Rivian secures $6.6 billion loan for new plant – but with one major caveat

California EV maker Rivian has said it has secured conditional approval of a loan of up to $6.6 billion from the U.S. Department of Energy to build a production facility in Georgia. Among those conditions is a big one, that the company won’t actively oppose union organizing efforts.

Rivian has been setting plans in place to build a plant in Georgia – the company’s second US plant – but the company has hit some tough economic times, with shares dropping about 50% this year. Earlier this year, the company put its Georgia factory on hold.

Since, it has been building its smaller, more affordable R2 SUV at its plant in Normal, Illinois, where it also makes its flagship R1S SUVs and the R1T pickup trucks.

“This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize both capability and affordability,” Rivian CEO RJ Scaringe said in the statement.

Of course, it is “conditional” approval, meaning that Rivian has “to satisfy certain technical, legal, environmental, and financial conditions before the energy department grants the loan,” the company said.

Rivian secures a $6.6 billion loan from the US Department of Energy – with a few stipulations

While details of the conditions weren’t included in the original report, one detail was, at least touched on: that Rivian will not, in fact, actively oppose union organizing efforts at the Georgia plant, a source close to the subject told Reuters. But that of course, the loan wouldn’t “guarantee unionization” at the plant either. In an email, Rivian declined to comment on the matter at this time.

The Illinois factory, its only plant, has also been in the spotlight due to racking up more “serious” US safety violations than any other automaker since the start of 2023, according to Bloomberg. And the company hasn’t been exactly warm to unionizing efforts, despite pressures from President Biden to do so. Back when Rivian applied for financing from the Department of Energy, the government was already nudging the company to shift to a friendlier stance toward the United Auto Workers Union, although what that exactly means isn’t clearer. It could mean, as Bloomberg cited in July, to include discussion around labor engagement and showing more openness to working with labor unions. Of course, the incoming president has a different stance on this issue, so perhaps the current lack of clarity is just a way of holding off until we have a better idea of how both the EV landscape and UAW support will change.

The Rivian factory in Normal employs around 7,400 workers, and the EV maker is one of the city’s largest employers, with multiple members of some families working at the plant.

Rivian’s Georgia plant will have a yearly capacity of 200K

The Georgia loan comes from the government’s Advanced Technology Vehicles Manufacturing loan program, which has also given loans to Tesla, Ford, and GM.  Rivian’s Georgia EV plant is the second-largest development project in the state behind Hyundai’s $7.6 billion facility that began production last week.

The plant would help Rivian bring 400,000 EVs to market “and into greater use,” the Department of Energy said back in October as it was considering the loan. The 1,744-acre site for the plant is 40 miles east of Atlanta, and will include two production blocks, each with a capacity of up to 200,000 vehicles annually. Rivian is expected to break ground in the second quarter of 2026.

Monday, Rivian announced that the loan includes $6 billion of principal and $600 million of capitalized interest. The news follows that of Rivian closing its $5.8 billion investment from Volkswagen as part of their technology joint venture. Back in 2022, Rivian secured $1.5 billion in state and local incentives for the Georgia plant. In May, the EV maker received $847 million in state incentives to expand its Illinois factory.

Photo credit: Rivian

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