Irvine electric vehicle maker Rivian has received conditional approval for a federal loan of up to $6.6 billion that would help fund construction of a Georgia plant where it could manufacture smaller and more affordable SUVs.

The company said late Monday that the loan from the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing Loan Program would support construction of a plant outside Atlanta that Rivian halted work on this year after losing $5.4 billion in 2023.

“This loan will help create thousands of new American jobs and further strengthen U.S. leadership in EV manufacturing and technology,” Rivian founder and Chief Executive RJ Scaringe said in a prepared statement.

Rivian said it “must satisfy certain technical, legal, environmental, and financial conditions” before the department gives final approval and funds the loan.

Shares of Rivian were up 4% to $12.06 in early afternoon trading.

The funding comes just weeks after Rivian and Volkswagen Group entered into a joint venture that could deliver as much as $5.8 billion to the electric vehicle maker, which is supplying the German company electronic and computer components for its own electric vehicle program.

The venture significantly boosted the finances of Rivian, which went public in 2021 amid strong investor interest in EV makers, but the market has been slowed by higher interest rates and other challenges. Rivian also has struggled with supply issues and production.

The company cut 10% of its 16,700-plus workforce earlier this year and recorded a net loss of $1.1 billion, or $1.08 a share, in the third quarter. It employed about 2,200 locally in 2023, according to the Orange County Business Journal.

The loan was approved by the Energy Department in the waning days of the Biden administration, whose 2022 Inflation Reduction Act set aside some $500 billion to boost clean energy and make other investments in the economy. The administration’s announced goal has been to have half of all cars sold nationally be electric by 2030.

President-elect Donald Trump has said he wants to pull back any unspent funds of the act, but the law has drawn bipartisan support as much of the funding has flowed to Republican-led states. The planned Rivian plant has the support of Georgia Gov. Brian Kemp, a Republican.

“Today’s announcement reinforces the Biden-Harris Administration’s commitment to strengthen the nation’s manufacturing competitiveness, helping ensure American businesses remain global leaders in the rapidly expanding EV industry,” the Department of Energy said.

Karl Brauer, executive analyst at iSeeCars.com, an automotive research website, said the loan reflects the Biden administration’s efforts to put “a wide range of things in place as quickly as possible.”

“They won’t control the agenda any longer,” he said, adding that the loan would give Rivian a “much longer runway and much needed financial help.”

This is not the first time the department has made a large loan to support the electric vehicle industry. In 2010, it gave a $465-million loan to Tesla Motors to help fund its vehicle development and to build its Fremont, Calif., factory.

At full capacity, the EVs manufactured at Rivian’s Georgia facility are expected to yield an annual fuel consumption savings of roughly 146 million gallons of petroleum, the energy department estimated.

Rivian sold about 50,100 vehicles last year, boasting that its full-size, three-row R1S is the top-selling SUV in California in the above-$70,000 price category. But it has yet to release cheaper models that appeal to a broader market. It also makes delivery vans for Amazon.

The company is already expanding its sole plant in Normal, Ill., where it makes the R1 and plans to start production in 2026 of the midsize R2 SUV, which would start at about $45,000 and be released in the latter half of that year.

Rivian said the loan also would provide “significant funding” for the development of the platforms of the R2, as well as even more affordable midsize crossover models called the R3 and R3X — all of which the company said are crucial for its long-term growth and profitability.

The company said it would build the new plant in two phases, each with an annual production capacity of 200,000 vehicles.

If the loan receives final approval, it would be secured by all assets of the project and fixed assets and guarantees of Rivian and some of its subsidiaries, the company said.

WASHINGTON —  When President-elect Donald Trump announced he would impose sweeping tariffs on key trading partners on his first day in office, he signaled a return to a favorite strategy: a reverse carrot-and-stick that applies the stick of dire consequences in order to force countries to give him what he wants. In this case, that means a tougher crackdown on illegal migration and the movement of drugs into the U.S.

The risk of applying this tactic to foreign trade is that the whole U.S. economy is so reliant on the status quo that any miscalculation could have damaging consequences, especially in California and other trade-dependent states.

To some extent, that happened in Trump’s first term, when selective tariff increases set off costly trade wars with China and others.

The fallout from tariffs could have major damaging effects on California’s globally integrated economy, affecting thousands of businesses and many more jobs, consumer prices and choices of goods. And, if trading partners retaliate, tariff increases could hurt the state’s sales of farm goods, electronics, transportation equipment and other leading exports. Mexico and Canada are the top two destinations for California exports, and China and Mexico account for the bulk of the state’s imports.

Even uncertainty over such possibilities can cause havoc in financial markets and raise fears of higher prices, as well as disruptions to vital businesses dependent particularly on Mexico and the Pacific Rim.

Trump posted on his Truth Social site late Monday that on his first day on the job he would impose 25% tariffs on all goods from Canada and Mexico, and also tack on an additional 10% levy on Chinese imports. He said these countries — which are the United States’ top three trading partners — would be paying the price for not doing enough on illegal migration and drugs flowing into the U.S.

“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump wrote.

The reality is that illegal border crossings from Mexico have fallen dramatically in recent months as the Biden administration has tightened up especially on asylum arrivals.

And U.S. drug seizures along the Southwest border have changed little in recent years, according to Department of Homeland Security statistics.

For years, China has been a major producer of fentanyl coming into the U.S., and Trump said in his post that Beijing has failed to clamp down on drug suppliers as it had promised.

Canada is not a big source of illicit drugs or illegal migration into the U.S., although there has been a sharp increase in unauthorized crossings along the northern border in the last year, driven in large part by Indians. Trump didn’t explain why Canada was targeted, but some analysts said he may be viewing the drug and migration situation as a North American problem.

U.S. stock markets, which had been on a run in recent days, opened mixed Tuesday but ended the day higher, suggesting that investors are familiar with Trump’s playbook and that these three countries could avoid the tariffs if they present a credible plan to curb the drug supplies and secure the borders, said analysts at Capital Economics. Mexico staved off a similar Trump threat over illegal migration in 2019.

But Trump’s salvo just three weeks after the election, plus his frequent campaign promises of hiking tariffs, suggests that he will move more quickly in carrying out his trade agenda than in his first term.

Trump has said he would slap tariffs of 10% to 20% on goods from around the world, and up to 60% on imports from China.

The consequences could be dire for California’s economy, given its heavy trade with China and Mexico.

Imports from China ($120 billion) and Mexico ($62 billion) accounted for a full 40% of the $450 billion worth of foreign products that entered California last year. And Mexico, Canada and China rank as the state’s top three export markets.

Overall, international trade and investment and related commerce employ hundreds of thousands of Californians and are a major economic engine for the state.

At the Port of Los Angeles, China’s share of all cargo, as measured by containers, has fallen to 43% from 57% in 2022. But the Port of L.A., the busiest in the nation, has kept growing in overall volume due to increased shipments from other Pacific Rim countries.

With U.S.-China relations worsening over the last decade, many manufacturers in California, as elsewhere, shifted at least some production and suppliers away from China to other sites in Asia and also to Mexico. But the scale of tariffs that Trump is announcing, whether 10% across the globe or separate duties on Chinese, Mexican and Canadian goods, would be too great for other countries to make up.

Much of U.S. imports from China and Mexico are consumer goods and intermediate parts that go into autos, appliances and other products. Southern California apparel companies have for years been sending clothes to be sewn and finished in Mexico, duty-free. Vehicle components often cross North American borders back and forth several times before final assembly — and tariffs added along the way will mean higher prices for everybody.

Now those long-established supply chains may be in jeopardy as analysts expect Trump to try to remake trade deals with North American partners, among others, using tariffs and the big American economic market as leverage.

“It’s going to be a jolt to the system, and at the end of the day it will be impactful to consumer pocketbooks,” said Rachel Michelin, president of the California Retailers Assn. She said her member companies have been trying to get ahead of higher tariffs by ordering products before Trump takes office.

“From a California perspective, it’s going to be alarming because the cost of living here is higher,” Michelin said. “We really are pricing people out of living in California.”

In Trump’s first term, China and other countries hit back by raising tariffs on sensitive American farm goods, including soybeans and wine. But overall trade also slowed, with U.S. companies scurrying to file for tariff exemptions and trying to curry favor with his administration for relief.

Jock O’Connell, a California trade specialist at Beacon Economics, said the Trump administration’s trade skirmishes with China in 2017 caused a dramatic falloff in the state’s trade volume. California exporters learned to diversify their markets. This time around, he said, the state may have even fewer options.

“There’s not going to be a lot of political payoff” in helping California, O’Connell said. “Can you imagine [Gov.] Newsom flying to Washington to meet with trade officials in the White House to deal with tariffs?”

Greg Danenhauer, co-owner of Parker Boiler, a manufacturer in City of Commerce, said he still buys some steel and cast iron burners from China, but overall looks to China for less than 18% of his supplies, compared with as much as 25% in 2016. Parker Boiler also buys temperature controls and other products from Mexico.

Danenhauer said Trump’s earlier tariffs on Chinese products actually helped level the playing field for domestic makers such as himself. And he’s not worrying about higher tariffs down the road.

“To me, everybody is panicked about it,” he said. “But we don’t know yet” what’s coming, he said.

Dan Ujczo, a trade lawyer at the Ohio-based firm Thompson Hine, drew a distinction between Monday’s tariff announcement, which he said was “very tactical and transactional, targeted for a specific purpose,” and Trump’s plans on universal tariffs and those aimed at China. The latter “are more transformative or transitional when it comes to global trade,” he said, adding that they are likely to be proposed later and closer to when tax cuts and other fiscal plans are ready.

During his first term, Trump often used threats such as high tariffs to browbeat America’s allies into concessions. On defense policy, for instance, he famously raised doubts about continued U.S. participation in the North Atlantic Treaty Organization; European allies responded by boosting their contributions to the cost of mutual defense.

Chinese imports are already subject to U.S. tariffs of 10% to 25% stemming from Trump’s actions in his first term and which were left in place by President Biden. That helped Mexico overtake China in 2021 as the United States’ top two-way trading partner. Still, the United States’ biggest trade deficit, by far, remains with China, in excess of $279 billion last year, according to the Census Bureau.

Trump’s tariffs announced Monday, if implemented, would almost certainly cause significant disruptions for industries and raise consumer costs for gas, autos and all sorts of other products, possibly reigniting inflation, which appeared to be a key factor in his election victory.

The U.S. imported a total of about $1.3 trillion worth of goods from those three countries last year, and about two-thirds of that amount came in tariff-free, thanks to the U.S. free trade agreement with Mexico and Canada.

Despite that trade pact, experts said Trump could impose the tariffs by using the statutory authority under the International Emergency Economic Powers Act of 1977, which he cited extensively in his first term, including in his dealings with Mexico and China.

Whether tactical or not, the tariff threats could escalate — Mexico already said it could retaliate with counter-tariffs. And some economists warned that Trump’s plans could backfire.

“It’s a reckless grenade toss,” said Michael Clemens, an economics professor at George Mason University who specializes in international migration. “Harming American consumers and workers with a trade war will do nothing at all to address their concerns about immigration and drugs.”

In 2019, construction workers raised alarms about a company building luxury apartments in Oakland that appeared to be skirting its financial obligations, both to the state and its employees.

That tip would set off a years-long investigation by the California Department of Justice, which accused the Kentucky-based company, US Framing West Inc., of violating state labor laws at that Oakland site, as well as committing tax evasion and wage theft in several other construction projects across the state, including some that had received public funding.

“While working these projects, we allege, US Framing West failed to pay more than $2.5 million in state payroll taxes,” Atty. Gen. Rob Bonta said at a Tuesday news conference. “We also allege that, at a public works project in Cathedral City, US Framing West also underpaid its workers by approximately $40,000.”

Bonta and his team have filed 31 criminal charges, including grand theft, payroll tax evasion, prevailing wage theft and filing false documents, against US Framing West and two of its employees.

“For some reason, US Framing West seems to think it can [operate] outside the bounds of California labor laws, thinks it can steal from California and from our workers,” Bonta said. “I’m here with a simple message: They cannot; no company can.”

The two employees, Thomas Gregory English and Amelia Frazier Krebs, as well as the company, pleaded not guilty in the case earlier this month, according to Los Angeles County Superior Court records.

Gary S. Lincenberg, an attorney representing English and the larger company, declined to comment on the specifics of the allegations but said, “We intend to address the AG’s concerns in court.”

“US Framing is a hard-working company with a great reputation,” Lincenberg said in a statement.

The attorney representing Krebs, Jeffrey Rutherford, said he and his client “intend to vigorously fight the charges.”

Between 2018 and 2022, US Framing West worked on several construction projects across the state, including in Alameda, Los Angeles, Contra Costa, Orange, Riverside, San Diego, San Francisco and Santa Clara counties, according to the attorney general’s office. In many cases, the company used crews of unlicensed subcontractors, who the state mandates be classified as company employees — triggering certain tax requirements, Bonta said. However, the company failed to appropriately file and submit taxes for those subcontractors.

Additionally, investigators found that US Framing West failed to fulfill requirements to pay a prevailing wage — typically a rate similar to that of unionized workers, often well above minimum wage for specialized jobs — on a public works project in Cathedral City. Public works projects are defined as those that use more than $1,000 of public funds.

Bonta urged any union worker, employee or concerned citizen to report other potential labor law violations to the Justice Department. The workers on that initial Oakland site were not unionized, but reached out to the Nor Cal Carpenters Union for help addressing alleged shortcomings by their employer.

“It is no accident that California boasts the fifth-largest economy in the world,” Bonta said. “It’s because we’ve got some of the strongest worker protections in the country. It’s because, in California, we stand up for our workers.”