Electric vehicle maker Rivian faces a treacherous future. It is something that state economic developers in Georgia should have recognized back in December 2021 before announcing a $1.5 billion incentive page to the fledgling company.
A modicum of due diligence would have revealed that established automakers -- with their established brands and dealer networks -- would be the only survivors due to their existing revenue streams from internal combustion engine vehicles.
In short, the legacy makers have a financial cushion whereas the EV startups, all of which are hemorrhaging billions, have no such fallback.
And that, dear reader, is why not one EV startup will survive long term.
And now we learn that Rivian plans to "pause" construction on its planned $5 billion Georgia plant.
In December 2021, Rivian and Gov. Brian Kemp announced plans to build the manufacturing complex. The Georgia Department of Economic Development, headed by Commissioner Pat Wilson, approved the $1.5 billion incentive package offered to Rivian. Wilson remains in that position today.
I believe the buck stops at the top. Both Kemp and Wilson and those who served under them in making this colossal blunder should be held responsible. If this were the private sector, heads would roll.
General Motors fired nine top executives at its self-driving vehicle unit, Cruise, in December amid the safety probe, including Chief Operating Officer Gil West.
Will such accountability happen in Georgia? Not likely.
The state and the Joint Development Authority of Jasper, Morgan, Newton & Walton Counties have invested more than $125 million in preparing the Stanton Springs North site for Rivian’s arrival. This investment includes land acquisition, tree clearing, and grading.
I can hear the defense now, the same thing I heard from economic developers in North Carolina when they awarded a $1 billion-plus incentive package to Vietnamese EV startup VinFast: "Well, at least we will have a ready site for someone else if this project doesn't happen."
Last month, Musk wrote on X that Rivian would go bankrupt in about six quarters on the current trajectory, adding, “They need to cut costs massively, and the exec team needs to live in the factory or they will die.”
"Postponing" the Georgia plant will save Rivian an estimated $2.5 billion, which I believe will only delay the inevitable demise of the company.
Prediction: Not one piece of steel will be erected on the Georgia site by Rivian because it will never have the financial resources to go through with the deal.
I'm now waiting for the other shoe to fall in North Carolina with VinFast. It will come. It will most assuredly come.
What's most ironic is that the economic development communities in Georgia and North Carolina are among the best in the nation. Both states have strong fundamentals for establishing manufacturing operations.
But that didn't prevent them from making blunders that taxpayers will bear. Shameful.
