By JEFF AMY | Updated November 26, 2024
ATLANTA (AP) — The Biden administration announced Tuesday that the U.S. Department of Energy will provide a $6.6 billion loan to Rivian Automotive to support the construction of a large electric vehicle (EV) manufacturing plant in Georgia. The project had stalled as Rivian struggled with profitability.
However, with former President Donald Trump set to retake office in less than two months, there are questions about whether the loan will be finalized in time or if the incoming administration might attempt to reverse the decision. Trump has previously vowed to end federal EV tax credits, currently valued at up to $7,500 for new zero-emission vehicles.
Rivian’s Expansion Plans
Rivian, known for its electric R1 SUVs, pickup trucks, and delivery vans manufactured at its Illinois facility, initially announced plans in 2021 to build a $5 billion plant near Social Circle, Georgia. The company planned to use the facility to produce its smaller and more affordable R2 SUVs, aiming to reach a broader market.
The Georgia plant’s first phase is expected to produce 200,000 vehicles annually, with a second phase doubling that capacity. The facility could eventually employ 7,500 workers. Despite these ambitious plans, Rivian paused construction earlier this year, opting to build its R2 vehicles in Illinois to save $2.25 billion in capital expenditures.
A Financial Boost for Rivian
The company’s financial struggles have been alleviated by recent investments, including a $5 billion infusion from Volkswagen in June through a joint venture. This new loan from the Department of Energy offers a fresh lifeline, allowing Rivian to revive its Georgia plans and prepare for production of both the R2 and a smaller R3 model by 2028.
“This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles,” CEO RJ Scaringe said.
The Department of Energy emphasized the loan’s importance in advancing U.S. EV manufacturing and supporting the administration’s target for zero-emission vehicles to comprise 50% of new car sales by 2030.
Federal and State Collaboration
The loan, drawn from the Advanced Technology Vehicles Manufacturing Loan Program, includes $6 billion in principal and $600 million in interest rolled into the total. The program, established in 2007, has funded early production of notable EVs like the Tesla Model S and Nissan Leaf.
Georgia leaders welcomed the announcement. U.S. Senator Jon Ossoff, a Democrat and vocal supporter of the state’s EV industry, called it a “historic federal investment.” Republican Governor Brian Kemp also championed the project, despite his frequent criticism of the Biden administration’s industrial policies.
“Our shared vision to bring opportunity to Georgia will remain no matter who resides in the White House or what party controls Congress,” Kemp spokesperson Garrison Douglas said.
Challenges and Competing Developments
The Rivian project faced opposition from local residents and legal challenges but received substantial state and local support, including $125 million for land preparation and $50 million for roadwork. The factory’s incentive package, valued at $1.5 billion, reflects Georgia’s bid to become a hub for EV manufacturing.
Meanwhile, rapid progress continues at Hyundai’s $7.6 billion EV and battery complex near Savannah, where production recently began. With Georgia becoming a magnet for EV investment, Rivian’s revived plans could bolster the state’s burgeoning reputation as a leader in clean energy manufacturing.
