Shares of a struggling electric-car maker that competes against Tesla are surging this week after the lame-duck Biden administration loaned the company billions of dollars.
The Department of Energy announced on Tuesday that it was extending a $6.6 billion loan to Rivian for the construction of a $5 billion electric car factory in Georgia that the company initially started but then put on hold due to financial constraints.
Shares of Rivian, an EV startup based in California that has been looking to challenge Tesla — whose CEO Elon Musk has been front and center in boosting President-elect Donald Trump — climbed 15% after news of the loan was announced early Tuesday.
The stock is up 22% this week. On Wednesday, the shares recently changed hands at $12.20, up 5.6%.
The Rivian loan, which is reportedly contingent on the company not actively opposing union organizing efforts at the facility, would enable the company to complete construction of the Atlanta-area plant, which has the support of Georgia’s Republican Gov. Brian Kemp.
The facility is expected to employ 7,500 people who would begin manufacturing electric SUVs and trucks beginning in 2028.
Vivek Ramaswamy, the former Republican presidential candidate who has been named by Trump as co-head alongside Musk of an advisory counsel dubbed the “Department of Government Efficiency,” slammed the Biden administration for the move on Tuesday.
“Biden is forking over $6.6 billion to EV-maker Rivian to build a Georgia plant they’ve already halted,” Ramaswamy wrote on X.
“One ‘justification’ is the 7,500 jobs it creates, but that implies a cost of $880k/job which is insane,” according to Ramaswamy, who added that the move “smells more like a political shot across the bow at @elonmusk & @Tesla.”
Rivian, backed by left-leaning billionaire financier George Soros until last year, was worth as much as $150 billion just three years ago but is now worth slightly more than $10 billion.
“This loan will help create thousands of new American jobs and further strengthen US leadership in EV manufacturing and technology,” RJ Scaringe, Rivian founder and CEO, wrote in a press release Monday.
“A robust ecosystem of US companies developing and manufacturing EVs is critical for the US to maintain its long-term leadership in transportation.”
Musk this week blasted California’s Democratic governor, Gavin Newsom, for his “insane” plan to offer state residents who buy electric vehicles rebates — though the benefit would not be extended to those who purchase Teslas.
While Rivian’s corporate headquarters are based in California, the company’s vehicles are produced in a plant that was once owned by Mitsubishi in Normal, Ill.
Rivian’s R1 vehicles cost $70,000 or more. The company plans to produce R2 vehicles, a smaller SUV, in Georgia with lower price tags aimed at a mass market.
The first phase of Rivian’s Georgia factory is projected to make 200,000 vehicles a year, with a second phase capable of another 200,000 a year.
The loan to Rivian comes against the backdrop of Musk’s active campaigning on behalf of Trump.
Musk has been a fierce critic of President Joe Biden and the Democrats — particularly over issues such as government regulation of business, taxation, coronavirus lockdown measures and hot-button culture war controversies including transgender care and free speech.
The Post has sought comment from the White House.