China subsidizes its EV makers. Should the US do it too? (The lesson from Tesla)

Photo above - the 2025 Rivian R1S costs $106,000. Which may be why you see so few of them in the wild. Drivers' Ed 101 - please think twice about taking your Rivian EV on a road trip to Alaska - battery range is cut shockingly short by subzero temps.

How much economic advice should we take from a CEO whose company doesn't make money? The last time we did that, Tesla ended up scoring a $7,500 tax credit for each car sold, immediately propelling them from losses to profits. Are we happy with that decision now?

Today’s advice comes from R.J. Scaringe, CEO of EV maker Rivian. The company lost $1.2 billion in 2024, and $2 billion in 2023. They eked out a small profit in the first quarter of 2025. Before you cheer, let’s understand that Rivian only sold 52,000 vehicles in 2024, and expects to sell even less this year.

Some reader with a quick calculator may have already figured out that Rivian LOST $23,000 per vehicle last year. (Check my math). So, when Rivian wants to lecture us about “what’s wrong” with America’s EV industry, this should be taken with a grain of salt, no?

According Mr. Scaringe, China’s secret sauce is . . . government subsidies of their nation's EV cars. He doesn’t come right out and beg for US subsidies to Rivian, but what else could possibly be on his mind? Hey, Mr. Scaringe . . . we already installed umpteen thousands of public chargers at government expense. Because someone said "range anxiety" was the problem. Now you want us to hand even MORE money directly to your corporate treasurer?

Rivian Automotive Inc went public in 2021 at $128 a share. Those shares are down 90% today, at $13.XX. The investment community renders a new verdict on every corporation at the close of each trading day. Thowing tax money at corporations which chronically underperform is NOT going to rehabilitate the falling reputation of capitalism. No more subsides, whether that company is named Tesla, Rivian, Ford, or GM. (I'm not a fan of tariffs either). Automakers should live or die based on their product lineup and pricing. Otherwise they have no incentive to get it right.

Rivian CEO Scaringe really nails it halfway through his Business Insider magazine interview, though. He admits that Rivian – and every other EV company in America – will NEVER be able to compete with China because of wages/assembly cost. The average Chinese car assembly line worker makes 100,000 yuan ($12,000 USD) a year. That’s 10% of what America pays UAW workers – before pension benefits, healthcare, overtime, etc. There’s no way handing out free taxpayer money to Rivian or Ford or Chevrolet is EVER going to bridge that chasm.

In fact, if the government does give taxpayer dollars to EV manufacturers, they’re still going to lose money, and we’re simply subsidizing the salaries of those $140,000 a year union guys wielding screwdrivers and pliers.

Sorry Mr. Scaringe (and any other EV fanboy readers who want their toys subsidized) - if you want to compete with China, you’ll have to do it with automation and robots. Not with handouts to people already making double what the average US worker earns.

I’m just sayin’ . . .

Rivian CEO says Chinese EV makers aren't doing something 'magical' to achieve cheaper vehicles

Automotive Worker Salary in China (2025) - SalaryExpert

Rivian Releases First Quarter 2025 Financial Results - Newsroom - Rivian

Avectoijesuismoi · 36-40

I have a Rivian RS1 it is nice vehicle, it is not so bad actually good value at $106 000 for what you are getting packed into the vehicle as extra's. It is good car as a little runaround for carting little one around as it has tons of space and lots of useful extras like the built-in air compressor to inflate the inflatable toys for the beach or pool, has a Bluetooth speaker so you can take the music with you, their is a foldout electric stove that plugs into the car so you can cook, the frunk can be a big ice box to keep the champagne drinks and other things chilled, loads of cameras and sensors. Even one that tells you that the dog is comfortable. The cabin is spacious and can carry 7 .

whowasthatmaskedman · 70-79, M

An industry that is pushing the envelope with new technology is entitled to a temporary hand up from the government. Particularly if its an export earner..This is very much the case in China.😷

SunshineGirl · 36-40, F

China has used that subsidy to mass produce small, affordable vehicles that are transforming the EV market not just in China but in nations they export to. Would America do the same, or would public subsidy be wasted in shareholder dividends?