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Path: ...!news.misty.com!weretis.net!feeder9.news.weretis.net!i2pn.org!i2pn2.org!.POSTED!not-for-mail From: ltlee1@hotmail.com (ltlee1) Newsgroups: soc.culture.china Subject: Rise & fall of a government Unicorn Date: Fri, 29 Nov 2024 12:29:50 +0000 Organization: novaBBS Message-ID: <e832a479a660245e5a6397d8ac98d712@www.novabbs.com> MIME-Version: 1.0 Content-Type: text/plain; charset=utf-8; format=flowed Content-Transfer-Encoding: 8bit Injection-Info: i2pn2.org; logging-data="462024"; mail-complaints-to="usenet@i2pn2.org"; posting-account="pxsmGrN7Y7mF0hfJcY//7F6kiWqDRq/tZN4FOOcim3s"; User-Agent: Rocksolid Light X-Rslight-Site: $2y$10$Z0J7QPZx6kSRQvmYAyZhNul8OHgbzM.vLaV.oSnl.d9Ffpo3FHpby X-Rslight-Posting-User: 0099cdd7dc5bd7b25c488bf8bcfab81a117b2ffc X-Spam-Checker-Version: SpamAssassin 4.0.0 Bytes: 3117 Lines: 41 Can it rise again? "In this unfortunate era of industrial policy, it’s good to be a politically favored company no matter your commercial prospects. Consider the Biden Energy Department’s stunning $6 billion loan to struggling Rivian Automotive to make electric vehicles. We had fun calling Rivian a “government unicorn” three years ago when it went public and surged to a fantastic $120 billion market valuation. Rivian at the time had sold a mere 156 vehicles despite being in business for 12 years. Its shares are now worth $11.8 billion. Investors may have been betting on government subsidies supercharging Rivian’s growth, and they can’t blame the Biden Administration for not delivering. The Inflation Reduction Act includes a $7,500 tax credit per vehicle for EV buyers, plus a $40,000 credit for commercial EVs. The latter is a particular boon for Amazon, that corporate pauper, which owns shares representing 14.8% of Rivian’s voting power and has agreed to buy up to 100,000 of its delivery vans. The IRA also includes hefty subsidies for domestic battery production. Despite these giant subsidies, Rivian lost about $4 billion on the 37,396 vehicles it has sold during the first nine months of this year. That’s $107,043 a vehicle. Ford loses only about $51,000 on each EV sold. But unlike traditional auto makers, Rivian can’t use profits from gas-powered cars to subsidize EVs. Thus the company is rapidly burning through cash. It has suffered repeated assembly disruptions and had to recall vehicles to fix defects. It has $1.25 billion in debt due in 2026, so its current spending pace is problematic. Enter the Biden DOE, which on Monday awarded Rivian the $6 billion loan to build a factory in Georgia with the capacity to make 400,000 SUVs and crossovers. This follows Illinois Gov. J.B. Pritzker’s pledge this spring of $827 million in state “incentives” for Rivian to expand production at an Illinois plant to 215,000 vehicles a year. They believe in an EV field of dreams. But even if Rivian scales up and builds all these EVs, there’s no guarantee someone will buy them." https://www.wsj.com/opinion/biden-tosses-rivian-a-6-billion-lifeline-dfdce139