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Electrical-Truck Startup Rivian Plans New $5 Billion Manufacturing facility Advanced in Georgia

Electrical-Truck Startup Rivian Plans New  Billion Manufacturing facility Advanced in Georgia

Electrical-vehicle startup

Rivian Automotive Inc.

RIVN -5.33%

plans to start out development subsequent yr on a second U.S. manufacturing facility in Georgia, inserting a hefty guess on its capacity to steadily enhance gross sales within the coming years.

The $5 billion manufacturing funding, which Rivian introduced on Thursday, follows the corporate’s blockbuster IPO final month, the place it raised practically $13.5 billion in recent capital. It additionally comes as competitors within the electric-vehicle market is heating up with established automobile firms equivalent to Common Motors Co. and

Ford Motor Co.

on the brink of roll out new plug-in fashions that may compete with Rivian’s choices.

Rivian stated its new manufacturing unit may have an annual capability of 400,000 automobiles and create 7,500 jobs. The auto producer plans to start out manufacturing on the plant in 2024 constructing its subsequent technology of automobiles.

Rivian additionally reported its first monetary outcomes since going public. The corporate stated third-quarter income was $1 million, reflecting its first car gross sales, which started in September. Its web loss widened to $1.2 billion, in contrast with $288 million in the identical year-ago interval, because it incurred larger prices on launching new fashions and creating future ones.

Rivian shares have been down 11.1% Thursday in after hours buying and selling.

The corporate stated it completed the third quarter with $5.2 billion money available, up from $3.6 billion a yr earlier. It stated with the lately issued debt and the proceeds of its IPO, the most important on a U.S. change since 2014, its money available would have been $19.9 billion.

Electrical-truck maker Rivian sought a valuation for its public providing within the tens of billions. However what makes the providing completely different from different EV startups? WSJ’s George Downs explains. Illustration: George Downs

Buyers have excessive expectations for the Irvine, Calif.-based startup, with Rivian’s shares having gained 39.5% because it listed on Nov. 10. The corporate’s market valuation of $97 billion has surpassed these of each GM and Ford, making it essentially the most beneficial U.S. auto maker behind

Tesla Inc.

On a name with analysts, Rivian founder and Chief Government RJ Scaringe stated the corporate has been challenged by the complexity of launching three fashions amid a world pandemic and a good labor market. It has produced 652 automobiles since beginning in September and can seemingly fall just a few hundred wanting an preliminary aim of constructing 1,200 automobiles in 2021, he stated.

“It’s a very advanced orchestra,” he stated, citing the difficulties of juggling coaching and supply-chain points.

Rivian’s valuation displays Wall Road’s enthusiasm for so-called pure-play electric-vehicle startups. Like Tesla, these upstarts are targeted solely on promoting battery-powered fashions and are unencumbered by a legacy enterprise constructed round gasoline engines. Conventional auto makers are additionally investing billions of {dollars} to construct extra electrical automobiles, however proper now these firms make practically all their income on promoting gasoline-powered vehicles, SUVs and vehicles.

Governments globally are accelerating the shift to electrics with tighter tailpipe-emission laws and different efforts, equivalent to electric-vehicle subsidies, which might be geared toward lowering air air pollution. Within the U.S., President Biden’s infrastructure invoice comprises $7.5 billion for electric-vehicle charging stations, whereas his broader spending bundle would broaden tax credit to assist cut back the prices of buying a battery-powered auto.

When requested why the Rivian’s manufacturing unit footprint was increasing so shortly, Mr. Scaringe stated the Georgia plant was vital to the corporate’s long-term progress and the lengthy lead time for development required making investments now.

“This can be a platform for us to develop from,” he stated.

Rivian already has a manufacturing unit in Regular, Ailing., which started constructing electrical vehicles in September. At full capability, that plant is able to producing 150,000 automobiles a yr, the corporate has stated. The brand new Georgia manufacturing unit would considerably add to the corporate’s output as Rivian expands its lineup with future fashions.

Rivian’s choice to find its plant in Georgia comes as extra electric-vehicle funding is flowing to southern states, additional shifting the auto trade’s middle of gravity away from Detroit.

Ford, in September, stated it will make investments $7 billion in new initiatives that might assist its shift to electrical automobiles, selecting Tennessee and Kentucky for the brand new amenities. A part of the spending will embody its first new meeting plant in many years, to be inbuilt western Tennessee, together with a battery-making manufacturing unit.

One other rival startup,

Lucid Group Inc.,

which goals to promote high-end electrical automobiles, opened its first U.S. manufacturing unit in Arizona this yr.

Rivian has raised greater than $20 billion up to now three years. Along with the corporate’s IPO haul, Rivian has raised roughly $10.5 billion privately because the begin of 2019, attracting a number of big-name backers, together with Ford, Cox Enterprises and asset supervisor T. Rowe Worth Group Inc.

Wall Road has been notably taken with Rivian, which launched an electrical truck known as the R1T this fall that may compete with pickups made by the Detroit automobile firms. It plans to launch two extra fashions this yr: an SUV and a supply van constructed for Inc.,

which owns an 18% stake in Rivian. These fashions take intention at a number of the most worthwhile elements of the U.S. automobile market and shall be supplied in physique types which might be fashionable with patrons.

Analysts are usually bullish on Rivian’s prospects, although many observe the corporate will face a lot of challenges forward because it tries to ramp up manufacturing and construct out a gross sales and repair community.

Rivian says it has an extended technique to go earlier than its present manufacturing unit capability is maxed out. It has stated it doesn’t anticipate to hit a run-rate of 150,000 automobiles yearly for an additional two years, in response to firm filings.

Mr. Scaringe based the startup in 2009, working it for years in stealth mode because it honed its marketing strategy.

With the discharge of the R1T, Rivian beat a lot of its rivals to market in placing a totally electrical pickup truck in the marketplace. However it would quickly face a extra crowded market with main automobile firms, equivalent to GM and Ford, on the brink of roll out their very own plug-in pickups.

GM plans to start out deliveries of its Hummer electrical truck this month, and Ford says deliveries of its F-150 Lightning will begin subsequent yr. Tesla additionally plans to make its futuristic Cybertruck at excessive volumes in 2023.

In contrast to Tesla, which has dominated U.S. gross sales of electrical automobiles for a number of years, Rivian’s first-mover benefit is prone to be short-lived, analysts say.

“They really have actual competitors from auto makers who’ve lastly gotten the memo about electrification and the wants of shoppers,” stated Jessica Caldwell, an analyst at auto-data agency

Write to Ben Foldy at

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