Rivian Automotive Inc. is halting plans to construct a brand new multibillion-dollar manufacturing facility in Georgia, an abrupt reversal aimed toward reducing prices whereas the corporate prepares to launch a less expensive electrical car.
The choice will save the automaker greater than $2.25 billion in capital expenditures, the corporate mentioned in a submitting Thursday. Shifting deliberate manufacturing of the forthcoming R2 mannequin to an present facility in Illinois will permit Rivian to start deliveries within the first half of 2026, sooner than anticipated. The shock announcement plunges the high-profile manufacturing facility venture into uncertainty, however Chief Government Officer RJ Scaringe mentioned it stays essential to the corporate.
Shares of the automaker jumped as a lot as 16% after the announcement, their largest acquire since July. The inventory was already down greater than 50% this yr via Wednesday on considerations over Rivian’s money and shopper demand for its merchandise.
Rivian in 2022 secured a $1.5 billion package deal of state and native incentives — the largest in Georgia’s historical past — to construct the large plant exterior Atlanta. The corporate pledged on the time to create 7,500 jobs by the top of 2028, profitable reward from native lawmakers.
The retreat comes two weeks after Rivian introduced job cuts and mentioned it might hold manufacturing flat this yr, falling nicely wanting expectations and triggering a heavy selloff within the shares. The corporate has struggled to transition to mass manufacturing since going public in 2021, and the excessive costs of its fashions have been a tough promote as total demand for EVs fades. Rivian has by no means made a revenue and it misplaced greater than $40,000 on each car it delivered in final three months of 2023.
Additionally on Thursday, Scaringe unveiled the long-anticipated R2, a mid-sized electrical sport utility car that may begin at round $45,000. That’s about $30,000 lower than Rivian’s present SUV and slightly below the US common new automotive sticker value of greater than $48,000.
The 2-row SUV shall be obtainable in two battery pack sizes, with the bigger choice providing a spread of greater than 300 miles on a single cost. Clients can selected from one, two or three motor variants of the SUV. Rivian’s additionally giving the car extra superior autonomous know-how with a sensor suite made up of 11 cameras and 5 radars.
Learn Extra: Elon Musk says Rivian must ‘minimize prices massively’ and its execs ought to ‘stay within the manufacturing facility’ for the struggling Tesla rival to outlive
Rivian, one of many few pure-play EV makers manufacturing in America, is making an attempt to seize market share from Tesla Inc. with the brand new mannequin, its first aimed on the mass market. The trouble highlights a push by automakers to carry down prices in an surroundings of slowing demand for EVs, with producers from Tesla to Ford Motor Co. to China’s BYD Co. reducing costs.
Scaringe additionally stunned traders with a prototype of a future crossover EV referred to as R3. Rivian mentioned this mannequin could be priced decrease than the R2, with out giving a greenback quantity or timeline for when it is likely to be constructed.
Rivian at the moment makes two shopper plug-in EVs, the R1T pickup and R1S SUV, and a industrial van primarily for Amazon.com Inc., its largest shareholder. All are constructed on the plant in Regular, Illinois.