MW Rivian to use Biden administration loan to boost competitiveness of its EVs
By Tomi Kilgore
EV maker plans to use Energy Department loan to 'aggressively' grow manufacturing of 'competitively priced' R2 and R3 vehicles
Shares of Rivian Automotive Inc. got a lift Tuesday after the electric-vehicle maker said it received a "conditional commitment" from the Biden administration for a loan of up to $6.6 billion to help accelerate its manufacturing in the U.S.
The company said that if the loan, which was announced Monday by the U.S. Energy Department, is finalized, it would be used to support construction of a facility at Rivian's Stanton Springs North site, which is near the city of Social Circle, Ga.
The stock $(RIVN)$ climbed 2.5% in midday trading but pulled back from earlier premarket gains of as much as 10.8%, as there's no guarantee the DOE's Advanced Technology Vehicle Manufacturing Loan Program will remain in place after Donald Trump becomes president in January.
Elon Musk, chief executive of Rivian rival Tesla Inc. $(TSLA)$, was tapped by Trump, along with fellow billionaire Vivek Ramaswamy, to lead what is being called the Department of Government Efficiency in an effort to cut "wasteful" government spending.
Meanwhile, the 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," Rivian CEO RJ Scaringe said.
The DOE said the loan is in support of the Biden administration's goal for half of all new vehicles sold in 2030 to be zero-emission vehicles.
For the loan to be finalized, the DOE and Rivian must satisfy certain "technical, legal, environmental and financial conditions," Rivian said.
It's uncertain what those conditions may look like in January. Because Trump has selected fossil-fuel executive Chris Wright, who has been against government efforts to fight climate change, as his nominee for energy secretary, there's a good chance that the DOE's goal around EVs will change.
Rivian's stock has tumbled 49.3% year to date, while Tesla's stock has rallied 37.6%, the Global X Autonomous & Electric Vehicles exchange-traded fund DRIV has slipped 4.8% and the S&P 500 index SPX has advanced 26%.
-Tomi Kilgore
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November 26, 2024 12:13 ET (17:13 GMT)
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