The Biden administration announced Tuesday it is loaning $6.6 billion to an electric-vehicle maker facing accusations of defrauding investors.
“This $6 billion taxpayer-backed loan to Rivian is a glaring example of corporate welfare disguised as clean energy investment,” said American Energy Institute CEO Jason Isaac.
The Department of Energy’s Loan Program Office is awarding $6.6 billion to a subsidiary of Rivian Automotive to construct Project Horizon, an electric-vehicle factory in Georgia east of Atlanta. Rivian previously paused construction of the $5 billion Georgia facility earlier this year to cut costs and speed up production.
“Rivian’s largest shareholders—Amazon, Volkswagen, Ford, BlackRock, Vanguard, and Saudi investors—are more than capable of footing the bill for their investments. Why should taxpayers shoulder the financial risk for a company backed by some of the wealthiest corporations and investors in the world?”
President Biden’s electric-vehicle policy became a significant liability for Vice President Kamala Harris’s failed presidential campaign. Electric vehicles were strongly disliked in Michigan, a swing-state with a large automotive sector, prompting Harris and Democratic Senate-elect Elissa Slotkin to disavow electric-vehicle mandates leading up to election day.
“Biden is giving a $6 billion federal loan to EV maker Rivian to expand their operations at a time when EV demand is waning. Rivian has been losing billions and may or not be in business in the future. This is another example of Biden putting extreme climate ideology ahead of common sense at the expense of the American people,” said Frank Lasee, president of Truth and Energy in Climate.
The incoming Trump administration is expected to cut back environmental regulations and rescind the Biden White House’s $7,500 electric vehicle tax credit. Trump campaign against electric-vehicle mandates and promised to encourage the expansion of the American energy sector.
“EV makers are facing heavy headwinds from the incoming Trump administration. He has vowed to end the EV mandate and remove the $7,500 EV tax subsidy. If he is successful, the billions in regulatory transfer payments from gas automakers to EV makers would end or be severely less,” Lasee added.
Rivian is simultaneously battling a class-action securities fraud case in California tied to its much-hyped initial public offering three years ago. Plaintiffs allege Rivian failed to disclose material facts about the costs of its electric vehicles and a price increase for its R1 model. Rivian unsuccessfully attempted to have the case dismissed earlier this year and discovery is ongoing.
Shares of Rivian have lost roughly 90 percent of their value since the company’s IPO and the botched price increase in 2022 played a significant role in the stock’s decline. Rivian rolled back the price increase in response to widespread backlash as inflationary pressures and the Russian invasion of Ukraine presented major challenges to the economy.
Large automobile manufacturers have struggled to achieve profitability in the electric vehicle sector after investing billions of dollars into building out EV fleets. Dwindling consumer demand and sustained competition from China have contributed to companies such as Ford and General Motors suffering major losses on EV investments as they attempt to expand their EV offerings and domestic production.
“This $6 billion taxpayer-backed loan to Rivian is a glaring example of corporate welfare disguised as clean energy investment,” said American Energy Institute CEO Jason Isaac.
The Department of Energy’s Loan Program Office is awarding $6.6 billion to a subsidiary of Rivian Automotive to construct Project Horizon, an electric-vehicle factory in Georgia east of Atlanta. Rivian previously paused construction of the $5 billion Georgia facility earlier this year to cut costs and speed up production.
“Rivian’s largest shareholders—Amazon, Volkswagen, Ford, BlackRock, Vanguard, and Saudi investors—are more than capable of footing the bill for their investments. Why should taxpayers shoulder the financial risk for a company backed by some of the wealthiest corporations and investors in the world?”
President Biden’s electric-vehicle policy became a significant liability for Vice President Kamala Harris’s failed presidential campaign. Electric vehicles were strongly disliked in Michigan, a swing-state with a large automotive sector, prompting Harris and Democratic Senate-elect Elissa Slotkin to disavow electric-vehicle mandates leading up to election day.
“Biden is giving a $6 billion federal loan to EV maker Rivian to expand their operations at a time when EV demand is waning. Rivian has been losing billions and may or not be in business in the future. This is another example of Biden putting extreme climate ideology ahead of common sense at the expense of the American people,” said Frank Lasee, president of Truth and Energy in Climate.
The incoming Trump administration is expected to cut back environmental regulations and rescind the Biden White House’s $7,500 electric vehicle tax credit. Trump campaign against electric-vehicle mandates and promised to encourage the expansion of the American energy sector.
“EV makers are facing heavy headwinds from the incoming Trump administration. He has vowed to end the EV mandate and remove the $7,500 EV tax subsidy. If he is successful, the billions in regulatory transfer payments from gas automakers to EV makers would end or be severely less,” Lasee added.
Rivian is simultaneously battling a class-action securities fraud case in California tied to its much-hyped initial public offering three years ago. Plaintiffs allege Rivian failed to disclose material facts about the costs of its electric vehicles and a price increase for its R1 model. Rivian unsuccessfully attempted to have the case dismissed earlier this year and discovery is ongoing.
Shares of Rivian have lost roughly 90 percent of their value since the company’s IPO and the botched price increase in 2022 played a significant role in the stock’s decline. Rivian rolled back the price increase in response to widespread backlash as inflationary pressures and the Russian invasion of Ukraine presented major challenges to the economy.
Large automobile manufacturers have struggled to achieve profitability in the electric vehicle sector after investing billions of dollars into building out EV fleets. Dwindling consumer demand and sustained competition from China have contributed to companies such as Ford and General Motors suffering major losses on EV investments as they attempt to expand their EV offerings and domestic production.
