Trump’s DOGE Partner Scrutinizes Biden’s $6.6 Billion Rivian Loan

Trump’s DOGE Partner Scrutinizes Biden’s $6.6 Billion Rivian Loan

Elon Musk’s designated government efficiency co-czar, Vivek Ramaswamy, has announced his intention to examine a loan granted by the Biden administration to EV manufacturer Rivian, a competitor of Tesla. Ramaswamy, the founder of biotech firms known as the “Vants,” will lead the quasi-official Department of Government Efficiency (DOGE) once Trump is sworn in.

Rivian Loan Sparks Controversy

Ramaswamy has expressed concerns about the $6.6 billion loan, arguing that it implies a cost of $880,000 per job created. He suggests that this loan may be politically motivated to weaken Elon Musk and Tesla, who played a significant role in the Republicans’ recent electoral success.

DOGE’s Mission and Funding Targets

DOGE aims to reduce government size by slashing regulations, eliminating waste, and reducing federal employees. Ramaswamy and Musk have already identified spending earmarked for the Corporation for Public Broadcasting and Planned Parenthood as potential targets for cuts.

Biden Administration’s Rationale for the Loan

The Department of Energy states that the Advanced Technology Vehicles Manufacturing program, which provided the loan to Rivian, reinforces America’s automotive position. It cites the program’s success in catalyzing the EV industry, as exemplified by Tesla’s 2010 loan.

Considerations for Vehicle Plants

Ramaswamy’s calculation regarding the cost per job may be simplistic. Vehicle plants play a crucial role in supporting thousands of families with blue-collar jobs. They also sit at the apex of supply chains, stimulating job growth and contributing to community tax bases.

Saudi Arabia’s Interest in Rivian

Desperate to diversify its economy, Saudi Arabia has backed Tesla competitor Lucid, which is required to manufacture cars in the country. This investment has attracted subsequent investments from Hyundai and Pirelli.

Rivian’s Financial Challenges

Ramaswamy could have raised concerns about Rivian’s continued losses on a gross profit basis. This growth in losses alongside sales contradicts typical automaker practices of scaling businesses profitably.

Republican Skepticism of Clean Energy Aid

Republicans view government intervention in the clean energy sector with suspicion. They believe it interferes with free market principles, especially when fossil-fuel companies, often GOP donors, are affected.

Wall Street Journal’s Criticism

The conservative Wall Street Journal editorial board has also criticized the Rivian loan, arguing that it supports a struggling company competing in a well-established industry.

Incoming Administration’s Potential Response

Energy Secretary-designate Chris Wright is expected to review the Biden portfolio of corporate-welfare loans, removing those granted for political reasons and not based on market principles.