DGS49
Diamond Member
[From the New York Fucking Times]
The Biden administration said on Monday that it would lend $6 billion to help Rivian build an electric car factory in Georgia [in a district won heavily by Trump] , part of an effort to lock in Democratic climate policies before President-elect Donald J. Trump takes office.
Rivian, a relatively new company that makes only electric vehicles, plans to produce sport utility vehicles and hatchbacks at the factory, in Social Circle, Ga., near Atlanta.
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.
“Rivian will work closely with D.O.E. to close the loan quickly,” the company said in a statement.
The project is in a congressional district represented by a Republican, highlighting how much Biden administration clean energy policies have benefited regions where most voters back conservative politicians, including Mr. Trump.
How would you consider a "loan" that has zero chance of ever being repaid? How would you consider an attempt to "save the planet" by subsidizing a product that, by and large, is powered by fossil fuels? These are among the many puzzles confronting observers of the slowly-dying Biden Administration.
I am something of a "car guy" and I'm a big fan of Rivian, whose products - an SUV called the R1S and a sort-of truck called the R1T - are nothing short of fabulous, if seriously over-priced. But there is a major, one might even say "fatal," problem with these two lovely vehicles: Rivian loses more than thirty thousand dollars on each one. And that's even after adding a couple of five-figure mandatory "options" to the price tag. The losses are not amenable to being eliminated through volume because they mainly relate to expensive components bought from third parties.
Hence, Rivian is on an unavoidable path to bankruptcy. In addition to Biden's give-away, Volkswagen has recently signed a five billion dollar deal for technical cooperation with Rivian, but VW, large as it is, has its own problems to overcome, having invested heavily to produce EV's that too few people want. Ultimately, VW only wants Rivian's help with software.
I am reminded of the specious observation of an accounting-deficient executive I once worked for, "We lose money on every sale, but make up for it in volume*."
This is yet another "finger in the eye" of Donald Trump and his supporters, pissing away five billion dollars as Biden stumbles out the exit doors of the White House. And as for the funds, remember how Congress virtually made Trump offer them all a free BJ to get a similar amount to finish his "Wall" during the last months of his Administration - an amount that they declined to provide, saying in effect, We could not afford it.
_____________________________
* Any cost accountants reading this will know that this can actually be done through "over-absorption" of overheads.
The Biden administration said on Monday that it would lend $6 billion to help Rivian build an electric car factory in Georgia [in a district won heavily by Trump] , part of an effort to lock in Democratic climate policies before President-elect Donald J. Trump takes office.
Rivian, a relatively new company that makes only electric vehicles, plans to produce sport utility vehicles and hatchbacks at the factory, in Social Circle, Ga., near Atlanta.
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.
“Rivian will work closely with D.O.E. to close the loan quickly,” the company said in a statement.
The project is in a congressional district represented by a Republican, highlighting how much Biden administration clean energy policies have benefited regions where most voters back conservative politicians, including Mr. Trump.
How would you consider a "loan" that has zero chance of ever being repaid? How would you consider an attempt to "save the planet" by subsidizing a product that, by and large, is powered by fossil fuels? These are among the many puzzles confronting observers of the slowly-dying Biden Administration.
I am something of a "car guy" and I'm a big fan of Rivian, whose products - an SUV called the R1S and a sort-of truck called the R1T - are nothing short of fabulous, if seriously over-priced. But there is a major, one might even say "fatal," problem with these two lovely vehicles: Rivian loses more than thirty thousand dollars on each one. And that's even after adding a couple of five-figure mandatory "options" to the price tag. The losses are not amenable to being eliminated through volume because they mainly relate to expensive components bought from third parties.
Hence, Rivian is on an unavoidable path to bankruptcy. In addition to Biden's give-away, Volkswagen has recently signed a five billion dollar deal for technical cooperation with Rivian, but VW, large as it is, has its own problems to overcome, having invested heavily to produce EV's that too few people want. Ultimately, VW only wants Rivian's help with software.
I am reminded of the specious observation of an accounting-deficient executive I once worked for, "We lose money on every sale, but make up for it in volume*."
This is yet another "finger in the eye" of Donald Trump and his supporters, pissing away five billion dollars as Biden stumbles out the exit doors of the White House. And as for the funds, remember how Congress virtually made Trump offer them all a free BJ to get a similar amount to finish his "Wall" during the last months of his Administration - an amount that they declined to provide, saying in effect, We could not afford it.
_____________________________
* Any cost accountants reading this will know that this can actually be done through "over-absorption" of overheads.
