The US Department of Energy will provide a $6.6 billion loan to Rivian Automotive to build a factory in Georgia, the administration of President Joe Biden announced on Tuesday. That stopped as The fledgling automaker struggled To become profitable.
It’s unclear whether the administration will be able to complete the loan before Donald Trump becomes president again in less than two months, or whether the Trump administration might try to recoup the money.
Trump previously vowed to end the matter Federal tax credits for electric vehiclesWhich amounts to $7,500 for new zero-emission vehicles and $4,000 for used vehicles. Trump later softened his stance Tesla CEO Elon Musk has become a supporter and advisor.
Rivian Make a splash When it went public and began producing R1 large electric SUVs, pickup trucks and Delivery vans Previously Mitsubishi A factory in Normal, Illinois, in 2021. Months later, the California-based company announced it would build a second factory, A larger $5 billion factory About 40 miles (64 kilometers) east of Atlanta, near the town of Social Circle.
R1 vehicles cost $70,000 or more. The original plan was to produce the R2, a smaller SUV, in Georgia at lower prices aimed at the mass market. The first phase of Rivian’s Georgia plant was expected to produce 200,000 vehicles per year, with the second phase capable of producing another 200,000 vehicles per year. Ultimately, the plant was expected to employ 7,500 workers.
But Rivian was unable to meet production and sales goals and quickly ran out of cash. In March, the company said it would temporarily halt construction of the Georgia plant. The company said it will start assembling its R2 SUV in Illinois instead.
CEO RJ Scaringe said the move will allow Rivian to bring the R2 to market more quickly, sometime in 2026, and save $2.25 billion in capital spending. Since then, the German automaker Volkswagen AG said in June that it would invest $5 billion in Rivian in a joint venture in which Rivian would share software and electric technology with Volkswagen. The funds eased Rivian’s cash crunch.
Tuesday’s announcement throws a lifeline to Rivian’s grand plans. The company says its plans to manufacture the R2 and smaller R3 in Georgia are back on track.
Money will come from Manufacture of advanced technology vehicles The $17.7 billion loan program provides low-cost loans to make fuel-efficient vehicles and components. The program has mostly focused on loans for new battery factories for electric vehicles in recent years, but it has also helped finance initial production of the Tesla Model S and Tesla Model S. April Leaf, two of the pioneers of electric vehicles in the United States
The program, created in 2007, requires that there be a “reasonable likelihood of repayment” of the loan.
democratic US Senator Jon Ossoffwho has been a strong supporter of electric vehicle and solar manufacturing in Georgia, praised Tuesday’s announcement as “another historic federal investment in electric vehicle manufacturing in Georgia.” Ossoff asked Energy Secretary Jennifer Granholm backed the loan in July.
“Our federal manufacturing incentives drive economic development across the state of Georgia,” Ossoff said in a statement.
Georgia Governor Brian Kemp He says his goal He is making Georgia an electric vehicle manufacturing hub. But Republicans have a tense relationship with the Biden administration over its industrial policy, even though some studies have found that Georgia has made more investments in electric vehicles than any other state.
Kemp has long claimed that manufacturers were choosing Georgia before Biden’s signature, inflation-reducing climate law passed. Kemp’s spokesman, Garrison Douglas, said earlier this month that the governor wants Trump to prioritize a “market-based approach to economic growth.”
“Because the e-mobility space was already growing in Georgia before the federal government intervened, the governor remains strongly opposed to the Biden administration’s decision to not only pick winners and losers but impose counterproductive mandates that hurt Georgia’s automakers and demotivate organic consumers,” Douglas said. : “Adoption of electric cars.”
The loan to Rivian could save one of the Kemp administration’s signature economic development projects even as Biden leaves office. This could put Rivian and Kemp in a position to defend the loan if Trump tries to cancel it.
State and local governments have offered Rivian a package of incentives With an estimated value of $1.5 billion in 2022. The company’s deadline to complete investment and hiring under this deal has been extended to 2030. Neighbors oppose the development From the Georgia website, legal challenges escalated.
State and local governments are expected to spend more than $125 million to purchase the approximately 2,000-acre (810-hectare) site and remove trees and graded land. This work has been completed. The state has also completed most of the $50 million in road work it pledged.
The pause at Rivian contrasts with the rapid build at Hyundai Motor(/hotlink)group. Electric car worth $7.6 billion And the battery complex near Savannah. The plant in Ellabell, announced in 2022, could grow to 8,500 employees. The Korean automaker said in October It has started production there.
