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

This page is a permanent link to the reply below and its nested replies. See all post replies »

jackjjackson · M

Tariffs will result in other countries buying more of our stuff and them paying us for access to the world’s best buying market. We come out ahead both ways.

wishforthenight

@jackjjackson You're absolutely right (as long as we ignore the whole retaliatory tariffs, higher prices for consumers, and disrupted global supply chains thing).

After all, economic principles can go hang when all you need to do is just slap tariffs on everything and magically have other countries pay for the privilege of doing business.

Genius!

jackjjackson · M

So far anyway tariffs have t produced the runaway inflation guaranteed by dems as they swirl down the drain. @wishforthenight

wishforthenight

@jackjjackson Ah, yes, because no runaway inflation at all means the system’s flawless, right? Tariffs are clearly the magic solution if you forget about all the supply chain issues and the fact that inflation is a global issue, not just a U.S. policy one.

jackjjackson · M

I can’t see why it would be impossible for us not to have some inflation. How much do we HAVE to buy abroad and pay full freight for if they do have inflation? @wishforthenight

wishforthenight

@jackjjackson OK right, the US can just stop buying anything from abroad and see how that works out. No global supply chains, no imports, job done!

If other countries have inflation, it totally won’t affect the US, right? You can just print more money to cover the difference. Easy fix!

jackjjackson · M

To what I wrote. For example a lot of fruit and clothing would be imported. So far the exporters are eating at least half of the tariffs. Realistically what else are they going to do with that stuff except sell it here? @wishforthenight

wishforthenight

@jackjjackson Sure, because exporters will totally keep absorbing tariffs indefinitely without raising prices or shifting costs. It’s not like businesses have to stay profitable or anything.

Eventually, though, they might have to pass those costs on, and that’s when the prices start going up for everyone.

jackjjackson · M

Possibly except same goes for the middlemen and the where else are they going to sell the stuff part. Also in some cases the making it here part which raises GNP resulting in higher income tax receipts. A lot of it comes down to the will of the US to change the dynamic which has resulted in the huge and getting huger deficit. I’m in favor of trying something new for awhile. It can’t be worse in the shorty term. @wishforthenight

SusanInFlorida · 31-35, F

@jackjjackson i'm all for higher incomes, and taxes paid on those incomes instead of welfare or "pandemic stimulus" while stores and factories are locked by government order.

every part in my cell phone, laptop, and tv came from behind the iron curtain. (china) i don't see how we can waive the tariff wand and magically change that overnight.

jackjjackson · M

Who else would they sell that stuff to if not us the world’s best buyers market? They and some middlemen have to eat way more than 75% of the tariffs. @SusanInFlorida