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Rivian gets a lifeline: Abdul Latif Jameel-backed US EV startup Rivian was given conditional approval for a loan of up to USD 6.6 bn from the US Department of Energy (DOE) to build an electric vehicle factory in Georgia and expand production of its midsize vehicles, according to a recent press release. The money will come from the DOE’s Energy’s Advanced Technology Vehicle Manufacturing (ATVM) Loan Program with USD 6 bn as principal money and USD 600 mn of capitalized interest.
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What’s next? The company will need to meet a raft of technical, regulatory, environmental, and financial requirements before the loan is finalized. One of the conditions not mentioned in the company’s statement was for Rivian to not oppose union organizing efforts at the plant, a source close to the matter told Reuters.
About the plant: Rivian plans to build the production facility in two phases with a 200k annual production capacity each. Phase 1 is set to begin production in 2028. The plant will be located at Stanton Springs North, Georgia state, and is expected to generate 7.5k jobs once operational.
We knew this was coming: Rivian reportedly applied for a federal loan to fund the construction of its long-planned EV plant in Georgia that had been stalled due to a lack of funds. The amount was not disclosed at the time.
Gaining momentum? The latest development comes just two weeks after Volkswagen (VW) raised its investment in Rivian by 16% to reach USD 5.8 bn, Reuters reported earlier this month. The investment is focused on supporting a joint venture the companies launched earlier this year that will focus on software-defined vehicle platforms. According to the agreement, VW will have immediate access to Rivian’s EV software for its vehicles, and both companies plan to use the tech from their JV to develop vehicles before 2030.
REMEMBER- Production forecasts were slashed this year: Rivian lowered its annual production forecast by over 14% back in October due to parts shortage and demand slowdown. Its shares are down about 50% this year, according to a Reuters report at the time. Rivian closed its only manufacturing facility in Illinois for three weeks earlier this year to streamline its manufacturing processes and reassess the costs of building its vehicles. The company planned to turn its first profit in 4Q 2024, increasing the production of its R1 models and lining up production of its smaller R2 models in 2026.
