Elon Musk Isn’t Invited to Biden’s $1 Billion EV Loan Party

Looks like Biden’s handing out cash again, but this time, Elon and buddies over at Tesla (and his rivals at Rivian) are left standing outside, noses pressed against the glass. 

Instead, the Biden administration is cutting checks for the little guys—small and medium-sized auto suppliers who’ve been quietly cranking out parts in the shadows. (You know, the ones you probably wouldn’t even notice unless their parts started falling off your car.)

Monroe Capital LLC is stepping up with a fresh $1 billion fund aimed at helping smaller auto suppliers transition from making gasoline-powered parts to those for electric vehicles. According to the White House, this move is supposed to “facilitate access to lower cost capital” and keep the lights on for over 250,000 people who work in these smaller shops.

Oh, and if that wasn’t enough to make Monroe feel like the Robin Hood of auto financing, the U.S. Treasury also chipped in a $9.1 million grant for the Michigan Auto Supplier Transition Program. Yeah, it’s a mouthful, but the goal’s simple: help smaller firms secure the financing they need to start cranking out EV parts before the big companies come in and snap up all the contracts.

All this is happening while EV sales in the U.S. are… let’s just say, not exactly electric. Sure, EV sales have grown—from 65,000 in 2017 to over 1.4 million in 2023—but 2024 isn’t seeing the same momentum. In the first half of this year, EV sales rose by just 7.3%, a sharp slowdown compared to the 51% growth seen in early 2023. 

(Source: Business Insider)

Tesla, the market leader, isn’t immune to the slowdown either. Its stock is down 4% year-to-date, with its market share dipping below 50%, and Q2 earnings hitting a two-year low. Rivian is faring even worse, with earnings missing expectations and its stock plummeting 44% year-to-date.

So, why are we still dragging our feet on EV adoption? Well, first off, (as you know) these things aren’t cheap. In 2023, the average price of an EV was still over $53,000, while the typical American household brings in around $70,000 a year. Sure, that’s a $7,000 drop from 2022, but let's be real—those numbers still don't add up for most families. Even with government subsidies, you’re looking at a car payment that'll have you living on ramen and PB&J for the next five years.

Then there’s the whole charging situation. Let’s be real—if you don’t have a home charger, good luck. Public charging stations? They’re about as reliable as my flaky friend who’s always “running late.” And the ones that do work? Be ready to wait because charging your EV takes hours, not minutes. Ain’t nobody got time for that.

Biden’s got big plans to fix that, though. He’s aiming to build 500,000 public chargers by 2030. Will that solve all our problems? Who knows. But at least Monroe’s $1 billion fund might keep some of these smaller auto suppliers afloat while the EV world tries to figure it out.

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Stock.News has positions in Tesla.