.S. Government DOE).
They can see a path to profitability – and will likely keep injecting money even if it means lighting cash on fire for a few more years.
How TF has Rivian stayed financially afloat? (Major backers)
Without major financial backing from the likes of Amazon, T. Rowe Price, Global Oryx, VW, et al. – Rivian wouldn’t be sustainable.
That said, the U.S. Government (DOE) is keeping Rivian afloat by giving them a loan that exceeds half their current market cap: $6.6B.
1. Amazon
Amazon is Rivian's largest shareholder and provides critical revenue through its order of 100,000 electric delivery vans.
This partnership not only supplies financial stability but also ensures production scalability and market presence.
Investment: $5.07 billion in shares and ongoing commercial orders.
2. T. Rowe Price Associates
As the largest institutional investor, T. Rowe Price has consistently participated in Rivian's funding rounds, contributing to the capital needed for product development and expansion.
Investment: 141.6 million shares valued at $4.53 billion.
3. Global Oryx Group
Early-stage funding from this Saudi Arabian investor was critical during Rivian’s formative years, and its continued support reinforces long-term confidence in Rivian's success.
Investment: $3.64 billion in shares.
4. Volkswagen
Volkswagen’s recent $5 billion commitment and focus on collaborative software and vehicle architecture development significantly enhance Rivian’s technological edge and financial backing.
Investment: Up to $5 billion, with an initial $1 billion already committed.
5. Capital Research & Management
As a key institutional investor, its substantial stake provides liquidity and market confidence for Rivian.
Investment: 44.9 million shares worth $1.44 billion.
6. BlackRock
A global investment giant, BlackRock’s support adds credibility and ensures continued access to capital markets.
Investment: 32.2 million shares valued at $1.03 billion.
7. Vanguard Group
Vanguard’s steady investment underlines institutional faith in Rivian’s long-term prospects.
Investment: 24.8 million shares valued at $791.9 million.
How does Rivian compare to other EV & automakers in the U.S.?
Rivian is a newer EV company trying to compete with established players.
Some of these metrics should be expected for a smaller, newer EV company until they scale up… the question is will they ever be able to efficiently scale?
Smaller Market Cap: Rivian’s market cap is a fraction of other U.S. automakers. The DOE loan accounts for over 60% of its market cap - highlighting its precarious valuation.
Much Worse Operational Efficiency: Rivian’s gross margin is -41.1%, compared to Tesla’s positive gross margin of ~20-25%. Rivian loses approximately $39,000 per vehicle, while Tesla and legacy automakers generate profits per unit due to scale and mature supply chains.
Much Worse Profitability: Rivian’s net profit margin is -121.38% (Q3 2024), compared to Tesla’s net profit margin of ~15% and Ford’s ~4%. Rivian remains heavily reliant on external funding, with negative free cash flow (-$5.12 billion TTM), while peers like Tesla generate billions in positive cash flow.
Slower Revenue Growth (Relative to Start): Rivian’s YoY revenue growth (+20.33% TTM) has slowed considerably from earlier exponential growth (+2914.55% in FY 2021), reflecting maturation and production bottlenecks. Tesla and other established automakers show more stable revenue growth with significantly larger revenue bases.
Limited Production Scale: Rivian’s total production capacity (~150,000 units/year) pales in comparison to Tesla’s >1.5 million vehicles/year or Ford’s millions of units across its fleet. The underutilization of existing facilities further limits its ability to achieve economies of scale.
Liquidity Challenges: Rivian’s burning over $1B per quarter, while Tesla and legacy automakers maintain healthier balance sheets and access to capital.
Reliance on Key Contracts: Rivian relies heavily on Amazon’s delivery van order (100,000 units by 2030) for stability, while Tesla and others have diversified customer bases.
Could other companies have used a $6.6B gov loan more efficiently?
Yes, established companies like Tesla, Ford, or GM could have used the $6.6 billion loan more efficiently due to their existing scale and profitability.
1. Tesla
Would likely use the funds to expand Gigafactories globally, boosting production capacity for popular models like the Model 3/Y.
Could invest in battery technology, driving down costs and improving EV affordability.
Tesla’s proven track record of profitability ensures that taxpayer money would yield tangible results quickly.
2. Ford
Could accelerate production of its F-150 Lightning and other EV models.
Invest in scaling its battery supply chain, ensuring faster delivery and lower costs for vehicles.
Ford’s existing infrastructure means funds would directly support efficient scaling.
3. GM
Use the loan to expand its Ultium platform, which underpins multiple EV models.
Ramp up production for affordable EVs, like the Chevy Bolt, to capture mainstream buyers.
GM’s extensive dealer network would ensure a broader impact on EV adoption.
These companies are already profitable, have large-scale operations, and could leverage the loan to expand production faster and reduce EV costs for consumers, unlike Rivian, which is still struggling with basic operational efficiency.
Do I think Rivian getting a $6.6B gov loan was dumb?
Yes. Rivian has potential, but I don’t think the loan should’ve been from U.S. government without stronger rationale.
Rivian is financially unstable with no clear path to consistent profitability. The company is burning over $1 billion per quarter, with negative gross margins (-41.1%) and losses of ~$39,000 per vehicle sold. While demand for their vehicles is strong, Rivian still relies on external funding to survive, and there’s no guarantee it can scale profitably.
Money could’ve been used more efficiently elsewhere. At over $6.6 billion, this loan is over half Rivian’s market cap (~$10.7 billion) and could’ve been better spent on broader EV infrastructure, like nationwide charging stations, which would benefit all automakers. Betting big on one financially unstable company is both risky and unfair to competitors.
Anti-free market. The government is effectively picking winners and losers by backing Rivian, a company already supported by major financial backers like Amazon, T. Rowe Price, Ford, and VW. These investors have the resources to save Rivian if needed and likely view this loan as a taxpayer bailout of their risky investment. Free market principles suggest Rivian’s private investors, not taxpayers, should bear the risk.
High risk of failure. Even with the loan, Rivian’s odds of bankruptcy (~30-40% by 2026) remain significant. If Rivian can’t drastically reduce cash burn and improve production efficiency, the Georgia facility (set to start production in 2028) may not even materialize as planned.
That said, demand for Rivian vehicles remains strong, with steady sales growth: 13.69k in 2022, 47.2k in 2023, and ~46.02k in 2024.
If Rivian eventually becomes a legitimate EV contender, this loan might look like a smart move in hindsight.
However, with no guarantees of profitability and heavy reliance on taxpayer money, this loan feels like a high-stakes gamble that should’ve been left to private investors.
What do you think about the gov loan to Rivian?
Do you think that despite all the woke (“Justice40”) and socialist elements (gov subsidizing a struggling company) that it might still be a good idea for Rivian to have gotten the loan?
Are you thinking like: Rivian will likely become profitable between 2030-2034, Rivian will accelerate EV adoption in the U.S., Rivian will drive up competition (which helps fuel innovation & helps consumers with prices), etc.?
And/or are you thinking about: it’s good to have more auto/EV jobs in the U.S. – in addition to Tesla, Ford, GM, Hyundai, etc.? And increasing local jobs in GA isn’t necessarily a bad thing?
I’m personally against the loan, but I can acknowledge that there are some legitimate arguments to be made in favor of the loan that aren’t necessarily woke.