Marc Joffe
Marc Joffe
Electric vehicle marker Rivian is struggling to make cars and earn a profit, but it has proven adept at winning subsidy and tax credit packages from governments around the country. If the company cannot reverse its financial fortunes, it could go under before it uses all the incentives it has been offered.
According to Good Jobs First’s Subsidy Tracker, Rivian has gotten incentive packages from four states with an aggregate value of over $2.3 billion since 2016. The company started small, receiving $1.72 million from the Michigan Business Development Program to set up its corporate headquarters in Livonia, Michigan, and hire up to 170 employees. It later moved to the nearby city of Plymouth, Michigan, before transferring its headquarters out of state to Irvine, California.
In California, Rivian tried to obtain a $16.8 million California Competes Grant but was thwarted when two union representatives and a Rivian employee testified against it at a hearing of the committee overseeing the program. The employee complained of long hours, mandatory overtime, and frequent scheduling changes at the company’s Normal, Illinois, plant.
Rivian has also won $4.2 million of grant commitments in the state of Kentucky, where it has promised to “invest $10 million to establish a remanufacturing facility in Bullitt County, creating 218 full-time, quality jobs,” according to a press release from Governor Andy Beshear.
But Rivian obtained far bigger incentive packages from Georgia and Illinois. As discussed in my policy analysis “Reforming State and Local Economic Development Subsidies,” coauthored with Scott Lincicome and Krit Chanwong, Rivian obtained almost $1.5 billion in state and local incentives to build an electric vehicle plant in Stanton Springs, Georgia, that was supposed to open this year.
Hailing the deal at the end of 2021, Georgia Governor Brian Kemp said:
Rivian’s investment—the single largest in state history—represents the future of automotive manufacturing and establishes the leading role the Peach State will play in this booming industry for generations to come. » Read More
https://www.cato.org/blog/will-rivian-automotive-last-long-enough-use-all-its-state-subsidies