ATLANTA: Electric vehicle maker Rivian Automotive will announce Thursday that it is building a $ 5 billion battery and assembly plant east of Atlanta that is expected to employ 7,500 workers, sources told The Associated Press.
Rivian, based in Irvine, Calif., Is a startup electric truck and commercial van manufacturer challenging established automakers like Ford and General Motors as well as leading electric vehicle Tesla.
The plant could grow to as many as 10,000 workers, sources said, which would make it one of the largest auto assembly complexes in the United States, rivaled by giants like the 11,000-employee BMW complex in Spartanburg, South Carolina, and Ford Motor Co. 8,600 employees in Louisville, Kentucky.
Rivian will be the largest industrial announcement in Georgia history, surpassing the 4,400-strong Kia complex that opened in West Point in 2009. Georgia has seen a number of failed auto plant recruits. Rivian will give Georgia Governor Brian Kemp one more point to support his claim that he has been an excellent steward of the Georgian economy, even if he runs for re-election 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 suggest Rivian is considering locations in Arizona and Michigan as well.
Rivian told Fort Worth that its plant would produce 200,000 vehicles a year, with workers paying at least $ 56,000 a year.
The Atlanta Journal-Constitution was the first to report on Rivian’s decision.
Founder and CEO Robert Scaringe told Bloomberg Television in November that the ability to attract good people was the number one factor behind the decision. Rivian’s existing Normal, Illinois plant, like most auto plants that have opened in the past few decades, is non-union.
Georgia officials are unlikely to detail the full package of incentives Rivian was offered Thursday, but the company could do what Georgia calls its “megaproject tax credit,” for companies hiring at least 1,800 employees, or at least 450 Investing millions of dollars, exhausting them. That could be worth $ 118 million in state income tax credits. Local governments are likely to lower property taxes.
Kia received more than $ 450 million in incentives for its plant southwest of Atlanta. Georgia has promised $ 300 million in incentives for the $ 2.6 billion battery plant, which will employ SK Innovation in Commerce, Georgia, northeast of Atlanta, will employ 2,600 people.
Like Tesla, Rivian deals with its customers directly instead of through dealers. The arrival in Georgia could lead the state to relax a law that mostly prohibits manufacturers from selling directly.
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 Truck of the Year 2022 by Motor Trend.
Amazon, which owns part of the company, has ordered 100,000 delivery vans, introducing Rivian to the commercial vehicle business.
Rivian is flooded with liquidity following a $ 11.9 billion stock offering on November 10 that brought the company public, allowing it to fund the new facility. Its market value is nearly $ 95 billion, more than General Motors or Ford.
The company argues that the electric vehicle adoption is at the “tipping point” and it is well positioned to succeed, as trucks and SUVs have long been the most profitable vehicles sold. However, some analysts doubt the need for another plant in addition to the former Mitsubishi plant in Illinois, which Rivian bought for $ 16 million in 2017. Rivian says it has an annual capacity of 150,000 vehicles but plans to expand there as well.
“It seems a little premature to invest so much in another large facility right now,” said Sam Abuelsamid, senior mobility analyst at Guidehouse Insights, who said Rivian may also be looking for a manufacturing location in Europe.
Given the size of the Georgia plant, Abuelsamid expects it will make other parts for the vehicles, much like electric vehicle operator Tesla, who makes seats at its Fremont, California plant.
Rivian has cash in the bank but is used up so quickly unless it starts delivering vehicles and generating cash, which threatens its status as a darling in the market, Abuelsamid said. In addition to Amazon, the company needs more private customers and commercial vehicle buyers, he said.
“If the actual shipments don’t pick up, the markets could turn against them, as they have done with some other EV startups not called Tesla,” Abuelsamid said. “Unlike Tesla, Rivian will face more serious competition in a much shorter timeframe than Tesla’s nearly ten-year lead.”
Ford and GM plan to start selling their own electric pickup trucks in the next year or two, while Tesla is also planning a new pickup truck. This is part of a wave of investments in electric vehicles, with SK’s $ 5 billion battery plant northeast of 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.
The consulting firm LMC Automotive expects sales of almost 400,000 new fully electric vehicles in the USA this year, almost twice as many as in the previous year. But they still only make up about 2.6% of sales. The company expects sales to rise to over 730,000 next year and to more than 2 million by 2025. Even at 2 million, EV sales would still only represent about 12% of US new vehicle sales.