Rivian (RIVN) announced late Thursday night that it has received a “conditional commitment” from the Department of Energy (DOE) for a $6.6 billion loan, highlighting Rivian’s improving capital situation.
The loan, part of the Department of Energy’s Advanced Technology Vehicle Manufacturing (ATVM) program, will support construction of Rivian’s upcoming assembly plant located outside Atlanta. Rivian paused development of the site in March over concerns about its capital position. At the time, Rivian said building the upcoming R2 vehicles at its existing factory in Normal, Illinois, would save the company more than $2 billion in costs.
If the new DOE loan is completed, it will relaunch Revan’s plans to develop an assembly plant in Georgia.
Rivian stock opened lower but reversed higher in midday trading.
“This loan will enable Rivian to more aggressively expand our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize capability and affordability,” RJ Scaring, Rivian CEO, said in a statement. “is critical for the United States to maintain its long-term leadership in transportation.”
Rivian said it must meet certain technical, legal, environmental and financial conditions before the Energy Department can enter into the loan agreement. If completed, Rivian said it will build the facility in two phases, each producing 200,000 units of annual production capacity, for a total of 400,000 units of annual capacity, which Rivian claims will support “the sale of American electric vehicles in international markets.” The first phase of the project is expected to begin production in 2028.
Meanwhile, Rivian will continue to build its R2 and R3 vehicles at the Normal plant, with production scheduled to begin in the first half of 2026.
Rivian notes that other US automakers have taken advantage of similar government-backed loan programs, including Tesla (TSLA), GM (GM), and Ford (F), including battery supply chain companies like Redwood Materials and Lithium Americas.
Rivian receiving conditional approval for a $6.6 billion Department of Energy loan comes on the heels of another big financial win for the company. Company in mid-November Announced the expansion of its partnership with Volkswagen (VWAGY), as the German automaker pumped more money into a joint venture. Volkswagen will increase its total investment in the deals to $5.8 billion from $5 billion.
The joint venture will begin operations in North America and eventually expand to Europe. The companies said they will also support the development of electric vehicles in the small car segment.