It’s ‘do or die’ for electric vehicle maker Rivian as it breaks ground on a $5 billion plant

Hey there, time traveller!
This article was published 16/09/2025 (381 days ago), so information in it may no longer be current.

SOCIAL CIRCLE, Ga. (AP) — It seems like a terrible time to build an electric vehicle plant in the United States, but Rivian Automotive leaders say they’re confident as the company starts long-delayed work on a $5 billion facility in Georgia.

The money-losing California-based company broke ground Tuesday east of Atlanta despite President Donald Trump’s successful push to roll back electric vehicle tax credits. Starting Sept. 30, buyers will no longer qualify for savings of up to $7,500 per car.

CEO RJ Scaringe said Tuesday that Rivian will sell its R2 sport utility vehicles not for environmental or tax incentive reasons, but because it’s a superior vehicle.

“The description I’ll say for R2 is it isn’t an electric vehicle,” he said. “I describe R2 as an incredible five-passenger offroad machine. And it happens to be electric.”

Georgia plant is key to a mass market and profitability

The Georgia plant, first announced in 2021, is Rivian’s key to reaching profitability. Now the company makes the high-end R1T pickup truck and the R1S SUV in Normal, Illinois, as well as delivery vans for Amazon and others. Its truck prices start at $71,000.

The Illinois plant will begin making the smaller R2 next year, with prices starting at $45,000. An expanded Illinois plant will be able to assemble 215,000 vehicles yearly. But if the R2 is a hit, and if Rivian successfully produces an even smaller R3, it will need more capacity. Scaringe said the Georgia operation, able to make 200,000 vehicles yearly starting in 2028, is the “foundation for our growth.” Rivian plans another 200,000 in capacity in phase two, volume that would spread fixed costs over many more vehicles.

The projections would be a big leap from the 40,000 to 46,000 vehicles Rivian expects to deliver this year, down from 52,000 last year. The company says it’s limiting production in part to launch 2026 models.

“For Rivian, it’s do-or-die time,” said Alex Oyler, North American director of auto research firm SBD Automotive. “We saw with Tesla that the key to profitability is scale, and you can’t scale if your cheapest vehicle is $70,000. So they need that plant online to achieve a level of scale of R2 and ultimately R3.”

Challenges in the electric vehicle market

Sales growth is slowing for electric vehicles in the United States, rising only 1.5% in 2025’s first half, according to Cox Automotive.

Tesla accounted for almost 45% of U.S. electric vehicle sales in that period, according to Cox. But the giant is losing market share as others gain: General Motors’ slice of American EV sales has climbed to 13%. By comparison, Rivian had a 3% share in the first half of the year, behind Tesla and six traditional automakers.

But excluding Tesla, Rivian is the most successful startup automaker.

The company initially tapped a largely unfilled niche: demand for electric pickups and SUVs. But competition now includes Ford’s F-150 Lightning and the electric Chevrolet Silverado.

After an initial public offering in 2021, Rivian shares have fallen by more than 80%, while automaker shares overall have outpaced the broader stock market. Rivian lost $1.66 billion in 2025’s first half.

At the same time, some automakers’ ardor for electric vehicles is cooling. Stellantis last week canceled Ram’s electric truck program. Ford has delayed production at a new Tennessee plant. And General Motors abandoned plans to build electric vehicles in suburban Detroit.

“With all the competition out there in this market and the slowing growth of EVs, it does not play in Rivian’s favor,” said Sam Fiorani, a vice president at AutoForecast Solutions. “However, there still is an EV market out there.”

$1.5 billion in incentives for 7,500 jobs

Georgia has pledged $1.5 billion of incentives to Rivian in exchange for 7,500 company jobs paying at least $56,000 a year on average. Rivian can’t benefit from most incentives unless it meets employment goals, but the state is already spending $175 million to buy and grade land and improve roads.

Georgia Republican Gov. Brian Kemp, says he wants to make Georgia “the electric mobility capital of America,” but acknowledged Tuesday that “the road to get here has not been smooth.” He voiced confidence that Rivian can deliver “an innovation revolution” benefitting Georgians.

While Tesla has thousands of employees in California and Texas, some new electric vehicle plants have sputtered. Two separate EV makers that hoped to assemble vehicles in a former GM plant in Lordstown, Ohio, went bankrupt. Georgia’s Hyundai complex near Savannah is faring better, with production underway. However, a battery plant there has been delayed by U.S. Immigration and Customs Enforcement arresting 475 people on site, including more than 300 South Koreans.

Rivian was supposed to be making trucks by now at the 2,000-acre (800-hectare) site near Social Circle, about 45 miles (70 kilometers) east of Atlanta. As the company burned through cash in 2024, it paused construction. But German automaker Volkswagen agreed to invest $5.8 billion in Rivian in exchange for software and electrical technology. And then-President Joe Biden’s administration agreed to loan Rivian $6.6 billion to build the Georgia plant.

Despite the Trump administration’s hostility toward EVs, Scaringe said Tuesday that Rivian has built “a very close relationship” with the U.S. Department of Energy and that the company’s goals align with some of Trump’s big ones, including “U.S. manufacturing, U.S. technology, U.S. technology that supports global business, and leading in all those areas.”

Kemp said he has urged Energy Secretary Chris Wright to back Rivian.

Some neighbors still oppose the plant

Rivian also faces opposition from some residents who say the plant is an inappropriate neighbor to farms and will pollute the groundwater.

“I planned on dying and retiring on the front porch and the biggest project in Georgia has to go next door to me, of all places in the country?” asked Eddie Clay, who lives less than a mile away. He says his well water turned mud-choked after excavation at the Rivian site.

There are other challenges for Rivian, including tariffs costing $2,000 per vehicle, the Trump administration ending a tax-credit program that will cost the company $140 million in revenue this year, and long-term threats from low-priced, cutting-edge Chinese EVs. But Scaringe said the start of construction shows Rivian is working through its challenges.

“These are not the kinds of things you start without having clear sight to be able to fully finish and launch,” he said.

___

St. John reported from Detroit.