Lots of taxpayer-funded ventures that got billions of bribem/DOE loans to support EVs are failing

There are two broad kinds of economies: Free market, in which investment decisions are made by individuals and companies, and so-called "command economies," in which "winners"--companies that get government dollars and support--are chosen by politicians and bureaucrats.

Decades of experience have shown that despite totalitarian governments having all the power and money, command economies are terrible performers.

At one time the U.S. had a free market economy.  Most people think we still do, but in reality the government now picks who will get billions of dollars in "guaranteed loans."  But the people who make those decisions are often either bribed or incompetent, or under orders from the regime--either federal or state.

The result is that many of the companies the government gives millions to are shit.

Now: free markets are funded by investors, and they often make terrible decisions.  But at least the money at risk is theirs alone, rather than being extorted from taxpayers at gunpoint.  (And that's not hyperbole: the bribem regime gave 87,000 new IRS agents guns.)

The EV mania went exponential during bribem's reign, and his regime gave both grants and "government-guaranteed loans" totalling billions to companies that either couldn't have gotten a regular loan, or in some cases could have but wanted the lower interest rate of the govt-guaranteed loan.

A couple of Republican governors also jumped into showering taxpayer dollars or tax credits to attract EV companies.  One of the worst offenders was Georgia's nominal Republican governor Brian Kemp.  He's given hundreds of millions of dollars in incentives--all paid for by taxpayers.

I live in Georgia, and conservatives recognize Kemp as a clever, cunning grifter.

But state incentives are minor compared to the billions granted by bribem's Department of Energy.

When companies realize they can get vast amounts of government money, they quickly realize that their top goal is keeping the huge grants, incentives, and government-guaranteed loans coming in.

Problem was, aside from the usual fad-chasers and virtue signalers, most of the public didn't like the things.  But since virtually every car maker was making the damn things, there were now lots of 'em sitting unsold on dealer lots.  And that, in turn, made companies that had planned huge new plants to make the things suddenly cancel those plans.  So many of the government-funded EV-related are starting to fail.

And no state is more affected than Georgia.  A summary:

"Aspen Aerogels:"  In 2022 Massachusetts-based Aspen announced plans to build a huge (500,000 square feet) plant near Savannah to produce "thermal barriers to suppress EV fires."  They claimed it would create 250 jobs.

Predictably, Kemp threw taxpayer dollars at Aspen to incentivize it to build the plant
But that was minor compared to the $671
million federal loan awarded by bribem's DOE late last year.  That loan was part of a flurry of construction financing approved for "green energy"projects in the last few months of the bribem regime.

A week ago (Feb 13th) Aspen announced it was halting construction on the plant.

Turns out Aspen has never turned a profit, and in fact lost $187 million over the past four years.  But..."EVs beez SO cool," eh?
It's almost as if bribem's DOE and Brian Kemp don't bother looking at a company's past performance when deciding to give it millions in taxpayer money.

*****

"Freyr Battery:"  Founded in 2018. The CEO said the company would "decarbonize transportation systems by making the world’s most sustainable battery."  

Ah, a "sustainable battery" to store electricity produced by intermittent "green" sources (wind and solar).

The company planned a much-hyped $2.6 billion dollar plant in Georgia that it claimed would create 700 jobs.  The state *gave the company $7 million* to buy 368 acres near Atlanta.

Two weeks ago the company announced it was scrapping the plant.

A state spokesperson said the state and company are “working together to ensure the money is repaid expeditiously.”

Good luck getting the company to repay anything, ever: it's lost $173 million over the previous two full years. Its stock price has collapsed by 85% since its peak in 2022.

*****
"Rivian:"  This one has all the earmarks of a stock pump: one of the founding investors was Jeff Bezos, who owns Amazon.  And as soon as Bezos bought his stake, Amazon announced it had signed a contract to buy something like 174,000 of the company's electric delivery vans--none of which had been built or even designed completely.

Naturally when a company gets that huge a contract, the stock jumps.  And it did: overnight, Bezos's stake was worth $30 million more than it cost him.  Nice.

Now: Rivian already has a plant in Illinois with a capacity of 200,000 "units" per year.  But the company is only selling 50,000 a year.  So the idea of building a new plant in Georgia capable of turning out 400,000 more a year made no sense at all.

But in a "command economy" the decision to shower money on a company doesn't need to make sense.  In 2021 Brian Kemp gave Rivian over a billion dollars in state "incentives."  Then three years ago bribem's DOE gave Rivian a government-guaranteed loan of around $6.5 BILLION to build the new plant, which the company said would be building EVs by last year.

Nope.  Construction never even started.  So what did the company use the loan proceeds for, eh?  Sorry, we won't tell ya.  But with that much clout, you could guess that Rivian would have pressured the Democrat regime to "forgive" the loan, allowing the company to keep the money.

It's also interesting that the company has never made a profit, and lost $4.7 BILLION last year.  But the corrupt financial press *actually reported this loss as good news,* because it was $700 million LESS than the company's 2023 loss of $5.4 billion.

Wow, dat beez some GREAT PR clout, eh?

*****

"Novonix:"  In Tennessee this company has received a great deal of hype and taxpayer money for its promised role as a supplier of graphite to EV makers.

Graphite is pure carbon, like the toner in laser printers, and I don't know what role it would play in building EVs.  I suspect it's really to be used in the batteries, but that's not clear.  The company's website says it's “developing innovative, sustainable technologies and high-performance materials to service the electric vehicle and energy storage industries.”

The key words here being “is developing…” Production has always been at some date in the future. The current target date for full production is now 2028. Elsewhere on its website, Novonix states that it has a “proprietary synthetic graphite process” for which it is “currently scaling commercial production…”

It’s not altogether clear that the company even has a product yet.  But no matter:
While it's “developing” and “scaling,” just last April (2024) it got $103 million in tax credits from the government of Tennessee.  And then last December--just six days before Christmas--in the last-minute rush by the bribem regime to shovel billions out the door to favored recipients, the company got a DOE loan for a whopping $755 million.

That was interesting timing, as one month later (Jan 14, 2025) the company announced it was laying off 20% of its local workers, while asking the city council of Chattanooga for $54 million in "property tax incentives to support future growth."

The company constantly loses money.  Its stock has collapsed by 94% since peaking after its IPO in 2022.  Its accounting firm warns that there's "significant doubt" about the company's ability to continue as a going concern.”

All of the above decisions demonstrate the failure of command economies.  When awarding a grant or guaranteed loan for billions, the DeepState Democrat bureaucrats clearly don't pay attention to a company's past performance or competence.  Instead, when a bureaucrat is given the job of awarding two BILLION dollars to a company, does anyone really thing there's no input from the ruling politicians?

So bureaucrats and pols often--if not normally--select “winners” for bad reasons.  Of course investors in free-market economies also sometimes choose badly (though probably less often because corruption is less common--though by no means totally absent!).  

But in the free market the investors are the ones who lose their own money; you aren't required to pay for their loss.  By contrast, when government chooses companies to give money to, you're forced pay for defaulted loans and wasted grants. 

This should be taught in all schools.  But of course it won't be.  You might wonder why.

Source: Buck Throckmorton at Ace of Spades

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