Sources: Rivian will build $ 5B electric truck factory in Georgia

ATLANTA – Electric car maker Rivian Automotive will announce on Thursday that it is building a $ 5 billion battery and assembly plant east of Atlanta that is expected to employ 7,500 workers, sources close to the Associated Press said.

Rivian, based in Irvine, California, is a startup manufacturer of electric trucks and commercial vans that challenges both established automakers like Ford and General Motors and the leader in electric vehicles, Tesla.

The plant could grow to as many as 10,000 workers, sources said, which would make it one of the largest automotive complexes in the United States, competing with giants like the BMW complex with 11,000 workers in Spartanburg, South Carolina, and Ford Motor Co. .’s 8,600 factory in Louisville, Kentucky.

Rivian will be the largest industrial announcement in Georgia’s history, surpassing the 4,400-employee Kia complex that opened in West Point in 2009. Georgia has had a series of failed recruitments to car factories. Rivian will give Georgia Gov. Brian Kemp another point to bolster his claims that he has been an excellent steward of Georgia’s economy, even when faced with Republican and Democratic challengers when he faces re-election next year.

The city of Fort Worth, Texas, offered Rivian a $ 440 million incentive package to lure the plant over the summer, while published reports show that Rivian was also considering locations in Arizona and Michigan.

Rivian told Fort Worth that its factory would make 200,000 vehicles a year, with workers paying at least $ 56,000 a year.

The Atlanta Journal-Constitution was the first to report Rivian’s decision.

Founder and CEO Robert Scaringe told Bloomberg Television in November that the ability to recruit good workers was the most important factor in the decision. Rivian’s existing plant in Normal, Illinois, like most car factories opened in recent decades, is not unionized.

Kia received more than $ 450 million in incentives for its plant southwest of Atlanta. Georgia has pledged $ 300 million in incentives to a $ 2.6 billion battery factory with 2,600 workers being built by SK Innovation in Commerce, Georgia, northeast of Atlanta.

Like Tesla, Rivian trades with its customers directly instead of through dealers. Its arrival in Georgia could prompt the state to loosen a law that mostly bans producers 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 Motor Trends 2022 Truck of the Year.

Amazon, which owns part of the company, has ordered 100,000 vans, putting Rivian into the commercial vehicle industry.

Rivian is floating in cash following a $ 11.9 billion share offering on Nov. 10 that took the company on the stock exchange, allowing it to finance the new facility. Its market value is nearly $ 95 billion, more than either General Motors or Ford.

The company claims that the adoption of electric vehicles is at the “tipping point” and it is well positioned for success because trucks and SUVs have long been the most profitable vehicles sold. But some analysts question whether it needs another plant besides 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 is also looking to expand there.

“It seems like it may be a little too early to invest that much in another large factory yet,” said Sam Abuelsamid, lead mobility analyst for Guidehouse Insights, who said Rivian may also be looking for a production site in Europe.

Given the size of the Georgia plant, Abuelsamid expects it to make other parts for the vehicles, just as the head of electric vehicles, Tesla, makes seats at its plant in Fremont, California.

Rivian has cash in the bank but will burn through it quickly unless it starts delivering vehicles and generating cash, jeopardizing its market’s darling status, Abuelsamid said. The company needs more retail customers and other buyers of commercial vehicles than Amazon, he said.

“If actual supplies do not start to rise, markets could turn against them, as they have with some other EV startups not called Tesla,” Abuelsamid said. “Unlike Tesla, Rivian will face serious competition within a much shorter time frame than the nearly decade-long lead that Tesla had.”

Ford and GM are planning to start selling their own electric pickup trucks within the next year or two, while Tesla is also planning a new pickup. It’s part of a wave of investment in electric vehicles, with SK’s $ 5 billion battery factory northeast of Atlanta just one example. Ford announced in September that it would spend $ 11.4 billion on building three battery factories and an assembly plant in Kentucky and Tennessee.

The LMC Automotive consulting firm expects U.S. sales of new fully electric vehicles to hit nearly 400,000 this year, nearly double last year’s figures. But they still make up only about 2.6% of sales. The company expects sales to grow to more than 730,000 next year and more than 2 million. in 2025. Even at 2 million. Electricity sales will still only account for about 12% of new car sales in the United States.

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Associated Press car writer Tom Krisher of Detroit contributed to this report.

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