New investment could revive Rivian’s Georgia plant construction

A new investment from Volkswagen could revive Rivian’s plan to construct the Georgia plant after several delays and a pause due to capital inefficiency.

In 2021, Rivian shared plans to build a second U.S. plant in the state of Georgia. It was estimated at $5 billion for site development and manufacturing facility. The plant expands to 1,800 acres and is expected to house more than 7,500 employees. The plant will produce 400,000 vehicles per year. The facility construction was initially decided for 2022 but delayed until last year.

Real estate company Clayco was selected to build this EV manufacturing site at Stanton Springs, Georgia. In March this year, Rivian introduced R2 and R3 EVs and announced a temporary pause at the construction site.

Rivian estimated a saving of over $2.25 billion compared to the original forecast of launching the first line of R2 production at this new plant. The Irvine California-based company said the Georgia plant is important to scale the R2 and R3 vehicles, two mid-size crossover electric vehicles (EVs).

Rivian Electric Vehicle (EV) Plant in Georgia (Image Credit: Rivian)

Instead of building a second facility, Rivian retooled the Normal Illinois facility with efficient robots and improved its annual vehicle output. Volkswagen planned to invest $5 billion in the electric car company including an initial investment of $1 billion.

This investment and Rivian’s current cash, cash equivalents, and short-term investments are expected to provide the capital to fund Rivian’s operations to ramp up R2 in Normal. That’s not it, the investment will help to start midsize platform production at the Georgia site with a positive free cash flow.

It’s uncertain when Rivian plans to resume the construction but this new investment will give it a positive outlook on this matter.