Rivian Automotive (RIVN) stock is higher in Tuesday's session after the electric vehicle (EV) maker announced it has secured a conditional commitment for a loan of up to $6.6 billion from the Department of Energy's Advanced Technology Vehicle Manufacturing (ATVM) Loan Program.
If finalized, the loan will be used to construct Rivian's next facility in Stanton Springs North, Georgia. This will allow the automaker to expand its domestic production and help fund its production of its midsize vehicles, Rivian said.
"This loan will help create thousands of new American jobs and further strengthen U.S. leadership in EV manufacturing and technology," said Rivian CEO RJ Scaringe in a statement. "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."
The project is expected to create up to 2,000 full-time jobs for the construction of the facility and create 7,500 positions in operations by 2030, the Department of Energy said. It also supports the Biden-Harris administration's goal of having half of vehicles sold in 2030 to be zero-emissions.
Rivian must "satisfy certain technical, legal, environmental, and financial conditions" before the loan is approved and funded, the regulatory agency added.
Is Rivian stock a buy, sell or hold?
It's been a rough year on the price charts for Rivian stock, down nearly 50% since January 1. RIVN took its most recent hit earlier this month when President-elect Donald Trump's transition team said it is considering eliminating the EV tax credit. Still, Wall Street is bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for RIVN stock is $14.96, representing implied upside of more than 28% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Wedbush is one of the more bullish outfits on RIVN stock with an Outperform rating (equivalent to a Buy) and $20 price target.
"Although we still remain confident in the long-term Rivian vision, it will take some serious strides for the company to regain trust in the short-term vision in the eyes of the Street," wrote Wedbush analyst Daniel Ives in a November 8 note. "Supply chain navigation and resolution is at the top of the priority list for the company as it is in the midst of a massive transformation while it optimizes its R1 production line and focuses on its mid-$40,000 range R2 debut in 1H26 with the R3 shortly thereafter."
