SOCIAL CIRCLE, Ga. — Rivian’s planned production facility near Social Circle will be where the company produces a new SUV model expected to be more affordably priced than its current vehicles.
The company said in a quarterly letter to shareholders that its facility planned for 2,000 acres in Walton and Morgan counties would be “the production site for our future R2 platform — a more accessibly priced mid-sized SUV targeting global markets.”
Prices are in the $70,000 range for new Rivian-produced vehicles. A lower-priced model could allow it to better compete with other automakers that are planning or already offer electric vehicles in the $30,000 range.
CEO CJ Scaringe said in a call with investors that the California-based company was “on a clear path” to the beginning of production at its planned Georgia facility despite the company’s stock falling to an all-time low recently.
The company has announced production would begin in 2024. Scaringe said the company plans for its next new model, based on a platform called R2, to be produced beginning in 2025 at the new facility.
Analysts have said the stock price decline came about after prominent investor Ford Motor Co. announced it was selling around 8% of its Rivian shares.
The company also reported a $1.59 billion net loss on revenue of $95 million in the first quarter of 2022.
Scaringe said the company had $17 billion in cash on hand and was working to overcome supply chain issues that have lowered the number of vehicles it has been able to produce at its Normal, Illinois, plant — which lowered its profits.
“Based on the demonstrated production rates and progress we have seen in our facility, we believe if all supply constraints were resolved, our plant would have the ability to run at two times the currently expected output for the remainder of 2022,” the company said in its report.
“As we produce vehicles at low volumes on production lines designed for higher volumes, we have and will continue to experience negative gross profit related to significant labor and overhead costs. This dynamic will continue in the near term, but we expect it will improve on a per vehicle basis as production volumes ramp up faster than future labor and overhead cost increases.”
The report said it was investing in technologies and capabilities at its current Normal, Illinois, facility that were “designed to benefit future platforms, including R2.”
The report noted the company signed an Economic Development Agreement with the state of Georgia and the four-county Joint Development Authority that allowed it to move forward with development of the Georgia plant.
The deal included $1.5 billion in local and state incentives for the project.
“We are thrilled to be partnering with the state and local communities on this project. We expect the new facility to have a transformative impact on the local economy and believe this investment represents compelling benefits for all stakeholders.”
The agreement also requires the company to produce at least 80% of the 7,500 jobs it promised by 2028 and maintain it for 20 years or face the loss of its tax breaks.
The company will give the JDA payments in lieu of taxes (PILOTs) that the JDA will redistribute to the four counties that are part of the agency, including Newton.
There was no mention in the report of local opposition to construction of the facility from an organized group centered on Morgan County and the nearby city of Rutledge.
The group has opposed construction for a variety of reasons — from the lack of transparency in negotiations for the plant, to environmental concerns, potential loss of the area’s rural nature and the state’s control of the project which allows it to bypass local reviews.
The state, however, has vowed to comply with all environmental regulations and constraints and be as transparent as possible — a claim opponents have regularly scoffed at.
