Rivian Automotive Inc. has secured a hefty $827 million in state incentives to quickly rev up its electric-vehicle manufacturing capabilities in Illinois, ditching plans to build a plant in Georgia. The funds, largely comprising tax credits under the state's Reimagining Energy and Vehicles in Illinois (REV Illinois) program, promise to deliver over 550 jobs and a $1.5 billion investment from the EV maker, the Chicago Tribune reported.
The EV manufacturer, already employing 7,000 assembly workers at its Normal facility, decided to cancel its proposed $5 billion facility in Georgia. The move is expected to save Rivian a considerable $2.25 billion in capital expenses by building its new midsize R2 SUV alongside its existing R1 lineup in Illinois. A staggering number of preorders, over 68,000 for the R2, took place within the first 24 hours of its unveiling, suggesting a vibrant market demand, according to Bloomberg.
Illinois Governor J.B. Pritzker, behind the push for the incentives, said, "They're growing now and they had the opportunity to grow in Georgia or in Illinois," as reported by the Chicago Tribune. The state's strategy to keep Rivian expansions local is part of a broader effort to turn Illinois into an EV industry hub. The capital investment from Rivian is set to expand the production capacity of the Normal plant to 215,000 vehicles annually.
While Rivian's journey wasn't without its bumps—the company lost over $1.5 billion in the fourth quarter of 2023 and saw its shares tumble from highs post-IPO—news of the incentive package sent shares upwards nearly 7% at the close. This support from the state aims to ensure Rivian's new model can efficiently come to market, providing "even greater consumer choice for EVs," Rivian CEO and founder R.J. Scaringe said in a release obtained by Bloomberg. The package demands Rivian to keep at least 6,000 jobs, underlining the state's dedication to long-term employment sustainability.
Despite the company's need to significantly ramp up production quickly, Rivian will also have to ensure the availability of labor. Illinois is investing not only in the physical expansion of Rivian's facilities but also in human capital, funding a new manufacturing training academy that will feature an apprenticeship program for local high schools, as outlined by Bloomberg.
