MW Rivian and Plug Power close government loan deals just before Trump takes office

By Tomi Kilgore

The Energy Department loan guarantees for the clean-energy companies should be safe after Inauguration Day, Truist's Jordan Levy writes

Just in time, clean-energy companies Rivian Automotive Inc. and Plug Power Inc. have closed loan agreements with the Biden administration that will fund the construction of manufacturing plants in the United States.

The total of $8.3 billion in loan guarantees from the Energy Department had been expected to be pushed through before Inauguration Day, and the stocks of the companies had rallied ahead of the announcements late Thursday. Still, there had been some worries that the incoming Trump administration might have blocked the deals.

"With this finalization reached, we'd expect the loan guarantee to be safe barring any unprecedented actions from [the Trump administration]," Truist analyst Jordan Levy wrote in a note about Plug Power.

For Rivian, "we'd assume the loan guarantee is safe barring something very unexpected," he wrote.

Shares of electric-vehicle maker Rivian $(RIVN)$ climbed 3.2% in premarket trading Friday after rallying 8.2% over the past two sessions. Hydrogen-fuel-cell-systems company Plug Power's stock $(PLUG)$ pulled back 1.1% ahead of the open after gaining 3% in the past two days.

Rivian said late Thursday that it closed its loan deal with the DOE for up to $6.6 billion to support the construction of a manufacturing plant near the city of Social Circle, Ga., which the company said will help create 7,500 new jobs.

Rivian said it expects construction to begin in 2026, while the production of EVs there should start in 2028.

Plug Power also announced late Thursday that it closed a $1.66 billion loan guarantee from the DOE that will help finance the construction of multiple plants throughout the U.S. that produce and liquify hydrogen.

"The loan close came just before Inauguration Day next week, likely easing investor concerns of cancellation under Trump 2.0 if the load had remained in the conditional stage for much longer," J.P. Morgan analyst William Peterson wrote in a note to clients.

Truist's Levy said that while there was still some uncertainty over what the Trump administration will do with the Clean Hydrogen Production Tax Credit (45V), the DOE loan provides Plug Power with an "essential lifeline" as it looks to grow its green hydrogen base.

Rivian's stock has soared 42.7% over the past three months through Thursday and Plug Power shares have charged up 34.3%, while the Invesco WilderHill Clean Energy exchange-traded fund PBW has gained 2% and the S&P 500 index SPX has tacked on 1.6%.

-Tomi Kilgore

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January 17, 2025 09:21 ET (14:21 GMT)

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