Electric vehicle maker Rivian said Wednesday it plans to delay by a year production of a new crossover at its future $5 billion Georgia factory, a setback for the EV startup that also recently saw hundreds of millions of dollars in property tax breaks threatened by a local judge’s ruling.
Rivian executives said they remain committed to their plans to build the sprawling EV and battery plant an hour east of Atlanta. The factory, which is expected to employ 7,500, was originally expected to start production in 2024.
But since announcing the project in December, Rivian has suffered through supply chain and production snags and a suddenly challenging economy. Earlier this year, Rivian said it would start production in Georgia of the new crossover, known as the R2, in 2025.
“We are adjusting the timeline for launching the R2 platform and expect it will launch in 2026,” Chief Financial Officer Claire McDonough said during Rivian’s third quarter earnings call.
The crossover will be sold at a lower price than its flagship R1T truck and R1S SUV, and the R2 is seen as crucial to expanding the startup’s customer base.
The company also plans to manufacture the R1T, R1S and Amazon electric delivery vans at the forthcoming factory near Social Circle. Rivian did not say Wednesday whether production of those models in Georgia also will be delayed. A Rivian representative declined to answer questions from The Atlanta Journal-Constitution.
The R2 news follows a recent ruling by a Morgan County judge that shot down a central component of the $1.5 billion incentive package offered by state and local leaders to Rivian. That ruling is under appeal.
McDonough said factory development will continue.
“We continue to work with the state of Georgia and the joint development authority on our second production facility,” she said.
Rivian became a public company late last year in one of the nation’s biggest initial public offerings. But its stock has plummeted amid broader recessionary fears and production issues.
On Wednesday, Rivian reported a $1.7 billion loss in the third quarter, up 40% from a year ago. Rivian reported $536 million in revenue in the quarter that ended in September. The company reported virtually no revenue in the period a year ago ahead of becoming a public company.
Compared to the second quarter, Rivian revenues grew by about 47% on increased vehicle deliveries.
Rivian’s current manufacturing takes place at its sole factory in Normal, Illinois, but the company is hinging its long-term future on ramping up vehicle production in Georgia.
The company produced 7,363 vehicles during the year’s third quarter, a 67% jump over the quarter that ended in June. Rivian would need to produce nearly 10,700 vehicles before the end of December to meet its production goal of 25,000 vehicles in 2022.
Rivian CEO R.J. Scaringe said his company would hit its goal.
Scaringe credits the increase in production to a second manufacturing shift at the Normal plant.
“As we navigate through these uncertain economic times, we are encouraged by the strong demand for our products as evidenced by our robust preorder backlog,” he said, citing the company’s 114,000 preorders. Rivian also has a deal to produce 100,000 Amazon vans.
McDonough said the “supply chain continues to be our largest source of uncertainty as we continue to ramp production.”
“We’ve experienced five days of production downtime in October and November due to a lack of supply of a key component, which limited our quarter-to-date production,” she said.
Rivian also announced in September it entered into an electric van joint venture with Mercedes-Benz in Europe.
Scaringe expressed confidence in the company’s direction and future products.
“While we haven’t shown any of our future products yet, I couldn’t be more excited about the work happening on our next platform,” Scaringe said.
The company has about $14 billion in cash and cash equivalents on hand, and the company affirmed it expects its operating loss for the full year to likely be $5.45 billion.
Rivian stock closed Wednesday at $28.07 per share, and is down about 75% since the beginning of the year. However, share prices rebounded in after-hours trading.
Rivian’s planned Georgia factory is one of two large EV plants coming to the Peach State.
Hyundai recently held a ceremonial groundbreaking on its $5.5 billion EV factory near Savannah. Rivian is also expected to hold a similar celebratory event, but a date has yet to be provided.
A note of disclosure
Cox Enterprises, owner of The Atlanta Journal-Constitution, also owns about a 4% stake in Rivian and supplies services to the company. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.
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