Rise & fall of a government Unicorn

Can it rise again?
"In this unfortunate era of industrial policy, it’s good to be a
politically favored company no matter your commercial prospects.
Consider the Biden Energy Department’s stunning $6 billion loan to
struggling Rivian Automotive to make electric vehicles.
We had fun calling Rivian a “government unicorn” three years ago when it
went public and surged to a fantastic $120 billion market valuation.
Rivian at the time had sold a mere 156 vehicles despite being in
business for 12 years. Its shares are now worth $11.8 billion.
Investors may have been betting on government subsidies supercharging
Rivian’s growth, and they can’t blame the Biden Administration for not
delivering. The Inflation Reduction Act includes a $7,500 tax credit per
vehicle for EV buyers, plus a $40,000 credit for commercial EVs. The
latter is a particular boon for Amazon, that corporate pauper, which
owns shares representing 14.8% of Rivian’s voting power and has agreed
to buy up to 100,000 of its delivery vans. The IRA also includes hefty
subsidies for domestic battery production.
Despite these giant subsidies, Rivian lost about $4 billion on the
37,396 vehicles it has sold during the first nine months of this year.
That’s $107,043 a vehicle. Ford loses only about $51,000 on each EV
sold.
But unlike traditional auto makers, Rivian can’t use profits from
gas-powered cars to subsidize EVs. Thus the company is rapidly burning
through cash. It has suffered repeated assembly disruptions and had to
recall vehicles to fix defects. It has $1.25 billion in debt due in
2026, so its current spending pace is problematic.
Enter the Biden DOE, which on Monday awarded Rivian the $6 billion loan
to build a factory in Georgia with the capacity to make 400,000 SUVs and
crossovers. This follows Illinois Gov. J.B. Pritzker’s pledge this
spring of $827 million in state “incentives” for Rivian to expand
production at an Illinois plant to 215,000 vehicles a year.
They believe in an EV field of dreams. But even if Rivian scales up and
builds all these EVs, there’s no guarantee someone will buy them."
https://www.wsj.com/opinion/biden-tosses-rivian-a-6-billion-lifeline-dfdce139