Up-and-coming EV maker Rivian closed on a monumental land agreement last week for 1,800 acres to host its new mega site in Georgia. Construction can now begin on Rivian’s $5 billion facility, where its next-gen R2 electric vehicles will be made.
The Joint Development Authority (JDA) of Jasper, Morgan, Newton, and Walton Counties approved several resolutions last week to finalize the lease agreement and bonds to prepare for construction.
According to The Atlanta Journal-Constitution (AJC), Rivian will rent the site for 50 years to establish a 16 million-square-foot EV plant in Georgia.
The American manufacturer will establish 7,500 “good-paying jobs” in the region, the JDA and Georgia Department of Economic Development said in a joint statement.
Despite the $5 billion investment, not everyone was thrilled with the decision. Rivian first revealed plans for its massive $5 billion facility in Georgia in December 2021. Construction was initially stated to begin last summer, with production starting by 2024.
The plant was delayed due to legal battles over its $1.5 billion incentive package, a key piece of the agreement that includes tax breaks, grants, free land, and infrastructure.
Rivian’s incentive package is the second largest in the state, behind Hyundai’s $1.8 billion. Hyundai began construction on its $5.5 billion, 3,000-acre EV assembly and battery plant in Bryan County, Georgia, last October. The company said 99.99% of the foundation work was completed last month.
Rivian closes on massive land deal for Georgia EV plant
Bonds central to the Rivian facility were issued last week following the closing. Due to the legal battles, several adjustments were made to the agreement. For one, the JDA slightly lowered the number of acres it will lease from 2,000 to about 1,744 to build a frontage road and state training facility.
Rivian is expected to begin construction soon, with grading work progressing through the end of the year. According to company spokespeople, a groundbreaking ceremony will occur in early 2024.
According to the report, the site will employ 7,500 workers with an average salary of $56,000. The plant will begin producing Rivian’s smaller, cheaper R2 electric vehicles in 2026.
After crushing third-quarter earnings estimates, Rivian raised its production goal for the year to 54,000. Rivian delivered 15,564 vehicles between July and September, up 24% compared to last quarter.
The EV maker also produced 16,304 EVs at its Normal, Illinois factory in Q3, a 17% increase over Q2.
Once complete, Rivian’s Georgia plant is expected to be able to produce 400,000 EVs a year, compared to its Illinois facility, which is capped at 150,000.
Rivian announced it had hired Arnhelm Mittelbach as its first plant manager in Georgia earlier this month. Mittelbach joins Rivian from Mercedes with experience as the plant manager in East London and South Africa. He was also the president and CEO of Mercedes-Benz Vans in Charleston, SC.
Despite the recent growth, Rivian issued a $1.75 billion green convertible note in October to create an additional cash buffer. CEO RJ Scaringe explained the move “further strengthens” its balance sheet as it approaches the beginning of construction in Georgia.
Scaringe added, “We’re well positioned as we look to start production of the R2 platform in 2026.”
The R2 “captures the essence of our brand,” but in “a smaller package and at a much lower price point,” according to Rivian’s CEO. Prices are expected to start at around $40K-$45K, compared to over $70K for the R1T and R1S.
Rivian is expected to reveal its first R2 model next year as it aims to expand the brand into new markets.
The EV startup continues exceeding expectations, outpacing rivals with its unique all-electric adventure vehicles. Rivian’s Normal, IL plant is now charging every new EV with 100% clean energy from solar and wind. It will be interesting to see what Rivian will do in Georgia.
Author: Peter Johnson