Electric car-maker Rivian’s stock price collapse is a clear example of why Illinois politicians have no business trying to pick industry winners and losers. And so are the warnings of potential brownouts in downstate Illinois.
Start with companies. Back in November 2021, Gov. J.B. Pritzker signed the “Reimagining Electric Vehicles in Illinois Act,” a green energy bill that provided a series of subsidies and tax breaks to electric vehicle and parts manufacturers.
The law was quite clear in its intentions: “It is the intent of the General Assembly that Illinois should lead the nation in the production of electric vehicles. The General Assembly finds that, through investments in electric vehicle manufacturing, Illinois will be on the forefront of emerging technologies that are currently transforming the auto manufacturing industry.”
Lawmakers were counting on Illinois becoming an EV manufacturing powerhouse emerging around the Rivian plant in Normal, Illinois, as well as improved prospects for the Ford factory in South Chicago and the Stellantis plant near Rockford.
Rivian’s stock price grew rapidly, jumping 120% in the short time between the company going public (IPO price was $78) and the day before the bill was signed. On November 15, 2021, Rivian’s stock price hit a peak of $172.
It’s been all downhill from there. Today the carmaker’s stock price is down to just over $20, a drop of nearly 90 percent.
The automaker’s slide had a number of causes, starting with the fact that Rivian is a startup and all the risks that entails. There have been manufacturing issues, skyrocketing material costs and supply-chain problems. Not to mention the fact that the company lost out on even more potential subsidies when the federal Build Back Better bill died.
And then there’s all the bad news related to Ford. Last November, Rivian and Ford terminated a partnership to jointly develop a vehicle. More recently, Ford elected to dump 8 million shares of Rivian. On top of that, Ford manufactures the F-150 Lightning, a direct competitor to Rivian’s vehicles.
That’s not to say Rivian can’t one day be a market leader. Anything can happen. But the point is nobody knows – certainly not government bureaucrats. Pritzker and other Illinois lawmakers shouldn’t be gambling with taxpayer dollars based on an ideological whim.
Now to industries. Pritzker and his supermajorities have also bet the ranch on renewable energy, primarily wind and solar. Goodbye to all carbon-based energy – and even nuclear.
Under the green energy omnibus package the legislature passed last year, Illinois will have to have 50% of its electricity production from renewable sources by 2040 and 100% from clean energy sources by 2050. Sen. Don Harmon (D-Oak Park), called the bill “the most aggressive, most progressive climate bill in the nation.”
Reaching those goals will be exceptionally difficult and expensive. And according to the industry experts Wirepoints talked to, there’s no real plan for how to get there. In fact, Wirepoints FOIA’d the governor’s office for his plan to achieve “100% from clean energy sources by 2050.” We never got one.
The omnibus bill was simply the culmination of politicians’ long war on carbon-based energy – and coal in particular. Illinoisans may soon be dealing with the consequences of that war. Solar and wind have not kept pace with the capacity lost as fossil fuel plants have been shut down.
In fact, Melville Nickerson with NRG Energy warned during a recent Illinois House committee hearing of “the potential for rolling blackouts in central and southern Illinois” this summer.
Again, it’s hard to know how all this will play out. But once again, it’s Illinois bureaucrats making another bet, not only with taxpayer dollars, but with Illinoisans’ quality of life.
Fri, 05/13/2022 – 17:00
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Author: Tyler Durden