Rivian unplugged.

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DAILY ENERGY NEWS | 08/06/2025

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Regulatory credits and Chinese inputs are a tough business model.

Reuters (8/5/25) reports: "Rivian Automotive reported a higher-than-expected quarterly loss on Tuesday as disruption in supply of rare earth metals used to make parts of its electric vehicles raised costs and income from credits sold to traditional automakers dwindled. Shares of the automaker fell nearly 5% in trading after the bell. China's curbs on the export of heavy rare earth metals —essential components for motors — sharply increased material costs and disrupted supply chains, driving up the cost of EV production in the U.S. Rivian's cost of revenue for each vehicle produced rose about 8% to $118,375 per unit sold from a year earlier, according to Reuters calculations... Rivian also flagged a bigger adjusted core loss this year, expecting it to be between $2 billion and $2.25 billion, compared with $1.7 billion to $1.9 billion previously forecast. The company largely blamed a tapering in the value of U.S. regulatory credits for the higher loss estimate. The elimination of penalties for automakers not meeting fuel economy standards by President Donald Trump's administration has drastically reduced demand for regulatory credits, which companies like Rivian previously sold to traditional automakers to help them avoid emissions fines."

"Because 'energy dominance' is a slogan, it is ill-defined and leads to confusion even (or especially) among the policymakers who believe in it most strongly. It would be far better for the administration to specify its goals clearly: far fewer regulatory burdens on the discovery, investment, production, and transport of efficient energy; fewer subsidies and other subventions for inefficient and unreliable sources of energy; and a far greater reliance on market forces."

– B enjamin Zycher, American Enterprise Institute

The Times Are A-Changin'.

RealClearEnergy (8/5/25) op-ed: "The 'One Big Beautiful Bill' (OBBB), which Trump signed into law this past July torpedoes what Tom Pyle, president of the Institute for Energy Research (IER), calls 'market distorting subsidies' for wind and solar projects. This move alone represents a sharp pivot away from the Biden-era policies that penalized domestic oil and gas production while artificially pumping up green energy projects that can’t stand on their own two feet... 'What’s important to know is that all of the IRA programs that were directed toward renewables and wind and solar, and batteries and so forth, are sunsetting by December 2028,' he said in an interview. 'The programs end and that matters because when they completely expire it’s going to take a lot more effort to renew and revive them. This gives folks who care about markets, and affordability, and reliability of electricity, a leg up in the battle, and the debate.'”

Energy has always been parallel to all other industries, but point taken.

Utility Dive (7/27/25) reports: "The convergence between oil, technology and utilities reflects a profound structural shift — energy and computing are no longer parallel industries but mutually dependent pillars of modern innovation. The promise, peril and possibilities of artificial intelligence continue to capture the cultural and business zeitgeist worldwide. Hardly a conference or long-form interview can be held these days without a panelist or pundit commenting on the technology’s implications for their profession. Yet despite being the hottest topic in every circle, AI’s ultimate challenge isn’t technological but physical. After years of breathless speculation and prediction, the issue remains the same: AI needs more energy. Amidst this backdrop, the oil and gas industry faces a similarly fundamental challenge: a shifting production frontier and evolving path to continued growth... The pairing makes increasing sense. While initially circling one another warily, major players in energy and technology have become increasingly intertwined."