Just days before handing over the reins to President-elect Donald Trump, the Biden administration made a bold move: they cut a multi-billion dollar check to help struggling electric vehicle (EV) maker Rivian. The $6.57 billion loan comes at a time when the carmaker desperately needs a win after losing roughly $4 billion in the first three quarters of 2024.
Why Rivian Needed a Lifeline
Let’s face it—2024 wasn’t exactly a joyride for Rivian. With demand for EVs cooling down, the company found itself burning cash at an alarming rate. To make matters worse, Rivian hasn’t turned a profit in a single quarter since its founding in 2009. In the third quarter of 2024, they were losing nearly $40,000 per vehicle sold. Ouch.
But the Biden administration seems to believe Rivian’s story isn’t over. The Department of Energy (DOE) stepped in to provide a lifeline. The funds are earmarked for building a new manufacturing plant in Stanton Springs North, Georgia, which Rivian hopes will be the key to turning things around.
A Vision for Growth (and Jobs)
“This loan will help us accelerate the launch of our Georgia plant for the R2 [SUV] and R3 [crossover], providing thousands of jobs in the state,” Rivian CEO RJ Scaringe shared in a statement. He added that the company’s upcoming models have generated plenty of buzz, and this expansion is crucial to maintaining U.S. leadership in the EV industry.
If all goes as planned, the new plant will create thousands of jobs while boosting production for Rivian’s mass-market vehicles. It’s a high-stakes gamble that could redefine Rivian’s future—and perhaps the future of the U.S. EV market.
Not Without Controversy
Of course, not everyone is on board with this move. The DOE’s Loan Programs Office (LPO), which approved the loan, has faced criticism for its operations. In December, an internal watchdog suggested the LPO hit pause on new deals, citing potential conflicts of interest. Critics have also raised questions about LPO Director Jigar Shah’s ties to a green energy trade group he founded prior to joining the DOE.
Adding fuel to the fire, a recent investigation revealed that the office had previously granted $1.2 billion to an EV battery manufacturer with connections to Shah’s trade organization. These allegations have drawn the attention of congressional Republicans, who are closely watching how taxpayer dollars are being spent.
Can Rivian Turn It Around?
The road ahead for Rivian is anything but smooth. With a massive loan in hand and big plans for their Georgia plant, the company has an opportunity to prove it can compete in the ever-evolving EV landscape. But with profitability still out of reach and growing scrutiny surrounding the DOE’s loan practices, Rivian’s future is far from guaranteed.
What Do You Think?
Is this loan a smart investment in the future of American EV innovation, or a risky bet on a company that’s yet to prove itself? One thing’s for sure—the eyes of the industry (and taxpayers) are firmly on Rivian.