Photo: Rivian
Faced with tough decisions as its cash reserves are drying out, Rivian put plans for a second factory in Georgia on hold. However, the EV startup has applied for a federal loan to build the factory by 2028. It's unclear whether Rivian will still be with us by then, but it's certain that it needs that money now.
Rivian is going from bad to worse, even though it just overhauled its Normal, Illinois, factory to build the refreshed R1S and R1T. The EV startup is on a tight budget, as its cash reserves are drying out fast. Rivian scrambled to cut losses as it seeks to report positive gross profit in the fourth quarter of 2024. However, in light of the disappointing Q3 2024 results, it's unclear whether this is still possible.
In the third quarter, Rivian delivered fewer vehicles than expected and announced a lower full-year production guidance. However, the delivery numbers should still match or surpass the 2023 results. We're a month away from the Q3 earnings call, but it will probably confirm more cash burn. This shows that the EV startup is now in dire straits, and the fact that its partner, Volkswagen, doesn't look much better might seal its fate.
Despite that (or because of it), Rivian filed for a federal loan to continue building its Georgia factory. This is surprising, considering that Rivian put the factory on hold to save money and focus on ramping up production at its main factory in Illinois. Spending money on an additional production facility is also weird when your existing factory is at less than 25% utilization. Rivian's second factory in Stanton Springs, Georgia, is projected to cost $5 billion, with the local and state incentives amounting to $1.5 billion.
A filing on the Department of Energy's website shows that Rivian applied for a federal loan to finance the project. Rivian does not need this factory (and will not need it for a long time) and said that producing the R2 in its Normal, IL, factory would actually save it $2.5 billion. Why is Rivian still considering the Georgia plant, and why now when it should focus on ramping up production in Illinois?
One explanation could be that Rivian has some obligations as part of Georgia state's incentive package to build the plant. If that's the case, letting go of the $1.5 billion would probably be wiser, especially as half of it is tax breaks it cannot access. However, it could also mean that Rivian badly needs the cash from this loan to survive the winter and deal with the Georgia factory later when the situation improves.
While the filing is intriguing, it does offer some information about the Georgia factory plans, and it's another bad news. Rivian doesn't intend to break ground earlier than Q2 2026, with manufacturing validation scheduled for Q4 2027. It would take another full year until the first customer vehicles would roll off the production line in Stanton Springs. The question is: will Rivian still be with us by 2028?
In the third quarter, Rivian delivered fewer vehicles than expected and announced a lower full-year production guidance. However, the delivery numbers should still match or surpass the 2023 results. We're a month away from the Q3 earnings call, but it will probably confirm more cash burn. This shows that the EV startup is now in dire straits, and the fact that its partner, Volkswagen, doesn't look much better might seal its fate.
Despite that (or because of it), Rivian filed for a federal loan to continue building its Georgia factory. This is surprising, considering that Rivian put the factory on hold to save money and focus on ramping up production at its main factory in Illinois. Spending money on an additional production facility is also weird when your existing factory is at less than 25% utilization. Rivian's second factory in Stanton Springs, Georgia, is projected to cost $5 billion, with the local and state incentives amounting to $1.5 billion.
A filing on the Department of Energy's website shows that Rivian applied for a federal loan to finance the project. Rivian does not need this factory (and will not need it for a long time) and said that producing the R2 in its Normal, IL, factory would actually save it $2.5 billion. Why is Rivian still considering the Georgia plant, and why now when it should focus on ramping up production in Illinois?
One explanation could be that Rivian has some obligations as part of Georgia state's incentive package to build the plant. If that's the case, letting go of the $1.5 billion would probably be wiser, especially as half of it is tax breaks it cannot access. However, it could also mean that Rivian badly needs the cash from this loan to survive the winter and deal with the Georgia factory later when the situation improves.
While the filing is intriguing, it does offer some information about the Georgia factory plans, and it's another bad news. Rivian doesn't intend to break ground earlier than Q2 2026, with manufacturing validation scheduled for Q4 2027. It would take another full year until the first customer vehicles would roll off the production line in Stanton Springs. The question is: will Rivian still be with us by 2028?
This comes from Rivian's recent Environmental Assessment as they apply for a federal loan, more on that shortly: https://t.co/52KyUY0Nqe
— Rivian Updates (@RivianUpdates) October 4, 2024
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