By Ed Ludlow | Bloomberg
Rivian Automotive Inc. is halting plans to build a new multibillion-dollar factory in Georgia, an abrupt reversal aimed at cutting costs while the company prepares to launch a cheaper electric vehicle.
The decision will save the automaker more than $2.25 billion in capital expenditures, the company said in a filing Thursday.
Shifting planned production of the forthcoming R2 model to an existing facility in Illinois will allow Rivian to begin deliveries in the first half of 2026, earlier than expected. The surprise announcement plunges the high-profile factory project into uncertainty, but Chief Executive Officer RJ Scaringe said it remains important to the company.
Also see:Â Irvine-based Rivian has a cash problem as EV demand slows
Shares of the automaker jumped as much as 16% after the announcement, their biggest gain since July. The stock was already down more than 50% this year through Wednesday on concerns over Rivian’s cash and consumer demand for its products.
Rivian in 2022 secured a $1.5 billion package of state and local incentives — the biggest in Georgia’s history — to build the massive plant outside Atlanta.
The company pledged at the time to create 7,500 jobs by the end of 2028, winning praise from local lawmakers.
Also see:Â Irvine-based Karma Automotive marks 10 years with eyes on new luxury EVs
The retreat comes two weeks after Rivian announced job cuts and said it would keep production flat this year, falling well short of expectations and triggering a heavy sell-off in the shares. The company has struggled to transition to mass production since going public in 2021, and the high prices of its models have been a hard sell as overall demand for EVs fades.
Rivian has never made a profit and it lost more than $40,000 on every vehicle it delivered in last three months of 2023.
Also see:Â EVs eligible for $7,500 US tax credit cut to 13 from about 24
Also on Thursday, Scaringe unveiled the long-anticipated…
Read the full article here
