By Abhirup Roy
SAN FRANCISCO (Reuters) – Rivian said on Monday it has received conditional approval for a loan of up to $6.6 billion from the U.S. Department of Energy to build the electric vehicle maker’s production facility in Georgia.
Operation of the Georgia plant, where Rivian plans to build future vehicles such as the smaller, cheaper R2 SUVs and R3 crossovers, will begin in 2028, the California-based startup said in a statement. Rivian shares are down about 50% this year as the fledgling company has struggled to produce its spacious electric SUVs and pickup trucks while grappling with parts shortages and has pushed for cost cuts.
To save money and speed production of R2 — considered critical to Rivian’s success amid a slowdown in electric vehicle growth — Rivian halted construction of the Georgia plant earlier this year.
Instead, it decided to start building R2 in 2026 at its Normal, Illinois, plant, where it makes its flagship R1S SUVs and R1T pickup trucks.
“This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles, which emphasize both capability and affordability,” Rivian CEO RJ Scaringe said in the statement.
The loan comes from the government’s Advanced Technology Vehicles Manufacturing loan program, which has previously provided low-cost loans to other automakers, including Tesla, Ford and General Motors.
The company had previously forecast the cost of the Georgia plant at $5 billion.
Rivian said it expects the Georgia plant to employ approximately 7,500 operations employees through 2030.
Rivian must meet certain technical, legal, environmental and financial conditions before the Energy Department will grant the loan, the company said.
“Financial support for the project will help Rivian bring 400,000 electric vehicles (EVs) to market and deploy more,” the Department of Energy said in an October assessment as it reviewed the loan.
The loan includes $6 billion in principal and $600 million in capitalized interest.
The loan announcement comes less than two weeks after Rivian completed its $5.8 billion investment from German automaker Volkswagen as part of its technology joint venture.
The joint venture will help alleviate “a significant portion of capital concerns” and likely establish the Rivian and Volkswagen businesses as the platform of choice in the Western world, aside from Tesla, Canaccord Genuity analysts said in a note at the time.
Rivian continues to face significant challenges, including a lack of scale, increasing competition, high capital costs and President-elect Donald Trump’s plans to end tax breaks for electric vehicle buyers.
By 2022, the EV manufacturer had secured $1.5 billion in state and local incentives for the Georgia facility. In May, it said it had received $827 million in an incentive package from the state of Illinois to expand operations at its Normal plant, where it also makes electric vans for Amazon.com.
Rivian earlier this month posted its first decline in quarterly sales since going public three years ago, citing a significant shortage of a metal part used in the power unit of its vehicles.
Still, the company stuck to its forecast of achieving its first gross profit in the current quarter, due to cost savings as Rivian renegotiated supplier contracts and revamped its manufacturing processes, and a sharp increase in green car credits.
(Reporting by Abhirup Roy in San Francisco; Editing by Lincoln Feast and Peter Henderson)
