By Abhirup Roy
SAN FRANCISCO (Reuters) -Rivian mentioned on Monday it has obtained conditional approval for a mortgage of as much as $6.6 billion from the U.S. Division of Power to construct the electrical automobile maker’s manufacturing facility in Georgia.
The announcement comes forward of the inauguration of President-elect Donald Trump, who is anticipated to undo most of the Biden administration’s EV-friendly insurance policies and incentives.
Operation of the Georgia plant, the place Rivian plans to construct future automobiles reminiscent of its smaller, cheaper R2 SUVs and R3 crossovers, will start in 2028, the California-based startup mentioned in an announcement.
Rivian shares are down about 50% this 12 months because the younger firm has struggled to provide its roomy electrical SUVs and pickup vehicles whereas grappling with a component scarcity, and has pushed to slash prices.
To preserve money and hasten the manufacturing of R2 – seen vital to Rivian’s success amid a slowdown in EV progress – Rivian paused development of the Georgia plant earlier this 12 months.
It as a substitute determined to begin constructing R2 in 2026 at its Regular, Illinois plant the place it makes its flagship R1S SUVs and R1T pickup vehicles.
“This mortgage would allow Rivian to extra aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 automobiles that emphasize each functionality and affordability,” Rivian CEO RJ Scaringe mentioned within the assertion.
Rivian should fulfill sure technical, authorized, environmental, and monetary circumstances earlier than the vitality division grants the mortgage, mentioned the corporate.
As a part of the circumstances for the mortgage, Rivian won’t actively oppose union organizing efforts on the Georgia plant, a supply conscious of the matter instructed Reuters, including that the mortgage approval won’t assure unionization on the facility.
Rivian will work with the Power Division to shut the mortgage earlier than the Trump administration takes over, the supply mentioned.
Rivian didn’t instantly reply to requests for remark.
EV LOAN PROGRAM
The mortgage comes from the federal government’s Superior Know-how Automobiles Manufacturing mortgage program that has beforehand supplied low-cost loans to different automakers, together with Tesla, Ford and Normal Motors.
The corporate had earlier forecast the price of the Georgia plant at $5 billion.
Rivian mentioned it expects the Georgia plant to make use of about 7,500 operations employees by way of 2030.
“Financially supporting the Mission will assist Rivian carry 400,000 electrical automobiles (EVs) to market and into better use,” the Division of Power mentioned in an October evaluation because it thought-about the mortgage.