Source: The New York Times
The money-losing electric vehicle company, which makes vans, trucks, and S.U.V.s, is trying to preserve cash as it works to produce and sell more affordable vehicles.
Rivian, a young electric vehicle company, said on Thursday that it was halting construction of a new factory in Georgia. The company also announced two new models, one of which will now be produced at its plant in Illinois.
The company had nearly completed preparing the roughly 2,000-acre site in Georgia that is about 50 miles east of Atlanta, and it was expecting to break ground on the $5 billion plant this year.
However, the growth of electric vehicle sales has slowed in the past six months, forcing many automakers to reassess their plans for new factories and models.
Rivian said delaying the Georgia plant would save it about $2.25 billion, a large sum from a business that has been losing billions of dollars for several years. The company said it was committed to building the plant but did not say when it hoped to restart construction.
“Our Georgia site remains important to us,” Rivian’s chief executive, R.J. Scaringe, said at an event on Thursday where he unveiled two new sport-utility vehicles. “It’s core to scaling across all these vehicles.”
One of the S.U.V.s, called the R2, is a five-passenger vehicle that is expected to be available in the first half of 2026. Originally, the R2 was supposed to be the first vehicle produced in Georgia. Shifting production to Normal, Ill., where the company has an operating factory, will allow Rivian to begin delivering the vehicle to customers sooner, Mr. Scaringe said.
The R2 will have a starting price of about $45,000, he said, which is $30,000 less than its larger S.U.V., the R1S. The R2, Mr. Scaringe said, “combines capability, performance, utility, storage, functionality in a way that we think fits with a huge customer need.”
Rivian also introduced the R3, a compact S.U.V., and a high-performance version of that vehicle, the R3X. The company did not say when or where those models would be produced.
Delaying construction of the new factory is a setback for Georgia and its governor, Brian Kemp, a Republican, who had promoted the construction as the largest economic development project in the state’s history. Rivian had said it expected the plant to create 7,500 jobs and eventually produce 400,000 vehicles a year.
The plant had faced opposition over its potential environmental impact, the lucrative state subsidies Georgia gave to Rivian and how it would affect the area’s rural character. Mr. Kemp’s opponent in the 2022 Republican primary for the governor’s office, former Senator David Perdue, focused part of his campaign on blocking the plant.
Rivian was once seen as a potentially formidable rival of Tesla for supremacy in electric vehicles. The company was started by Mr. Scaringe and raised billions of dollars from Amazon, Ford Motor, and other investors. It has a contract to produce thousands of electric delivery vans for Amazon.
But Rivian has struggled to ramp up operations at its plant in Illinois, slowing production of the vans, the R1S, and the R1T pickup truck. In 2023, the company sold just over 50,000 vehicles, more than double its total in 2022. It lost $5.4 billion last year on revenue of $4.4 billion.
Investors have grown much more skeptical about the company’s prospects in recent months. Rivian’s stock has fallen by about 90 percent from just after it went public in November 2021. The company’s shares closed up 13 percent on Thursday after it announced it was delaying the Georgia plant.
THE AUTHOR: Neal E. Boudette is based in Michigan and has been covering the auto industry for two decades. He joined The New York Times in 2016 after more than 15 years at The Wall Street Journal.
