Electric automaker Rivian Automotive revealed on Tuesday that it has received conditional approval for a loan of up to $6.6 billion under the U.S. Department of Energy's (DOE) Advanced Technology Vehicle Manufacturing (ATVM) Loan Program to expand its electric vehicle manufacturing in the United States.
The loan, if finalized, would help in the construction of the Rivian's next facility in Stanton Springs North, near the city of Social Circle, Georgia and would boost the company's domestic capacity to support the demand both within the U.S. and the international market, according to a press release from the company
The loan would play a significant role in the development of its midsize SUV, the R2, and also its midsize crossover, the R3/R3X.The company believes that the two vehicles could usher in a long-term growth and profitability for the company.
Rivian is considering building the Georgia facility in two phases. Each phase would result in 200,000 units of annual production capacity. This number would be enough to support the sale of American-made EVs in the international market.
The Phase 1 of the production is expected to start in 2028. The company expects to generate about 7,500 jobs until 2030 at the Georgia facility, which would be in addition to the expected 2,000 full-time construction jobs that it would need.
"This loan will help create thousands of new American jobs and further strengthen U.S. leadership in EV manufacturing and technology," said RJ Scaringe, the CEO and founder of Rivian.
"This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize both capability and affordability. A robust ecosystem of U.S. companies developing and manufacturing EVs is critical for the U.S. to maintain its long-term leadership in transportation," he further explained.
Shares of Rivian plunged 50% this year due to issues in production of its electric SUVs and pickup truck as well as parts shortage, all resulting in efforts to slash costs, Reuters reported.
To preserve whatever cash it has, the company opted to halt production in its Georgia plant. However, with the conditional loan from the DOE, it may be the right step to get production going again for the carmaker.
The company said that in order for the DOE to grant the loan, it must be able to satisfy certain legal, technical, environmental and financial conditions.
One of those conditions is for Rivian to not actively oppose union organizing efforts at the plant, although the loan approval will also not guarantee unionization. Rivian had earlier forecast the cost of the Georgia plant at $5 billion.
DOE has provided loans to automakers such as General Motors and Tesla under its ATVM program.
