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Rivian Automotive, Inc. (NASDAQ:RIVN) may have taken one more step toward manufacturing its next-gen, affordable EV models. The Irvine, California-based company reportedly received approval for starting construction of the Georgia plant, which is earmarked for manufacturing more affordable EVs based on the R2 platform.
What Happened: The Joint Development Authority of Jasper, Morgan, Newton and Walton counties, as well as Georgia Department of Economic Development officials, said Rivian had closed on a deal to build a new manufacturing facility, Atlanta, Georgia-based TV Station WSB-TV reported on Friday.
“It's a great day in Georgia as we close and issue the bonds for the Rivian project,” the JDA and GDECD reportedly said in a joint statement. “Renting the site to Rivian is the next step in delivering this generational opportunity, and Georgians in Jasper, Morgan, Newton, and Walton counties,” they added.
Fact sheet about the project available on JDA’s site shows that Rivian intends to make a $5 billion investment in the nearly 2,000-acre campus in Stanton Springs North, electric adventure vehicle manufacturing and R&D facility. The investment would create about 7,500 jobs.
See Also: Best Electric Vehicle Stocks
Why It’s Important: Rivian, along with the rest of the EV startup ecosystem is facing the pressure of uncertain economic conditions that have served to render the consumer mood cautious. It has become hard to push pricier EVs. To make matters worse, EV market leader Tesla, Inc. (NASDAQ:TSLA) has initiated a price war and the reverberation of it is felt across the industry.
Although Rivian has fared better than its peers, it is yet to position itself comfortably in the EV arena. The new R2 platform to be used for manufacturing more affordable EVs could help Rivian circumvent the impact of an inclement economy.
Speaking on the third-quarter earnings call, Rivian CEO R.J. Scaringe said the R2, while maintaining the brand's essence, will be more compact and available at a lower price point. “There's an extreme vacuum of choice we feel in the sort of $45,000 to $50,000 price range for midsize SUVs,” Scaringe said, adding the lack of choices has left Tesla with a highly concentrated market share.
Rivian recently hired Mercedes-Benz Group AG (OTC:MBGAF) veteran Arnhelm Mittelbach as its Georgia plant manager.
Rivian ended Friday’s session up 0.46% at $15.40, according to Benzinga Pro data.
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