Rivian Gets $6.6B DOE Loan Commitment for Georgia Plant Construction

[Grabs10]

With the low interest rate that Rivian will get on this loan I think Rivian should invest it in Tesla stock or Doge coin for a few years. Gains on those will likely exceed the interest rate charged on the DOE loan. Every quarter a 100’s of millions in loan payment is due with a rather substantial balloon payment at the end of the term if it is structured anything like Ford had when it had the loan. Rivian misses a loan payment at any point they are sunk with the upcoming administration as well as most of the public. This loan will likely push out much of any profitability hope for Rivian for at least the rest of the decade if not longer.

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[COdogman]

Please send this link whenever a Tesla fanboy complains about the loan: https://www.energy.gov/lpo/tesla

The RIvian loan is obviously a much bigger bet but hypocrisy is a binary state.

It’s hard to pin down exactly how much each of Elmo’s companies have received from government deals or loans or subsidies, but it’s estimated that SpaceX has done around $15 billion in deals. The Boring company took a pandemic loan and had $800k forgiven.

Tesla took that $465 million DOE loan, and it’s estimated that $3billion in tax credits have been issued to Tesla customers so far, which helped them sell a bunch of cars. It’s likely the company would have failed if not for those 2 factors. And I’m glad they did benefit from that help.

I’m sure all of this will fall on deaf ears if discussing the issue with a full blown cult member. Elmo could break into their home and leave an upper decker in their toilet and they would call it genius and thank him for the privilege of cleaning it up.

 

[adam12]

Let’s hope this comes to fruition. New administration in a few months. With Elmo in the presidents ear I could see him trying to kill the loan to hurt Rivian.

I think "Elmo" is more interested in pushing robotic manufacturing in my opinion. I think that this is the reason behind raising tariffs and pushing for manufacturing to return. This is the reason for his push to take over twitter and his political push.

Creating choking prices from abroad is the only way to push for more automatization. We will never be able to match the low wage from abroad and automatization is the only way to change this equation.

 

[BigSkies]

This is great news. While Normal has the capacity to create a decent gross-profit, Rivian needs GA to get to cash-flow positive. This should give them the capital to get there.

My biggest short-term worry for the company is whatever new tariffs come down the line. Even "made in America" cars rely on a lot of underlying components sourced from outside the country. While we don't know enough to come to any conclusions, there's a real risk that 2025 gross margins could be at risk if tariffs hit the wrong places.

I personally worked with a US based auto parts manufacturer that went bankrupt partly because of the last round of tariffs. Just because they made their products in the US didn't make them immune from the impacts of their input costs spiking.

 

[vandy1981]

My biggest short-term worry for the company is whatever new tariffs come down the line.

"They're not actually going to do that." ™️

 

[ThirteenElectrics]

I think it's a mistake. Building out that factory is going to emit a lot of carbon, and more mature automobile manufacturers already have factories that can be repurposed to build EVs with less pollution. Once the factory is built Rivian is just going to sell pollution credits to other manufacturers, so there will be be no net increase in EV production in the U.S. Think about it: all those carbon emissions, and zero extra EVs produced, because those pollution credits will curtail EV production elsewhere.

Also, this loan is gigantic and will be a burden on Rivian: Tesla's DOE loan was $450M, this loan is 15x bigger! Rivian clearly has a problem with spending, this loan isn't going to help. Tesla's accumulated deficit, or retained earnings, never got below $-7 billion, IIRC. Rivian has already lost $-21.461 billion since inception, 3x more than Tesla ever did.

 

[Riviot]

I think it's a mistake. Building out that factory is going to emit a lot of carbon, and more mature automobile manufacturers already have factories that can be repurposed to build EVs with less pollution. Once the factory is built Rivian is just going to sell pollution credits to other manufacturers, so there will be be no net increase in EV production in the U.S. Also, this loan is gigantic and will be a burden on Rivian: Tesla's DOE loan was $450M, this loan is 15x bigger! Rivian clearly has a problem with spending, this loan isn't going to help. Tesla's accumulated deficit, or retained earnings, never got below $-7 billion, IIRC. Rivian has already lost $-21.461 billion since inception, 3x more than Tesla ever did.

Traitors* seem to agree, stock is down this morning.

*Intentional

 

[Kidentist]

Well, well, well......I wonder whose palms got greased...... ?

 

[Mike Hunt]

Dietrich Bonhoeffer theories are valid and live on.

 

[Canthoney]

Key info:

“The Biden administration said on Monday that it would lend $6 billion to help Rivian build an electric car factory in Georgia, part of an effort to lock in Democratic climate policies before President-elect Donald J. Trump takes office…The loan agreement will be binding once the Department of Energy and Rivian sign a contract, which is expected to take place before Mr. Trump’s inauguration in January.”

https://www.nytimes.com/2024/11/25/business/biden-loans-ev-auto-industry.html?searchResultPosition=1

 

[Redline]

Key info:

“The Biden administration said on Monday that it would lend $6 billion to help Rivian build an electric car factory in Georgia, part of an effort to lock in Democratic climate policies before President-elect Donald J. Trump takes office…The loan agreement will be binding once the Department of Energy and Rivian sign a contract, which is expected to take place before Mr. Trump’s inauguration in January.”

https://www.nytimes.com/2024/11/25/business/biden-loans-ev-auto-industry.html?searchResultPosition=1

Thank you adults in the room.

 

[Bullwinkle]

Traitors* seem to agree, stock is down this morning.

*Intentional

It is up today and up 20% in the last 5 trading days.

 

[Riviot]

It is up today and up 20% in the last 5 trading days.

 

[Golfer04]

I'm happy for Rivian, but as a taxpayer I get really sick of corporate welfare (sorry, the rates & terms are exactly that). This announcement together with the $8 billion Intel gift means taxpayers lose again. At BH's 2023 annual meeting Warren Buffett stated S & P 500 tax credits now exceed the gross tax receipts paid by individuals (which is $2.2 trillion). China says it is why they subsidize their exports. Trying to compete with US corporate tax credits. Believe that or not, but the practice is WAY out of hand.

 

[Redline]

I'm happy for Rivian, but as a taxpayer I get really sick of corporate welfare (sorry, the rates & terms are exactly that). This announcement together with the $8 billion Intel gift means taxpayers lose again. At BH's 2023 annual meeting Warren Buffett stated S & P 500 tax credits now exceed the gross tax receipts paid by individuals (which is $2.2 trillion). China says it is why they subsidize their exports. Trying to compete with US corporate tax credits. Believe that or not, but the practice is WAY out of hand.

Its a loan, not a gift.

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