The U.S. Department of Energy gave final approval Thursday to electric vehicle maker Rivian for a $6.6 billion loan to support its stalled Georgia factory, a huge infusion of cash intended to ensure the plant gets built.
The loan, which comes as President Joe Biden exits the White House, will provide Rivian with the financial backing to build its plant in southern Morgan and Walton counties, roughly an hour east of Atlanta. The $5 billion project was first proposed in late 2021 and was initially supposed to open in 2024, but delays mounted as the upstart automaker slogged through supply chain issues and other challenges.
Rivian put construction on pause last March as the California-based automaker enacted a cost-cutting plan. But Rivian CEO RJ Scaringe has said the automaker would deliver on its promise to create 7,500 jobs at the Georgia plant by the end of this decade.
On Thursday, Scaringe said the loan will help accelerate the Georgia plant’s launch and bring thousands of jobs to the state.
“People are incredibly excited to get behind the wheel of our new models, and this additional capacity for our mass market products is key to U.S. leadership in the electric vehicle industry,” Scaringe said in a news release.
Credit: Getty Images for Rivian
Credit: Getty Images for Rivian
The company said Thursday that construction of the first phase of the Georgia factory will begin in 2026, with vehicles expected to come off the assembly line in 2028. It was not immediately clear when phase two of the plant would be completed, but Rivian has said the facility will ultimately be capable of producing up to 400,000 vehicles by 2032.
Rivian applied for the loan more than two years ago, but the DOE didn’t announce preliminary approval until late November.
In a statement, the DOE said the funding reinforces the outgoing Biden administration’s “commitment to strengthen the nation’s manufacturing competitiveness, helping ensure American businesses remain global leaders in the rapidly expanding EV industry.”
The completion of the agreement was among many 11th-hour actions expected from the Biden administration in its final days. But the loan has received heightened attention because allies of President-elect Donald Trump, including entrepreneur Vivek Ramaswamy and House Speaker Mike Johnson, have expressed support for clawing back the funding.
Ramaswamy has been tapped by Trump to help lead a new Department of Government Efficiency, which has pledged dramatic cuts to federal programs, including EV funding. The other leader of that effort is Elon Musk, the billionaire CEO of Tesla, a Rivian rival.
Tesla was among the first to receive assistance — a $465 million loan — through the same DOE Advanced Technology Vehicles Manufacturing program. The company repaid the money, but the funding helped to catapult the then-struggling company into the world’s most valuable automaker.
In July, U.S. Sen. Jon Ossoff, D-Ga., wrote a letter to Energy Secretary Jennifer Granholm stressing the loan’s importance to getting the Rivian project across the finish line.
“Our federal manufacturing incentives are driving economic development across the state of Georgia,” Ossoff said Thursday. “I join all federal, state and local leaders in congratulating Rivian on this federal loan and in celebrating yet another historic federal investment in Georgia electric vehicle manufacturing.”
Credit: Courtesy Rivian
Credit: Courtesy Rivian
Rivian’s loan will be the second-largest ever doled out by the DOE program.
The federal government has a long history of supporting emerging technology companies and industry observers say electrification is the future of the auto industry.
Rivian has struggled to scale operations and it has yet to turn a profit. EV sales industrywide are growing but they have not met bullish projections made by many forecasters.
The project was the largest-ever jobs and investment deal in state history when it was announced by Gov. Brian Kemp in December 2021, surpassed only by the Hyundai Motor Group EV factory near Savannah.
Rivian paused the Georgia factory in March as a temporary cost-cutting measure and shifted initial production of its new crossover model, the R2, to its existing plant in Illinois. Despite the pause, Rivian said it remained committed to opening its Georgia factory, where it has said it’ll expand production of the R2 and produce at least two other future models, the R3 and R3X.
Kemp’s office did not respond Thursday to a request for comment.
EV incentives at risk?
Funding comes from the DOE’s Advanced Technology Vehicles Manufacturing loan program, which was established in 2007 to support domestic energy projects. In addition to Tesla, EV factories by Ford and Nissan previously received financing through this program.
Since the election, DOE has reportedly been racing to close billions in pending clean energy-related loans before Trump’s inauguration on Monday. Now that the agreement has been finalized, legal experts said the Trump administration would face an uphill battle to revoke the loan.
“DOE’s job is to implement the loan program according to the laws passed by Congress, which they appear to be doing,” said Adam Orford, an assistant professor at the University of Georgia’s School of Law. “Assuming the loan was finalized according to the law, it will be very difficult for the new administration to reverse it.”
Credit: John Bazemore/AP
Credit: John Bazemore/AP
Trump has also criticized other federal support for domestic EV and battery manufacturing and has promised to roll back some of those initiatives, like a $7,500 federal tax credit available to consumers who purchase EVs built in North America.
The Zero Emission Transportation Association — a trade group that represents Rivian and a constellation of other EV and battery companies — said in a recent statement the tax breaks are needed to help U.S. manufacturing “compete and win against China.”
Some legacy automakers also have pressed Trump to keep the incentives in place.
Rivian: Georgia key to its future
Rivian has said the Georgia plant is vital to scaling its business.
The company currently makes three-row R1S luxury SUVs and R1T trucks as well as commercial vans. The R1S and R1T have been well-reviewed by the automotive press, but prices can climb to more than $100,000, depending on configuration.
The R2 is a smaller two-row crossover that is expected to start at $42,000, giving Rivian a product more buyers can afford. Rivian is taking orders for the R2, and deliveries are expected to start sometime next year.
R2 production will start in Illinois and expand in Georgia, Rivian has said.
Rivian is also set to benefit from a roughly $1.5 billion incentive package offered by Georgia state and local leaders. Most of those incentives are only realized once the automaker builds its factory and delivers its job promises.
Credit: Steve Schaefer
Credit: Steve Schaefer
The project has sparked some opposition from neighbors, including several lawsuits that have mostly resulted in victories for Rivian and its government partners.
The Georgia Supreme Court decided Tuesday it won’t hear an appeal by property owners near the Rivian site who attempted to challenge the land’s zoning and permitting. The court did not release a reason for choosing not to hear the case, allowing lower court rulings in favor of the project to stand.
The court’s decision shuts the door on a lengthy legal battle that tested the method in which economic development projects receive clearance in Georgia in addition to how state and local leaders provide incentives to companies. JoEllen Artz, a leader within the Rivian opposition group, said she’s heartbroken that their efforts didn’t gain much sympathy in the courts or local government offices. Her group has shifted to petitioning the new Department of Government Efficiency.
“This group will now rely upon DOGE, with whom we have had contact, to use common sense, a quality which has been lacking for three years in pursuit of accomplishing this project,” she said.
The Georgia Department of Economic Development, which oversaw the Rivian project’s recruitment, said the state-owned land where the factory is planned cannot be used by the private company as collateral for the DOE loan.
“While the State and (a local development authority) were not party to this loan or its negotiations, we have been consistent in our efforts to bring generational jobs to Georgia across multiple administrations and independent of federal actions or policy,” an agency spokesperson said. “The existing legal agreements between the state, (the development authority) and Rivian include provision for potential financing, and those agreements fully protect Georgia taxpayers.”
Cox Enterprises, the owner of The Atlanta Journal-Constitution, also owns a 3% stake in Rivian.
About the Authors
The Latest
Featured
