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Pritzker Doubles-Down With $827 Million Taxpayer Handout To Troubled EV-Maker Rivian

• https://www.zerohedge.com, by Mark Glennon

Gov. JB Pritzker announced Thursday that the State of Illinois will provide an $827 million incentive package for Rivian to invest $1.5 billion to expand its electric vehicle factory in Normal, Illinois. The expansion is expected to create at least 550 full-time jobs within the next five years, and will build Rivian's next model EV, the R2. Rivian initially got $49.5 million under Gov. Bruce Rauner in 2017 to create 1,000 jobs at the same location.

The new deal gives $1.5 million per job created, which is astronomical in the world of location incentives. Estimated average location incentives paid by state and local governments around the nation range from $13,000 to $84,000 per job, though sometimes go as high as $100,000 per job for capital intensive projects. Even using that high end, Rivian's package will be 15 times what's typical.

Moreover, Rivian is on shaky wheels, along with the rest of the U.S. EV industry. Rivian loses over $43,000 for every vehicle it sells and has had two rounds of layoffs this year. The decision to move its R2 production to Illinois is a further reflection of the company's need to preserve cash. R2 production was initially planned for a new $5 billion plant in Georgia, heavily subsidized by the state. But Rivian concluded that moving production to the existing Illinois facility would save cash.

Its stock price has consequently been hammered. It reached a high of $172 per share in 2021 but now trades at less than $10 per share.

Rivian is not alone. As a CNBC headline recently declared, "EV euphoria is dead. Automakers are scaling back or delaying their electric vehicle plans." Since then, the news is no better. Ford announced last week that it is losing a stunning $132,000 per vehicle. Hertz announced last week a second round of sales of its EV fleet due to heavy maintenance and depreciation costs. For the first quarter of this year, EV sales continued to slow and the share of EV sales for all autos actually decreased. While total EV sales are still up a bit from last year, the growth rate is not nearly enough to put EV makers on a path to profitability.

EV makers pin their hopes on less expensive models that they promise soon, and on more public charging stations, into which Illinois last month announced it would invest an additional $50 million. Rivian hopes its new R2 will be among the new, lower priced models. However, its starting price is expected to be about $45,000 and it won't come out until the first half of 2026.