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The US Department of Energy will loan Rivian $6.6 billion to build an electric vehicle factory in Georgia, as Democrats scramble to finalize their climate agenda before Donald Trump takes office.
Rivian, lacking the funds to start the construction process, put its Georgia factory plans on hold earlier this year. The company has lost a significant amount of money since its public offering in November 2021, including $1.1 billion this past quarter. The company recently said it expected to lose up to $2.88 billion in adjusted earnings for the year, up from the previous guidance of $2.7 billion in losses. And it has gone through several rounds of layoffs over the past two years.
Rivian said it received “conditional commitment” for its application to the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which was resurrected by President Joe Biden in 2022. The company says it will work with the DOE to close the loan “quickly,” underscoring the race-against-the-clock aspect that Democrats and EV companies are experiencing before Trump becomes president.
The company says it will work with the DOE to close the loan “quickly”
Trump has promised to reverse much of the spending by Biden on EVs once he assumes office. He has said he will kill the $7,500 tax credit for new EV purchases, as well as wipe out the rest of the spending from the Inflation Reduction Act. Assumedly that will include the ATVM loan program as well.
The loan program attained almost mythical status in the EV startup world thanks to its timely $465 million loan to Tesla in 2009, which is credited with helping save the company from an early death. But the program went fallow during the first Trump administration with a number of cash-strapped EV startups getting no response to requests for funding.
Biden brought the program back in 2022 with a $2.5 billion loan to a joint venture of General Motors and LG Energy Solution to help fund the construction of a new lithium-ion battery manufacturing facility. Since then, the program has made a number of other commitments, including $9.2 billion to a joint venture between Ford and SK Innovation, and $2 billion to Redwood Materials.
The Georgia plant is critical to Rivian’s plans to expand its manufacturing capabilities and grow its lineup, including the more affordable R2 and R3 vehicles. The company says over 2,000 full-time workers will be needed for its construction. The factory will begin operations in 2028, and by 2030, will employ 7,500 workers, Rivian said.
The loan program attained almost mythical status in the EV startup world
The loan would be the first to support the production of EVs, rather than their component parts, the DOE said in a statement. The factory, called Project Horizon, will be located in Stanton Springs North, near the Social Circle, Georgia, 45 miles east of Atlanta. In 2022, the Georgia state government approved a $1.5 billion tax incentive for the factory. The plan has been a “lightning rod” in the state, with opponents holding rallies, dabbling in conspiracy theories, and even threatening local officials.
Rivian also recently closed on a $5.8 billion funding commitment from Volkswagen to create a new joint venture for future software and electric drivetrain production. With today’s news, Rivian is trying to project confidence in its long-term survival — especially with the incoming Trump administration expected to be less favorable toward EV companies.
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