Rivian Gains $827M Boost from Illinois for Factory Expansion

Electric vehicle manufacturer Rivian has secured a significant incentive package worth $827 million from the state of Illinois to expand its factory.

The funding provided by the Illinois Department of Commerce and Economic Opportunity will support the growth of the existing factory and build out supporting infrastructure.

Following this announcement, Rivian’s stock staged a bull run, opening at $9.42 on May 2 before rallying as high as $10.08. However, it shed some of those gains to close the day at $9.83, representing a 6% gain.

The expansion plans are set to begin in the coming months, with Rivian aiming to increase production capacity at the factory. The company had initially planned to build its next-gen electric vehicle, the R2, at a new factory in Georgia but decided to move to Illinois instead.

The company says this decision will allow it to move up the timeline for the R2 SUV and save around $2 billion in the process. The R2 SUV, set to debut in 2026 with a starting price of around $45,000, will offer a more affordable option for consumers.

Despite the success of its initial public offering (IPO) in 2021, Rivian has faced continued losses and struggles to scale production. Its shares took a 17% loss after the company announced plans to cut down on its production from 81,700 to 57,000 last January.

Earlier this year, the company announced a 10% cut in its workforce, a move analysts blamed on Rivian’s low revenue inflow.

Whether this Illinois deal will help revamp the company’s growth strategy and put its next revenue call on a bull run remains to be seen.

Be that as it may, this deal sends a message to competitors like Tesla, Ford, and GM who rank as market leaders in the EV sector. However, with a scale in production lined up, Rivian could finally belong to that rank in the coming years.