Electric truck startup Rivian has selected Georgia for its second factory, a $5 billion investment officials said validates the state’s strategy to position itself as a hub for the electric-vehicle industry.
The project is the largest single economic development announcement in the state’s history, promising roughly five times the initial capital investment of the Kia Motors plant in West Point. Rivian’s 7,500 pledged jobs represents three times the initial commitment from Kia, the Korean-owned firm that opened the state’s only other car assembly plant in 2009.
At full production, Rivian says the plant on 2,000 acres east of Atlanta will be able to produce 400,000 vehicles per year, an ambitious undertaking for a company that has just begun delivering its award-winning R1T truck. Rivian is also making the R1S sport-utility vehicle as well as electric vans designed for delivery fleets, of which early investor Amazon has ordered 100,000.
Rivian raised some $12 billion in an initial public offering on Nasdaq in November, though its stock is down more than 30 percent from its early peak of about $170 per share. At $92.5 billion as of Thursday, the company’s market capitalization exceeded that of either mainstay Ford or General Motors, despite it having only produced 652 R1 vehicles and delivered 386 as of Wednesday. Some 71,000 preorders of the R1s have been booked so far, with customers plunking down $1,000 deposits. Rivian plans to bypass dealer networks and sell directly to consumers online.
Rivian’s first plant is located in Normal, Ill., and reports had speculated for months that it would seek a second facility even as it expanded its home base by more than 600,000 square feet to bring production capacity to 200,000 cars annually. News outlets including the Atlanta Journal-Constitution reported weeks ago that Rivian was poised to announce a Georgia facility.
The Georgia plant will be located on a newly acquired parcel in the Stanton Springs Industrial Park, a joint development by Jasper, Morgan, Newton and Walton counties that is already home to a Facebook data center and a biologics plant operated by Japan-based Takeda.
The Rivian plant, which Georgia Power’s news release said will encompass 13 million square feet, is to straddle Morgan and Walton counties. Construction will begin next summer with production expected to start in 2024 on “our next generation of vehicles,” Rivian said in a letter to shareholders Thursday.
“This announcement was the culmination of a comprehensive process in which the Rivian team evaluated a variety of sites across the country, looking for the right partner and combination of sustainable business operations, talent pool, and proximity to supply chain and logistics. As we look ahead, our Georgia facility will be critically important to our objective to accelerate the large-scale adoption of sustainable transportation,” the letter reads.
In the report, Rivian also announced that losses for the third quarter had expanded to $1.23 billion (up from $288 million in the third quarter last year) as it ramped up expenses related to the factory in Illinois yet only realized $1 million in revenue on 11 deliveries. The company said the capital raised through the IPO and in private markets before the public listing was sufficient to meet its obligations into the foreseeable future.
At a press conference outside the State Capitol Thursday afternoon, any consideration of the financials was overshadowed by excitement about the massive economic development win for a state that had seen many auto factories go to its neighbors in the decade since Kia landed here.
“The fact is we did not get here by accident,” said Gov. Brian Kemp, praising investments over two decades that helped Georgia become a world leader in electric vehicles and mobility. “We knew Georgia could land a project like Rivian; we just had to find the right fit.”
What Georgia has seen in the meantime is an influx of electric-vehicle suppliers including SK Battery, a $2.6 billion Korean-owned plant in Jackson County that has served as the flagship of the state’s ambitions to attract companies from all levels of the EV supply chain.
Under Mr. Kemp’s direction, the Georgia Department of Economic Development launched in July the Electric Mobility and Innovation Alliance, bringing researchers, utilities, state economic development officials and private-sector leaders together to position Georgia as a leader in the future of automotive industry.
The efforts have paid off both at home and abroad, as Georgia suppliers have ramped up their ability to produce parts related to EVs and as a parade of new investors from Korea, Germany, Turkey and the Netherlands have pledged EV-related facilities. In the past five years, Georgia has won investments from 78 automotive suppliers, the majority of them from overseas.
Rivian is reportedly using batteries from Samsung for its first-generation vehicles, and it plans to produce its own cells in Georgia and Illinois. But already, its growth has paid dividends for suppliers with strong Georgia links. Hyundai Transys, a Korean-owned seat manufacturer with a factory in west Georgia, reportedly landed a nearly $900 million deal for Rivian seats. Italy‘s Pirelli Tire, which has a factory in Rome, Ga., makes tires that come standard on the R1T.
While it’s unclear to what extent Rivian will use suppliers in the state over the long run, Georgia’s ability to attract a steady stream of investors played a role in laying the groundwork for the Rivian investment, economic development Commissioner Pat Wilson told Global Atlanta.
“When you’re building an entire value chain, all of the different investments in that ecosystem help us bring in other projects,” Mr. Wilson said. “None of this value chain exists in the United States right now. And so being able to add these wins — like SK, Enchem, Aurubis from Germany — all add up to creating what these guys need in order to continue to succeed, and then it allows us as a state to focus on building a broad workforce that can translate to all of them.”
The Rivian announcement could heighten state officials’ criticism of a provision in President Joe Biden’s Build Back Better bill, which as written would limit a key tax incentive for sales of electric vehicles to those made in unionized plants in the United States. Mr. Kemp has criticized the provision in the bill as discriminatory toward right-to-work states across the South. Trading partners like Mexico and Canada have said it amounts to a tariff and threatened retaliatory action.
For its part, Rivian’s Chief People Officer Helen Russell said the company has a “maniacal focus” on building a sense of ownership and belonging among its workers to go along with its strong sense of environmental responsibility.
“Rivian exists to combat climate change, and under our mission to keep the world adventurous forever, we see the planet as a key stakeholder,” Ms. Russell said. Some 1 percent of the company’s market capitalization is devoted to its “Forever” plan to “preserve and restore wildlands, waterways and oceans.”
Ms. Russell added that the company also plans to share equity with employees, who will enjoy a culture that eschews “hierarchy” no matter the role.
Perhaps most importantly, the company is committing to what it calls “sustainable manufacturing” in the state. It’s located in the same industrial park as a data center operated by Facebook, which made access to renewable energy a condition of its own large investment. Rivian has not yet selected its power supplier.
Citing a record-low unemployment rate of 2.8 percent announced Thursday morning, the governor took the opportunity to praise the legislature, state and local economic developers and other stakeholders for their role in making the state the No. 1 state for business as ranked by Site Selection magazine.
“I will also say that we are not going to rest on our laurels. We’re going to continue working hard every day to bring more projects that are going to continue supporting job creators in every community,” Mr. Kemp said. “No matter their zip code. No matter how big they are — big or small.”