DAVID BLACKMON: Joe Biden’s Crony Capitalism Is About To Meet Its Demise

Seldom have a few days of energy-related news provided a clearer illustration of the stark contrasts between the crony-capitalism-based energy policies of the Biden administration and the American energy dominance…

David BlackmonDec 4, 20245 min read

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Seldom have a few days of energy-related news provided a clearer illustration of the stark contrasts between the crony-capitalism-based energy policies of the Biden administration and the American energy dominance policies to come during a second Trump administration as the news from the past week.

On Nov. 26, the Biden Department of Energy led by Secretary Jennifer Granholm announced an award of $6.6 billion to struggling electric vehicle maker Rivian in the form of a low-interest loan. The infusion of capital is designed to help the company finance a new Georgia-based plant with a production capacity of 400,000 cars per year. Rivian already operates a plant in Illinois capable of turning out 150,000 units annually.

So, what is the problem, you might ask? Well, first, Rivian — like every other U.S. EV maker other than Tesla — has consistently struggled financially. The company so badly missed its sales targets in 2023 that it was forced to discount prices and layoff workers to maintain its ability to service its existing debt load.

Second is the fact that Rivian has only managed to sell a little more than 37,000 units this year as U.S. consumer demand for EVs has stalled, at a financial loss of over $107,000 per car. This begs the question why a car company struggling to sell 50,000 units per year somehow needs the taxpayers to pony up $6.6 billion to raise its production capacity to 550,000 per year, or roughly 13 times its current annual sales.

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Third is the fact that Amazon, owned in large part by billionaire Jeff Bezos, is one of Rivian’s biggest investors. Bezos is currently listed as the world’s second-richest individual by Forbes, with a net worth of more than $226 billion. If pouring another $6.6 billion into Rivian is a terrific financial idea — as DOE claims — then why haven’t Amazon and/or Bezos been eager to do that?

The answer seems fairly obvious: This really isn’t a good financial idea at all. What is really happening here is the desperation last gasp of Biden era crony capitalism, shoving those billions of IRA dollars out the door before President-elect Donald Trump is sworn in and starts reining in the madness.

The day before DOE announced its award to Rivian, Trump announced plans to impose 25% tariffs on all imported goods from both Canada and Mexico if the governments in those countries do not immediately move to stop the flows of illegal immigrants and drugs across their borders with the United States. It is key to note that, when you talk about all goods coming in from Canada and Mexico, you are talking about America’s two biggest trading partners for crude oil. Canada is far and away the biggest exporter of oil into the United States, with Mexico ranking second on the list, well ahead of any OPEC nation.

The strategic objective behind announcing these tariff plans two months before being sworn into office was to give the governments of these two countries time to act quickly to slow the flows across their borders and commit to major reforms so the tariffs never have to be actually invoked. It is Trump exercising leverage in a negotiation, a skill that has made him a billionaire in his business life. It is a strategy Biden has never attempted to use related to the open borders the flow of deadly fentanyl that now kills more than 100,000 Americans annually.

Within 48 hours, Trump had held initial talks with socialist Mexican President Claudia Sheinbaum, reporting significant progress. Trump reported far more progress than Sheinbaum was willing to admit, another clear negotiating tactic.

By Friday, Nov. 29, Canadian Prime Minister Justin Trudeau was jetting down to Mar-a-Lago to hold talks with Trump on border reforms his government is willing to make to avoid the tariffs. Again, Trump is still seven weeks away from being sworn into office.

Joe Biden remains president, at least nominally, but the days of his crony capitalist approach to energy policy are running out fast, and will soon be displaced by a Trumpian return to American energy dominance. It is a change that cannot come soon enough.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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