Welcome back to Critical Materials, your daily roundup for all things electric and automotive tech. Today, we’re chatting about Rivian’s new $6.6 billion loan to kick-start its new factory, federal mandates on safety tech, and the ongoing tariff battle in the EU. Let’s jump in.
30%: Rivian Gets $6.6 Billion Federal Loan For Georgia Factory
Photo by: InsideEVs
Rivian’s goal to become a household name is being supercharged thanks to the awarding of a $6.6 billion grant from the U.S. Department of Energy’s—stay with me here—Loan Programs Office Advanced Technology Vehicle Manufacturing Loan Program. The EV startup announced late Monday night that it has received conditional approval for the loan which it plans to use as the funding source to restart construction on its new $5 billion manufacturing plant in Georgia.
Here’s what Rivian has to say about its loan:
If finalized, the loan would support the construction of Rivian’s next facility in Stanton Springs North, near the city of Social Circle, Georgia, substantially expanding the company’s domestic production capacity to support demand from the United States and international markets.
This loan from DOE would provide significant funding for production of the company’s midsize platform, which underpins the R2, a midsize SUV, and the R3/R3X, a midsize crossover. Designed, engineered, and built in America to deliver an incredible combination of capability, function, performance, and pricing, Rivian believes its R2 and R3 vehicle lines will be critical drivers in the company’s long-term growth and profitability.
The DOE loan would provide an important boost to the U.S. automotive industrial base, enabling significant job creation and investment that is important for the United States to maintain its leadership as electric vehicles become a strategically important industry.
Specifically, the loan would enable Rivian to press play on the factory by 2028, kicking off the first phase of vehicle production with an annual output of an estimated 200,000 vehicles per year—or around four times the number of vehicles it sold in 2023. The second phase will kick off the production of another 200,000 vehicles, bringing the total annual output of the Georgia plant to 400,000 vehicles and the number of jobs needed to sustain the production to 7,500.
Other companies to be awarded loans as part of the DOE’s funding process are Tesla, Ford (in its joint venture with SK), and Redwood Materials.
You might have already put this together, but this loan is the key for Rivian to solidify the future of the brand. Skeptics have wondered if Rivian had enough cash (and drive) to stick out the critical launch of the R2 and R3—this loan will certainly help with the brand’s cash crunch and potentially enable Rivian to see if it can thrive with a great product. Fortunately for Rivian, the brand has already seen an influx of buyers ditching their Teslas over the antics of its CEO, so the demand appears to be there for the R2’s inevitable launch.
For now, Georgia is a beacon of hope for Rivian—a real one, at that. It’s a glimpse of what could be and the approval for the loan should put investors, fans, and the auto industry a bit at ease to know that the U.S. government is still supporting EV companies amid a rocky political climate. And if Rivian can play this fiddle just right, it might just outplay its own cash-laden devils.
60%: Feds Won’t Budge On Automatic Emergency Braking
Photo by: Tesla
Self-driving tech is all the rage right now. Automakers are touting it as a miracle for vehicle safety, and the industry simply can’t light cash on fire fast enough to be the first company to solve the problem. However, when it comes to government mandates on safety tech? Well, that makes those very same companies throw an absolute tantrum.
The latest flare-up has been around the National Highway Traffic Safety Administration’s proposal to require all new cars to be equipped with Automatic Emergency Braking. This controversial topic has been hounded by the auto industry—but Uncle Sam refuses to pump the brakes on the would-be mandate and will push forward with the requirement after all.
Automakers aren’t arguing about whether or not cars should have AEB or not. Most of them already agreed to make it a standard feature back in 2016. The issue comes with measurable performance goals established by the feds after Congress directed NHTSA to evaluate and establish minimum performance criteria for certain safety features like AEB in 2021. This includes avoiding collisions at speeds up to 62 miles per hour and also recognizing (and avoiding) pedestrians at night.
The Alliance for Automotive Innovation—an industry trade group that represents heavy hitters in the auto industry like Ford, GM, Stellantis, Toyota, and just about everyone else—even said that requiring all cars to have AEB up to 62 MPH was “practically impossible with available technology.”
NHTSA still believes that the move is the right way to go. The feds say that the mandate will help to save at least 360 lives and prevent at least 24,000 injuries each year by the time it goes into effect in 2028.
90%: False Hope: Europe And China Aren’t Even Close To A Tariff Deal
Europe and China have been deep in negotiations over EV tariffs. Both sides are bringing their best negotiators to the table with Europe fighting over what could happen to their automotive industry should a wave of cheap Chinese EVs crash into the bloc, and China arguing for their right to free trade.
Last week, news outlets learned through a reputable source that the EU and China were supposedly close to an agreement that would resolve an ongoing tariff dispute between the two parties. However, EU officials revealed that behind the curtain, the two competing countries are essentially at a stalemate with little progress being made and no short-term solution in sight.
From Reuters:
Bernd Lange, chairman of the European Parliament’s trade committee, told a German broadcaster on Friday that an agreement between the 27-nation EU and China to replace the tariffs with something else was close.
But EU officials, who asked not to be named because of the sensitivity of the talks with Beijing said this was not correct, because while the talks were continuing, there were still stumbling blocks that prevented a deal.
China is pretty pissed right now. The country has invested billions into becoming an EV manufacturing powerhouse, and EV makers are pumping out sub-$20,000 EVs with ease. But, as the EU argues, China’s automakers are able to do that thanks to “unfair subsidization” which put the auto industry in the Germany, Italy, and other bloc members at risk. If domestic players are unable to compete with costs—especially labor-related expenses—China’s wave of affordable EVs will drown the competition. And that could wreak havoc on one of the EU’s biggest industries.
Enter tariffs: the protectionist measure meant to artificially inflate the cost of imported cars to ensure they are competing in a similar price bracket to the EU’s domestic offerings. The U.S. and Canada recently slapped China with additional import tariffs tallying 100%. However, the EU only added extra tariffs of up to 35.5%—but it’s under fire because it unevenly applied these duty fees across the industry based on how willing car makers were cooperating in an investigation into subsidies.
China has since threatened to slap the EU with retaliatory tariffs on goods like pork, wine, and other luxury items, meaning that other industries could suffer to protect the cars.
That all being said, the standoff over tariffs continues. The EU is wrestling with the struggle of how to protect car brands under its protection while China wants its own shot to expand its footprint as an automotive powerhouse beyond its borders. For the public, this should serve as a snapshot of something bigger: the world sees the shift to EVs happening and whatever players dominate the market early will have a significant advantage in the long run.
100%: What In-Car Feature Can You Not Live Without?
Photo by: YouTube
While the feds are fighting the battle for safety features like AEB, I started thinking about what other in-car features have spread like wildfire across the industry. We’re not just talking about gimmicky things like light-up emblems or gigantic TV-sized touch screens. There have been significant advancements in quality-of-life features across new cars over the past decade.
Some might argue for Apple CarPlay and Android Auto; the auto industry might not agree. Others will say ADAS systems with great lane keeping (I know that a great-performing system is on my checklist). Or, how about phone-as-a-key? So many options.
So now I need to know your pick: what is the must-have feature in any new car? Let me know in the comments.
Credit : insideevs.com