Executives of Rivian Automotive Inc. on Dec. 16 said they will build the electric truck and commercial vehicle maker’s second plant east of Atlanta, where they plan to hire about 7,500 workers.
California-based Rivian also reported its first quarterly results since its blockbuster IPO earlier this fall, showing an operating loss of $776 million on revenues of about $1 million as the company pushed to ramp up production of its R1T truck and sought to certify both its R1S sport utility vehicle and the EDV 700 delivery van. Capital spending during the quarter was $469 million as the company built out the infrastructure at its Normal, Illinois factory.
Spending will remain high in coming years as Rivian expands in Georgia, where Founder and CEO R.J. Scaringe and his team expect to begin commercial production of their next generation of vehicles by 2024. They have chosen a site about 45 miles east of downtown Atlanta – the Atlanta Journal-Constitution reports the project will rise on about 2,000 acres along Interstate 20 – and expect to over time build the capacity to produce 400,000 vehicles annually, twice what its Normal, Illinois, plant is forecast to grow to.
The Rivian plant is expected to cost $5 billion. It will join a state automotive ecosystem headlined by a Kia Motors factory and a Bluebird bus plant and also features hundreds of supplier facilities that feed OEM plants across the Southeast’s extensive automotive industry. Neither Rivian executives nor Georgia officials have yet disclosed the scope of incentives the company will receive to build in the Peach State. Rivian had also considered sites in Texas – a potential plant in Fort Worth was to have come with incentives of up to $440 million, which gives a sense of what Georgia will invest in the project – as well as Arizona and Michigan.
Drivers’ interest in Rivian’s lineup is picking up: After finishing the third quarter at about 48,000, preorders for R1 models have risen to 71,000. Asked whether prospective buyers could still expect to receive their vehicles by the end of 2023, Scaringe said his team is still working on that timeframe.
But, he said, Rivian expects to be “a few hundred short” of its initial 2021 production goal of 1,200 – other ambitious EV challengers have run into similar execution hiccups – and said ramping up work on the R1S alongside production of the R1T has been “more challenging than expected.” Among the recent priorities for Scaringe and his team has been boosting battery pack assembly capacity. The company recently brought online a third line to go with its small development line and a second higher-volume one.
The Rivian R1T and R1S models currently have a base price in the mid-$70,000s but, on their conference call with analysts and investors, Scaringe and CFO Claire McDonough repeatedly suggested that number will likely rise.
“We recognize they’re very aggressively priced,” Scaringe said, noting consumer demand, inflation trends and the vehicles’ performance features and amenities. “That’s certainly something we’ve considered and talked about as a management team.”
Shares of Rivian (Ticker: RIVN) fell 5% in regular trading Thursday and then dropped another 10% after hours. The company is still valued at about $90 billion, more than auto giants General Motors, Ford and Stellantis.