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What you need to know
- Rivian, an EV start-up announced on Monday night that it has been approved for a first loan by the U.S. Government to construct a factory.
- The company could receive a $6.6 billion loan from the Department of Energy's Advanced Technology Vehicle Manufacturing program, pending legal and environmental hurdles.
- If approved, Georgia’s facility could produce as many as 400,000 vehicles a year.
Rivian announced on Monday night that they had received a new contract. “conditional commitment” Department of Energy, for a $6.6 Billion loan to fund the construction of an industrial facility in Georgia.
Electric vehicle makers must overcome technical, legal, environmental, and other hurdles to convert the conditional loan into a fully funded loan.
The Department of Energy’s Loan Programs Office previously provided loans to Tesla (TSLA), Ford F, and Nissan.
Loan Would Allow Rivian to 'More Aggressively Scale' Production by 2030
“This loan will help create thousands of new American jobs and further strengthen U.S. leadership in EV manufacturing and technology,” Rivian CEO RJ Scaringe said, noting that it would allow Rivian to "more aggressively scale" its U.S. manufacturing capacity.
Rivian stated that it will complete the Georgia plant in two phases. Once completed, it should be able to produce 400,000 vehicles annually. Rivian says that its construction and operations will generate thousands of jobs until 2030.
Rivian stock had been boosted by the announcement made Monday from California Governor. Gavin Newsom said the state will restart its new version “Clean Vehicle Rebate Program” if President-elect Donald Trump axes federal tax credits for EVs upon taking office—which he is expected to do.
Newsom said a new version of the program could come with "changes to promote innovation and competition" in the industry. Wedbush analyst wrote on Tuesday that this could be a sign of the removal of Tesla cars from the program. This would give a boost to competitors such as Rivian.
Rivian stocks have moved in opposite directions during the opening hour of Tuesday’s trading, falling nearly half their value from the start of the year.
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