THE MORNING RANT - EV Death Pool Update: Rivian Puts Halt to Georgia Plant; Fisker Circling the Drain

Governor Brian Kemp’s Parkway to Nowhere

As I’ve been documenting over the past few years, there has been no easier mark for electric vehicle hustlers than Georgia Governor Brian Kemp (R). He has repeatedly thrown outrageous amounts of taxpayer money at pie-in-the-sky EV and battery ventures. He embraced the eco-communists’ vision of a world without gasoline-powered cars, and to paraphrase Nikita Khrushchev, Brian Kemp wanted Georgia to become the premier manufacturer of the electric ropes with which western civilization would be hung.

Rivian has been Gov. Kemp’s largest and most visibly bad communist public-private investment – a boondoggle for which he pledged $1.5 billion of Georgia taxpayer money. The state has already condemned the land, graded it, turned the land over to Rivian, and spent tens of millions of dollars on roadways for the project. Rivian is a start-up with neither a customer base, nor any historical manufacturing experience. It not only hemorrhages cash, but it suffers a gross loss of tens of thousands of dollars on every vehicle it sells. There is no pathway to profitability for it. Like a dot-com company from 25 years ago, its financial performance is measured in its cash-burn rate. Rivian already has a plant in Illinois with a manufacturing capacity of 150,000 units per year, but it can only sell about a third of that.

This announcement has been inevitable for quite some time:

“Automaker Rivian pauses construction of its $5 billion electric truck plant in Georgia” [AP – 3/07/2024]

The CEO of Rivian Automotive announced Thursday that the electric truck maker is pausing construction of its $5 billion manufacturing plant in Georgia to speed production and save money.

It would also save $2.25 billion in capital spending for now, Rivian said in a news release. The company has been burning through accumulated cash quickly, even as it hasn’t met production targets at its Illinois plant.

Rivian did not give a timetable for restarting work on the Georgia plant, saying in a statement: “The timing for resuming construction is expected to be later.”

I can help out here regarding the timetable for Rivian’s Georgia plant - it will never be built.

Like a degenerate gambler who has just put the deed to his house on the table because he knows his luck is about to turn around, Gov. Kemp is still confident about this awful EV gamble.

“Kemp: Rivian and Georgia remain 'committed' to $5B manufacturing plant” [Fox5 Atlanta – 3/13/2024]

At a press conference on Tuesday, Kemp addressed the automaker's announcement for the first time, saying that Rivian's decision was "disappointing" but that the state was still optimistic about the deal. "What they've relayed to me is that there is no doubt here. We're under contract with them. The state is in a really good place," he said.

To be fair, the state is in a better place than it would have been had construction started before Rivian goes out of business. This way, there will not be any demolition required for whatever future purpose is found for this land.

Still, Kemp remained positive that construction would continue on schedule. "They can still meet the metrics that they have to under our contract obligations by 2030," Kemp said, "We honor our commitments in our state, and we're going to do that in regards to the site, and we're expecting the company to honor their commitments as well."

This last sentence (below) made me smile. Someone at the state’s highway department understands better than the Governor himself that the Rivian misadventure is now winding down.

The state also has completed most of the $50 million in roadwork that it pledged. But signs for Rivian Parkway at a new traffic signal on U.S. 278 had been removed as of last week.

I might suggest that Rivian Parkway be renamed “Governor Kemp’s Parkway to Nowhere.”

Fisker Is Going Bankrupt – Again

While Rivian is the most prominent of the failing EV start-ups, it looks like Fisker is going to go out of business before Rivian does.

“Electric-Vehicle Startup Fisker Prepares for Possible Bankruptcy Filing” [WSJ – 3/13/2024]

Fisker, which recently warned that it risked running out of cash this year, hired financial adviser FTI Consulting and the law firm Davis Polk to work on a potential filing, the people said. The car company reported last month that it had $273 million in sales last year and more than $1 billion in debt. Fisker last month issued a so-called going-concern warning that there was “substantial doubt” about its ability to stay in business.

This will be Henrik Fisker’s second visit to bankruptcy court with an electric vehicle startup. He had a previous EV venture (“Fisker Automotive”) that went bankrupt in 2013, yet there was such a voracious appetite from suckers investors during the EV bubble, that Fisker was able to successfully fleece the EV true believers a second time. Fisker, Inc. went public in 2020 and achieved a market capitalization of $6 billion. Fisker’s 40% ownership made his shares worth $2.4 billion at the time.

“Fleece” may actually be too polite a word. In 2021, Fisker’s investors bought him a $21 million mansion in the Hollywood Hills.

As their fortune balloons, it’s no secret that the Fiskers have been living primarily in Los Angeles, where Fisker Inc. is headquartered. Since 2019, the couple has leased a house on Sunset Plaza Drive in the Hollywood Hills; now, records reveal they’ve opted to buy a lavish mansion in the same area.

Fortunately for the Fisker family, Henrik had the foresight to start selling Fisker stock before its price collapsed. Coincidentally enough, he sold $20 million worth of stock right about the time he was buying the $21 million mansion in Hollywood Hills. The stock he sold at $9.50 per share is now worth 15 cents per share.

If Mr. Fisker would like to make yet another EV fortune - before going bankrupt a third time - all he has to do is fly to Georgia and purr into Brian Kemp’s ear “EVs, Jobs” and Gov. Kemp will almost certainly start throwing billions of Georgia taxpayer dollars at Mr. Fisker.

Time to Put Team EV on Defense

My latest piece has been published at The Pipeline.

In it I argue that despite the failure of the “EV transition” to date, the left and the EV evangelists are not going to back off from their quest to ban gasoline-powered cars, so we should respond in kind and put them on the defensive by implementing laws and regulations that effectively ban their precious EVs. I have a list of suggestions for red states and President Trump, which include requiring a giant warning label on the hood of every EV cautioning that foreign slaves and child labor were used to source the rare earth minerals in the car.

As to whether this conflicts with our conservative, free market principles, I point out that, “There really is no conflict at all because there is a greater principle in play – when my property, safety, or freedom are attacked, I may respond in a manner that I otherwise wouldn’t have if I had simply been left alone.”

The critical point is that we begged the left and its passionate EV fanboys to leave us and our gasoline powered cars alone. They wouldn’t.

Begging our adversaries to just leave us alone hasn’t worked. Let them beg us to leave them alone. Only then should we consider allowing them to keep their E.V.s. -- for a price.

My latest at The Pipeline: “Time to Put Team EV on Defense” argues that despite the initial failure of “the EV transition,” the left still wants to ban our gas cars. Thus we must now retaliate & make the fight about them saving their precious EVs.https://t.co/wVry9HXJ6L

— Buck Throckmorton (@BuckThrockmort) March 14, 2024

I’d be honored if you’d give it a read.

*Breaking News* - Hertz’s Woke, EV-Loving CEO Just Resigned

This news just broke over the weekend, Hertz’s CEO, Stephen Scherr, has just stepped down as CEO after his destructive tenure at Hertz. He committed big to EVs and cost the company a fortune with that awful decision, before being forced to backtrack and start dumping the fleet of hated EVs, causing the company to take a $245 million hit for his virtuously inept management.

It was just one month ago I wrote the following:

With Hertz being mismanaged by a CEO who does not understand either his product or his customers, you will not be surprised to learn that Hertz stock has fallen by more than 60% in the past year, from $20 to less than $8 per share.

I will have much more to write about Stephen Scherr and the Hertz lesson in the near future.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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