Biden administration to loan $6.6 billion to Rivian to build Georgia factory that stalled automaker
ATLANTA (AP) – President Joe Biden’s administration announced Tuesday that the U.S. Department of Energy will lend Rivian Automotive $6.6 billion to build a factory in Georgia that has been stalled as the startup struggles to turn a profit.
It’s unclear whether the administration can end the loan before Donald Trump becomes president again in less than two months, or whether the Trump administration might try to pay it back.
Trump previously vowed to eliminate tax credits for electric vehicles, up to $7,500 for new zero-emission vehicles and $4,000 for used ones. Trump later softened his stance as Tesla CEO Elon Musk became a supporter and adviser.
Rivian made a splash when it went public and began production of the R1 large electric SUVs, trucks and delivery vans at the former Mitsubishi plant in Normal, Illinois, in 2021. Months later, the California company announced that it would build a second, larger one. , a $5 billion plant about 40 miles (64 kilometers) east of Atlanta, near the city of Social Circle.
R1 cars cost $70,000 or more. The first plan was to produce R2 cars, a small SUV, in Georgia with low prices aimed at the mass market. The first phase of Rivian’s Georgia factory is expected to make 200,000 vehicles a year, while the second phase could make another 200,000 a year. Ultimately, the facility was projected to employ 7,500 workers.
But Rivian was unable to meet production and sales targets and was quickly burnt out of cash. In March, the company said it would suspend construction of the Georgia plant. The company said it will begin assembling its R2 SUV in Illinois instead.
CEO RJ Scaringe said the move will allow Rivian to get R2 to market sooner, sometime in 2026, and save $2.25 billion in capital expenditures. Since then, German automaker Volkswagen AG said in June it would invest $5 billion in Rivian in a joint venture in which Rivian would share software and electrical technology with Volkswagen. The money reduced Rivian’s cash flow.
Tuesday’s announcement breathes life into Rivian’s grand plans. The company says its plans to make the R2 and smaller R3 in Georgia are back on track.
The money will come from the Advanced Vehicle Loan Program, which has $17.7 billion to provide low-cost loans to make fuel-efficient cars and parts. The program has focused on lending to new electric vehicle battery factories in recent years but also helped finance the initial production of the Tesla Model S and Nissan Leaf, two pioneers of electric cars in the US.
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