The Biden administration said on Monday that it would lend $6 billion to help Rivian build an electric car factory in Georgia, part of an effort to lock in Democratic climate policies before President-elect Donald J. Trump takes office.
Rivian, a relatively new company that makes only electric vehicles, plans to produce sport utility vehicles and hatchbacks at the factory, in Social Circle, Ga., near Atlanta.
The loan agreement will be binding once the Department of Energy and Rivian sign a contract, which is expected to take place before Mr. Trump’s inauguration in January.
“Rivian will work closely with D.O.E. to close the loan quickly,” the company said in a statement.
The project is in a congressional district represented by a Republican, highlighting how much Biden administration clean energy policies have benefited regions where most voters back conservative politicians, including Mr. Trump.
Republicans have opposed use of federal money to promote electric cars, but some of them may be unwilling to interfere with projects that bring thousands of jobs and billions of dollars to their districts. In August, 18 Republican representatives sent a letter to Speaker Mike Johnson describing full repeal of the Inflation Reduction Act, President Biden’s signature climate law, as a “worst-case scenario.”
Attempts to disrupt the financing would probably also face opposition from carmakers. The Alliance for Automotive Innovation, a trade group, asked Mr. Trump not to roll back electric vehicle tax incentives in a letter this month.
Sales of such vehicles have fallen short of some projections, but still rose 11 percent in the third quarter compared with a year earlier, while sales of gasoline cars were flat, according to the research firm Cox Automotive. The Biden administration has offered tax credits of up to $7,500 and other incentives designed to ensure that half of all cars sold by 2030 are electric, up from 9 percent this year. Transportation is the largest source of greenhouse gases in the United States.
Mr. Trump and Republican allies in Congress have vowed to eliminate the incentives and other environmental policies that they say effectively force carmakers to sell electric vehicles that buyers do not want.
Rivian, which is backed by Amazon and other investors, will make a midsize S.U.V. and a hatchback at the factory. It will begin producing cars in 2028 and eventually employ 7,500 people, and 2,000 during construction, Rivian said.
The loan will be an important lifeline for Rivian, which is struggling to eke out profits selling vans to businesses and pickups and S.U.V.s to individuals. The Georgia factory will augment Rivian’s plant in Normal, Ill., and produce S.U.V.s that sell for about $45,000. The company’s existing consumer vehicles start at around $70,000.
“This loan will help create thousands of new American jobs and further strengthen U.S. leadership in E.V. manufacturing and technology,” R.J. Scaringe, the chief executive of Rivian, said in a statement.
Work on the Georgia plant had been on hold since March because of Rivian’s financial circumstances. The project has the support of Gov. Brian Kemp, a Republican, but has also been criticized by some Republicans who see it as a waste of government money that would change the rural character of the area near the factory site.
Rivian also received important support this month from Volkswagen. The companies formed a joint venture to develop software and electronics, extending a partnership announced in June. Volkswagen plans to invest $5.8 billion in the joint venture and Rivian.
Federal loans have long supported new technologies. Tesla received a $465 million loan in 2010 from the Obama administration to finance production of the Model S. Tesla and repaid the loan ahead of schedule three years later.
Elon Musk, Tesla’s chief executive and one of Mr. Trump’s biggest supporters, has backed the repeal of electric vehicle subsidies, saying that other automakers would suffer more than Tesla.
Federal loans and tax credits have also helped General Motors and Ford Motor build electric vehicle and battery factories and compete more effectively. Tesla’s share of the electric car market has fallen to less than 50 percent this year, from 60 percent in 2023.
“In my view, we should end all government subsidies, including those for E.V.s, oil and gas,” Mr. Musk said this month on X.
The Biden administration has lent almost $27 billion to support manufacturing of low-emission or zero-emission vehicles, including the Rivian project. The largest loan so far, $9.2 billion, went to Ford and SK On, which are building three battery factories in Tennessee and Kentucky.
The loans have created 50,000 jobs since Mr. Biden became president, Jigar Shah, director of the Energy Department’s Loan Programs Office, said. The money, he said in a statement, ensures that “the workers who have been a pillar of our nation’s economy for the past 100 years have the tools they need to thrive in the 21st century clean-energy economy.”
The loans carry interest rates comparable to what the federal government pays on Treasury notes.
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