Newly appointed government efficiency co-czar Vivek Ramaswamy says he will scrutinize a loan issued by the Biden administration to electric vehicle (EV) manufacturer Rivian, a rival of Tesla Inc. (NASDAQ:TSLA).
What Happened: Ramaswamy, a biotech entrepreneur, will lead the Department of Government Efficiency (DOGE) alongside Tesla CEO Elon Musk following President-elect Donald Trump's inauguration.
Ramaswamy recently criticized President Joe Biden administration for approving a $6.6 billion loan to Rivian for a Georgia plant construction, which has since been suspended. He questioned the high cost per job created by this loan and suggested it could be a political move against Musk and Tesla, reports Fortune.
The Department of Energy defended the loan, highlighting their Advanced Technology Vehicles Manufacturing program's role in reinforcing America's global automotive standing. They pointed to the successful loan granted to Tesla in 2010 as evidence of the program's efficacy.
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Ramaswamy's critique of the loan comes amid concerns about Rivian's financial stability. Despite its reputation as a high-end EV brand with a growing lineup of award-winning vehicles, Rivian has yet to turn a profit.
The company is currently working to streamline its production process and aims to generate a gross profit in the current fourth quarter.
Why It Matters: Ramaswamy's scrutiny of the loan to Rivian underscores the ongoing debate about government involvement in the EV market.
The loan's approval has raised questions about the government's role in supporting emerging industries and the potential political motivations behind such decisions.
This scrutiny comes at a critical time for Rivian, which is working to establish its profitability amidst growing competition in the EV market.
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
