Rivian to build $ 5 billion electric truck plant in Georgia, sources say

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Electric vehicle maker Rivian Automotive will announce Thursday it is building a $ 5 billion battery and assembly plant east of Atlanta that is expected to employ 7,500 workers, informed sources told The Associated Press. of the decision.

Rivian, based in Irvine, Calif., Is an early stage manufacturer of electric trucks and commercial delivery vans, challenging both established automakers like Ford and General Motors and electric vehicle leader Tesla.

The plant could reach up to 10,000 workers, sources said, making it one of the largest auto assembly complexes in the United States, rivaled by giants such as the 11,000-worker BMW complex in Spartanburg, South Carolina, and the Ford Motor 8,600. -worker factory in Louisville, Kentucky.

Rivian will be the largest industrial ad in Georgian history, overtaking the 4,400-worker Kia complex that opened at West Point in 2009. Georgia has seen a number of auto factory recruiting failures . Rivian will give Georgia Governor Brian Kemp another point to bolster his claims that he has been an excellent steward of the Georgian economy, even in the face of Republican and Democratic challengers when he runs for reelection next year.

The city of Fort Worth, Texas offered Rivian a $ 440 million incentive package to attract the plant over the summer, while published reports indicate Rivian has also considered sites in Arizona and Michigan.

Rivian said in Fort Worth that his factory would make 200,000 vehicles a year, with workers paid at least $ 56,000 a year.

The Atlanta Journal-Constitution was the first to report Rivian’s decision.

Founder and CEO Robert Scaringe told Bloomberg Television in November that the ability to recruit good workers was the biggest factor in the decision. Rivian’s existing plant in Normal, Ill., Like most auto factories that have opened in recent decades, is not unionized.

Georgian officials are unlikely to detail all of the incentives offered to Rivian on Thursday, but the company could maximize what Georgia calls its “mega-project tax credit,” for companies that hire at least 1,800 people or invest at least $ 450 million. This could be worth $ 118 million in income tax credits. Local governments are likely to reduce property taxes.

Kia has secured more than $ 450 million in incentives for its plant in southwest Atlanta. Georgia has pledged $ 300 million in incentives for the $ 2.6 billion battery plant and 2,600 workers being built by SK Innovation in Commerce, Georgia, northeast of Atlanta.

Rivian, like Tesla, deals directly with its customers rather than through resellers. His arrival in Georgia could prompt the state to relax a law that overwhelmingly prohibits manufacturers from selling direct.

Rivian is currently planning two models for consumers – the R1T pickup with a base price of $ 67,500 and the R1S SUV, with a base price of $ 70,000. The truck was recently named Motor Trend’s Truck of the Year 2022.

Amazon, which owns part of the company, has ordered 100,000 delivery vans, launching Rivian into the commercial vehicle business.

Rivian is teeming with cash following an $ 11.9 billion stock offer on Nov. 10 that took the company public, allowing it to finance the new plant. Its market value is almost $ 95 billion, more than General Motors or Ford.

The company maintains that electric vehicle adoption is at the “tipping point” and is well positioned to succeed, as trucks and SUVs have long been the most profitable vehicles sold. But some analysts wonder if it needs another plant besides the old Mitsubishi plant in Illinois, which Rivian bought for $ 16 million in 2017. Rivian says it has an annual capacity of 150,000 vehicles, but that it is also seeking to develop there.

“It seems like it’s a bit premature to invest so much in another large plant just yet,” said Sam Abuelsamid, senior mobility analyst for Guidehouse Insights, who said Rivian may also be looking for a manufacturing in Europe.

Given the size of the Georgia plant, Abuelsamid expects it to manufacture other parts for vehicles, similar to the electric vehicle leader Tesla making seats at its plant in Fremont, Calif.

Rivian has money in the bank, but will spend it quickly unless he starts delivering vehicles and generating cash, jeopardizing his status as a market darling, Abuelsamid said. The business needs more retail customers and utility vehicle buyers other than Amazon, he said.

“If actual shipments don’t start to increase, the markets could backfire like they did with other non-Tesla EV startups,” Abuelsamid said. “Unlike Tesla, Rivian will face serious competition in a much shorter time frame than the nearly ten-year lead Tesla had.”

Ford and GM plan to start selling their own electric pickup trucks in a year or two, while Tesla is planning a new pickup truck as well. It’s part of a wave of investment in electric vehicles, with SK’s $ 5 billion battery plant in northeast Atlanta being just one example. Ford announced in September that it would spend $ 11.4 billion to build three battery factories and an assembly plant in Kentucky and Tennessee.

Consulting firm LMC Automotive expects sales of new all-electric vehicles in the United States to reach nearly 400,000 this year, nearly double the numbers from last year. But they still only represent around 2.6% of sales. The company expects sales to reach over 730,000 next year and over 2 million by 2025. Even at 2 million, sales of electric vehicles would still only account for around 12% of sales of. new vehicles in the United States.

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