Rivian to set up $5 bn electric vehicle plant in Georgia

Rivian EV business

Rivian Automotive, an Amazon-backed electric vehicle startup, announced it is planning to set up a $5 billion plant in Georgia.

This will be Rivian Automotive’s second assembly plant in the U.S.

Rivian posted a third-quarter net loss of $1.2 billion. Rivian said it expected production of electric vehicle to fall a few hundred vehicles short of its 2021 target of 1,200 and its pre-order numbers disappointed some on Wall Street.

“Launching and ramping production of three different vehicles within a few months is an incredibly tough challenge,” Chief Executive R.J. Scaringe said on a conference call.

Rivian is facing challenges such as global supply-chain constraints, the COVID-19 pandemic, a tight labor market and short-term issues around building electric battery modules.

Rivian has delivered 386 of the 652 vehicles it has built. It said it plans to ship the first vans to Amazon this month.

Rivian raised almost $14 billion in the IPO to fund future growth on top of the $10.5 billion it had raised privately from such investors as Amazon.com and Ford Motor. Amazon owns 20 percent of Rivian and Ford owns about 12 percent.

The Irvine, California-based company has struggled with the launch of its R1T pickup, R1S SUV and delivery van for Amazon as supply-chain constraints, including chip shortages, hit automakers globally.

Rivian’s Georgia plant will eventually employ more than 7,500 people and build 400,000 vehicles a year. It is scheduled to open in 2024 with in-house battery cell production, largely confirming plans previously outlined in documents filed with other states. Rivian and the state of Georgia did not disclose the tax incentives the company will receive.

The new plant is in east of Atlanta. The existing plant is in Normal, Illinois. Rivian intends to eventually open plants in Europe and China. Scaringe previously said Rivian plans to build at least 1 million vehicles a year by the end of the decade.

The Illinois plant currently has an annual capacity of 150,000 vehicles and Rivian has said it intends to increase that to 200,000 by 2023 as it adds new vehicles. The company said it is adding as many as 1,000 new jobs there by the second quarter of 2022.

On Thursday, Rivian said that as of Dec. 15, it had about 71,000 R1T and R1S pre-orders in the United States and Canada, up from 55,400 it reported at the end of October. Morgan Stanley analyst Adam Jonas said the new order count seems to have come in at the low end of expectations.

Rivian also has a contract to build 100,000 electric delivery vans for Amazon by 2025.