Rivian might have paid a huge price for its $6 billion DoE loan
Yesterday at 11:42 AM
Rivian Automotive may end up paying a huge price for its $6 billion loan from the U.S. Department of Energy.
As per recent reports, Rivian appears to have agreed to terms that lean heavily towards unionization to secure its high-profile DoE loan.
Strings Attached:
- In September, President Joe Biden issued an order directing agencies to prioritize projects that promote "positive labor-management relations" with "agreements designed to facilitate first collective bargaining agreements, voluntary union recognition, and neutrality by the employer with respect to union organizing," as noted in a report from The Wall Street Journal.
- Rivian has reportedly entered into a neutrality agreement with the United Auto Workers (UAW), as noted in a Bloomberg News report. With the agreement in place, Rivian will not oppose unionization at its Illinois plant once certain profitability benchmarks are met.
- Ford also agreed to a similar neutrality agreement with the UAW for its Tennessee EV plant. The DoE recently gave Ford-SK On a $9.6 billion loan for their battery venture.
Between the Lines:
- The union push could exacerbate Rivian’s financial difficulties, with the company currently losing $107,043 per vehicle sold. Rivian currently faces challenges against profitable, non-unionized competitors such as Tesla.
- Rivian anticipates profitability through EV credit sales, but this strategy might falter if the incoming Trump administration modifies EV mandates.
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