Gov. Brian Kemp expressed disappointment in the decision last week by Rivian to pause construction of its Georgia electric vehicle factory. But the governor said Tuesday he and the automaker remain committed to making the $5 billion project happen and that Rivian has said it can still meet its jobs and investment promises.
“We honor our commitments in our state, and we’re going to do that in regards to the site and we’re expecting the company to honor their commitments as well,” Kemp said in his first public remarks on the matter.
Rivian stunned Georgia when it announced Thursday it is putting on hold the start of construction of its factory in southern Walton and Morgan counties, an hour east of Atlanta. Instead, Rivian said it will start production of its R2 crossover at its existing factory in Illinois in 2026, the year the Georgia plant had been scheduled to open.
Rivian said the move will help it save more than $2.2 billion in the near term. The R2 and R3 EVs Rivian announced last week are crucial to the upstart automaker’s future, and Rivian CEO RJ Scaringe said the Georgia factory remains key to the company’s growth plans.
Credit: Curtis Compton
Credit: Curtis Compton
Rivian has promised to hire 7,500 workers at the Georgia plant by 2030 and must meet 80% of its jobs and investment goals by the end of that year to avoid penalties laid out in its agreement with the state.
“Everything they’re telling us is they’re still committed,” Kemp said. “What they relayed to me is there is no doubt here.”
The pause sparked frustration among Georgia lawmakers, including some Republicans who expressed interest in potentially punishing the company. This week, some Senate Republicans urged a halt to infrastructure projects in the area until Rivian makes good on its promises. And state Sen. Brandon Beach, R-Alpharetta, echoed other Republicans, saying legislators should have more say over the lucrative incentive packages dangled to help seal big jobs deals.
Kemp said he understands lawmakers’ concerns. But he said Georgia does not want to send signals that it would renege on commitments it has made and that the state is “in a good place” with its contract with Rivian.
Credit: TNS
Credit: TNS
The factory site, which has been graded and is construction-ready, is far more valuable today than when Rivian announced the project in December 2021. And if Rivian were to back out, the state’s top recruiter this week said Georgia would have no trouble finding another project of similar size to take its place.
Rivian so far has not said when it will start construction.
2030 within reason, analyst says
Georgia landed Rivian in part thanks to a package of state and local inducements valued at $1.5 billion. The state has already paid for land and site prep with several road projects also underway. But the bulk of those incentives come only after Rivian fulfills its jobs and investment goals.
Some key lawmakers are skeptical that Rivian will hold to its promise. State Sen. Randy Robertson, R-Cataula, said he’d be “surprised” if the project was ever finished.
And others argued Scaringe has already shaken the state’s faith by shifting production to Illinois a year after he told the AJC: “There’s not another option. We’re not planning an alternative. This must work.”
Kemp said Rivian is facing market forces in the EV sector and shifting initial production of Rivian’s new models will help them get to market faster. Though U.S. EV sales topped 1 million last year for the first time, sales have not kept pace with many bullish predictions in the sector.
Credit: Getty Images for Rivian
Credit: Getty Images for Rivian
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said automakers find themselves in a period between early EV adopters and the tipping point for regular consumers to switch.
“Once we have a better grip on how quickly that transition is going to move, we can make a better forecast on the need for Rivian to need another plant,” he said. “2030 is within the realm of reason.”
For Kemp, the Rivian delay is a particularly thorny problem. The governor trumpeted the project as a landmark economic development triumph in December 2021 as he was ratcheting up his reelection bid.
He defended the 10-figure package of local and state incentives, even as some local residents and conservative GOP officials lambasted them as corporate giveaways.
And his promise to turn Georgia into a hub for electric vehicle and green energy manufacturing contrasts with other national Republican leaders. Former President Donald Trump, who frequently mocks the range of the cars, has warned the EV transformation will kill U.S. jobs in the auto sector.
Traditional automakers see electrification as the future of the industry and are committing tens of billions of dollars in new U.S. factories to that end. Georgia has been one of the biggest beneficiaries.
Including Rivian’s promised jobs and investment, Georgia has attracted more than $25 billion in announced EV supply chain investments and promises of more than 30,000 EV-related jobs since 2018, Kemp’s office has previously said.
Hyundai Motor Group expects to open its $7.6 billion EV factory in Bryan County, known as the Metaplant, either late this year or in early 2025. There, the company will produce electric Genesis, Hyundai and Kia models. And Kia is converting its West Point factory to make electric EV9 SUVs alongside vehicles powered by gasoline.
Cox Enterprises, owner of the AJC, owns about a 4% stake in Rivian.
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