Rivian Automotive Inc, an Amazon-backed electric vehicle startup, announced that it will establish a $5 billion plant in Georgia, it’s second in the United States, to expand manufacturing. Rivian also posted a third-quarter loss in its first publicly disclosed quarterly results since going public last month. Rivian’s stock plummeted over 4% in after-hours trade.
The new plant, which is expected to begin in 2024 and eventually produce 400,000 vehicles per year, will engage upwards of 7,500 people and will broadly corroborate plans already described in the paperwork filed with the other states.
Rivian launched its Nasdaq premiere last month in the world’s largest initial public offering (IPO) of 2021, with a market value of about $93 billion. Rivian raised over $14 billion in the IPO to supplement the $10.5 billion company had raised privately from Ford Motor Co and Amazon.com Inc. Rivian is owned by Amazon, which owns 20% of the company, and Ford, which owns around 12%.
As supply-chain restrictions, including chip shortages, strike automakers globally, the Irvine, California-based business has battled with the debut of its R1S SUV, R1T pick-up truck, and delivery van for Amazon. The pickup truck debuted in September, followed by the SUV in December.
The chip scarcity led automakers to reduce vehicle manufacturing during the coronavirus epidemic, and vehicle prices surged as a result of low stocks. Companies are trying to defend their operations from the Omicron coronavirus variant’s spread. Rivian, other startups, and major automakers are vying to dethrone Tesla Inc, the world’s leading electric vehicle manufacturer, as pressure mounts in China and Europe to reduce vehicle emissions.
Rivian’s plant in Georgia will follow the one in Normal, Illinois. The company plans to build plants in China and Europe in the future. Rivian’s CEO, RJ Scaringe, recently stated that the company aims to produce a minimum of one million vehicles per year by the close of the decade. Rivian’s Illinois plant now has a potential of 150,000 vehicles per year, but it plans to grow that to 200,000 by the yeat 2023 as more vehicles are added. According to Scaringe, the R1 range has been sold out till 2023.
Rivian has attracted the attention of stock market investors, who have been bidding up its shares since they began trading in early November. The corporation is worth more than $90 billion, which is more than Ford, another Rivian investor. Rivian’s investments, however, will most certainly take years to pay off. Rivian lost $2.2 billion in the very first 9 months of this year, compared to $665 million in the same period the previous year. In the third quarter, the company only made $1 million in revenue, according to the corporation. As of Wednesday, the business has only sold 386 vehicles and stated it will send its first “saleable” delivery van to the Amazon firm later this month.