Rivian Secures Conditional $6 Bn Loan for EV Plant Construction

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Electric vehicle (EV) maker Rivian Automotive Incorporated (Irvine, California) said last week it received conditional commitment for a $6.6 billion loan from the U.S. Department of Energy (DOE) to help kickstart construction of a facility in Georgia that could produce 400,000 vehicles annually.

Industrial Info currently classifies the project as being on hold with a low probability of moving forward as planned due to market conditions and financing. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project and Plant databases can click here for the project report and here for the plant profile.

"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 officer R.J. Scaringe said.

For its R2 midsized SUV and the R3/R3X midsized crossover, Rivian aims to build a manufacturing plant in Georgia that could yield 400,000 units over two phases.

Rivian already received $827 million in funding from the state of Illinois this year to help expand its automotive assembly plant in Normal, Illinois. Those funds went toward plant expansion, improvements in public infrastructure and job training programs for Rivian's workforce, leading up to the company's production of the R2 line of SUVs. The plant's annual capacity is slated to increase from 150,000 vehicles to 215,000 vehicles as a result. Subscribers can click here for the project report and here for the plant profile.

Rivian's R1S model is already among the best-selling electric vehicles on the market, though the sticker price of nearly $75,000 may put it out of reach for some consumers. The company was also forced to scale back its production estimate for current models due to problems sourcing some of its components.

The company reported a $1.1 billion net loss during the third quarter, but remains upbeat about the future for EVs in the North American market.

"This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize both capability and affordability," Scaringe said.

That comes amid mixed sales figures for alternative vehicles.

The federal government found that year-on-year sales of vehicles powered entirely by batteries remained the same, though hybrid-electric sales improved by 31%. Sales in general may be leveling off due in part to range anxiety and sticker shock, leading some automotive giants such as Ford Motor Company (NYSE:F) (Dearborn, Michigan) to scale back their programs for alternative vehicles.

U.S. President Joe Biden had worked to support a domestic sector for many components for EVs, while consumers could get credit toward a purchase and for at-home charging stations. To that end, Rivian said its new manufacturing facility in Georgia could create around 7,500 jobs through 2030.

"A robust ecosystem of U.S. companies developing and manufacturing EVs is critical for the U.S. to maintain its long-term leadership in transportation," the company's founder said.

The fate of the loan, meanwhile, may rest in the hands of President-elect Donald Trump, who may scrap some of Biden's initiatives. Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) founder Elon Musk, a close Trump confidant, also suggested subsidies for EVs will come to an end.

Subscribers can click here for the project reports mentioned in this article and here for the plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).