The U.S. government has approved a conditional loan of $6.6 billion to electric vehicle maker Rivian to support the construction of its long-awaited factory in Georgia. The loan, consisting of $6 billion in principal and approximately $600 million in capitalized interest, is part of the Department of Energy’s Advanced Technology Vehicle Manufacturing program, which has also funded EV production facilities for companies like Ford and Tesla. Rivian, led by CEO RJ Scaringe, plans to use the new plant near Atlanta to manufacture its midsize platform, which supports models like the R2 SUV and the R3 and R3X crossovers. The company announced on Monday that the plant, set to begin operations in 2028, will eventually produce up to 200,000 vehicles annually.
In 2022, Rivian secured a massive $1.5 billion package of state and local incentives to build the plant, promising to create 7,500 jobs at the site. However, the company halted construction this year in a decision it described as aimed at cutting costs. Its shares dropped 50% this year, and its future remains to be seen.
But the DOE loan commitment announcement on Monday gives the company hope that it will be able to keep its promises. The loan will also give the upstart automaker more financial breathing room to continue pursuing its goal of producing a fully electric SUV and pickup truck that rivals those from established manufacturers such as General Motors and Tesla.
The new loan commitment is expected to be finalized by the end of the year. It will provide up to $6 billion in capital investment in addition to the $1.5 billion Rivian already has committed to the project. It will be tied to performance targets such as job creation and sales of EVs produced at the plant and is subject to several technical, financial, and environmental conditions. The DOEDOE said they are also required not to actively oppose union organizing efforts at the plant, although that will not guarantee unionization.
The news comes ahead of the inauguration of President-elect Donald Trump, who is expected to undo many of the Biden administration’s EV-friendly policies and incentives. It also underscores the challenges facing upstart electric vehicle makers in a market that is still growing but still needs to be proven by consumers. An Ernst & Young survey in September found that consumer willingness to buy an electric vehicle fell 14 percentage points from the previous year, while a recent American Automobile Association (AAA) report noted that consumers are increasingly shifting to hybrids instead of fully electric cars.