U.S. House Speaker Mike Johnson became the latest ally of President-elect Donald Trump to express support for clawing back a $6 billion loan the federal government plans to offer Rivian to build its Georgia factory, along with other spending announced in the final weeks of President Joe Biden’s administration.
Johnson’s remarks Thursday came during a brief news conference on Capitol Hill as Republican legislators met with Elon Musk, the billionaire CEO of Rivian rival Tesla, and entrepreneur Vivek Ramaswamy about their plans to slash government spending. The pair have been tapped by Trump to co-lead a new Department of Government Efficiency, or DOGE, which has pledged dramatic cuts to federal programs.
Credit: AP
Credit: AP
Rivian applied for a loan from the U.S. Department of Energy two years ago. But days before Thanksgiving, the agency formally announced plans to award the California-based company a nearly $6 billion loan to resume construction of its electric vehicle factory planned about an hour east of Atlanta. Rivian has promised the EV plant will create 7,500 jobs.
In recent days, Ramaswamy has taken aim at the Rivian loan as a prime example of the kind of spending he and Musk want to rein in. Ramaswamy told CNN the Rivian loan is “high on the list of items” he wants DOGE to examine after Trump takes office.
Credit: TNS
Credit: TNS
On Thursday, after Musk and Ramaswamy walked past members of the press without answering questions, Johnson was asked by a reporter whether he supported revoking federal funds offered by the Biden administration, including the Rivian loan.
Johnson said he thought “big government Democrats” were spending money “recklessly” and added that there have been “discussions over the last couple of days about what our authority would be to claw some of that back and to stop it.”
The loan to Rivian has not been finalized and it is unclear whether it will be before Biden leaves office on Jan. 20. But loans like the one the Energy Department has committed to the company have been used to assist promising startups in the past, including Musk’s Tesla.
In 2010, before the company went public, the agency lent Tesla $465 million to build a factory in California. It took until 2020 before Tesla reported its first full-year profit, but the company repaid the loan. In the years since, Tesla has grown to become the most valuable car company on the planet and has helped make Musk its richest man.
Rivian did not immediately respond to a request for comment on Johnson’s remarks, but it’s CEO, RJ Scaringe, previously said the federal loan would “help create thousands of new American jobs and further strengthen U.S. leadership in EV manufacturing and technology.”
The Energy Department did not respond directly to Johnson’s comments, but said its loan commitments are “legally binding contracts.”
Jesse Lee, who previously worked in the Biden White House and is now a senior adviser with the communications group Climate Power, questioned whether the incoming Trump administration could revoke the loan, if it’s finalized.
“Just like with any contract, if one party tries to break it without cause, you end up in court,” Lee said. “You’re playing with fire when you start deciding that the federal government can just tear up contracts.”
Cox Enterprises, the owner of The Atlanta Journal-Constitution and Cox Automotive, also owns a 3% stake in Rivian.
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