Biden Administration To Loan Rivian $6.6 Billion For EV Factory
Rivian's R1S electric SUV. Image credit: Rivian
The Biden Administration has agreed a huge loan to a US electric vehicle (EV) manufacturer, that is sure to anger the incoming Donald Trump Administration as well as his chief supporter, Elon Musk.
The Loan Programs Office (LPO) of the Biden Administration’s Department of Energy (DoE), announced on Tuesday “a conditional commitment to Rivian New Horizon, LLC of up to $6.57 billion to finance the development and construction of Project Horizon, an EV manufacturing facility located in Stanton Springs North, Georgia.”
This is a second piece of good news for Rivian Automotive so far this month.
Rivian’s R1T electric pickup truck. Image credit: Rivian
Conditional loan
Now as part of the Biden-Harris Administration’s ‘investing in America agenda,’ the DoE’s LPO announced a conditional commitment for a direct loan of up to $6.57 billion (including $5.9 billion of principal and $592 million of capitalised interest) to finance the development and construction of Project Horizon.
Project Horizon will be an electric vehicle (EV) manufacturing facility in Stanton Springs North, and it will also be supported by an equity investment from Rivian.
It comes after Rivian in March had said it would pause construction of the Georgia plant. The company said it would begin assembling its R2 SUV at its Illinois factory instead.
According to the DoE’s LPO, the $6.57 billion loan from the Biden Administration for the Georgia plant should support up to 2,000 full-time jobs through construction, and eventually 7,500 operations jobs by 2030.
It said if finalised, the loan will support construction of a nine million square foot facility to manufacture up to 400,000 mass-market electric sport utility vehicles (SUVs) and crossover vehicles.
Since 2021, Rivian produces its large electric R1 SUVs, pickup trucks and delivery vans at its former Mitsubishi factory in Normal, Illinois.
The R1 vehicles cost $70,000 or more, but Rivian plans for the Georgia facility to produce R2 vehicles, a smaller SUV, with lower price tags aimed at a mass market.
Rivian response
Rivian confirmed that the loan, if finalised, would expand “the company’s domestic production capacity to support demand from the United States and international markets.”
“This loan will help create thousands of new American jobs and further strengthen US leadership in EV manufacturing and technology,” said Rivian Founder and CEO RJ Scaringe.
“This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize both capability and affordability,” said Scaringe.
“A robust ecosystem of US companies developing and manufacturing EVs is critical for the US to maintain its long-term leadership in transportation.”
Trump issue
The DoE and Rivian must satisfy certain technical, legal, environmental, and financial conditions before the Department of Energy enters into definitive financing documents and funds the loan.
And there is another potential fly in the ointment, in the form of Donald Trump, as the Trump administration is reportedly planning to repeal a consumer tax credit of up to $7,500 for the purchase of EVs, although doing so would require an act of Congress.
And already a Trump appointee has signalled his opposition to the loan, and stated the loan seems to be directed at Trump’s largest financial supporter, Elon Musk and Tesla.
Vivek Ramaswamy, who will co-run (alongside Elon Musk) the new non-governmental commission called the Department of Government Efficiency (Doge) that aims to “improve government efficiency, tweeted that the loan “smells more like a political shot across the bow at Elon Musk and Tesla.”
Meanwhile the future Rivian factory in Georgia already faces competition from Hyundai Motor Group’s $7.6 billion electric vehicle and battery complex near Savannah, Georgia.
Hyundai said in October that the facility in Ellabell, where it plans to eventually employ 8,500, has already begun production.