Biden to Loan Rivian $6.6B to Build Georgia Factory

President Joe Biden's administration announced Tuesday that the U.S. Department of Energy will make a $6.6 billion loan to Rivian Automotive to build a factory in Georgia that had stalled as the startup automaker struggled to become profitable.

It's unclear whether the administration can complete the loan before Donald Trump becomes president again in less than two months, or whether the Trump administration might try to claw the money back.

Trump previously vowed to end federal electric vehicle tax credits, which are worth up to $7,500 for new zero-emission vehicles and $4,000 for used ones. Trump later softened his stance as Tesla CEO Elon Musk became a supporter and adviser.

Rivian made a splash when it went public and began producing large electric R1 SUVs, pickup trucks and delivery vans at a former Mitsubishi factory in Normal, Illinois, in 2021. Months later, the California-based company announced it would build a second, larger, $5 billion plant about 40 miles (64 kilometers) east of Atlanta, near the town of Social Circle.

The R1 vehicles cost $70,000 or more. The original plan was to produce R2 vehicles, a smaller SUV, in Georgia with lower price tags aimed at a mass market. The first phase of Rivian’s Georgia factory was projected to make 200,000 vehicles a year, with a second phase capable of another 200,000 a year. Eventually, the plant was projected to employ 7,500 workers.

But Rivian was unable to meet production and sales targets and rapidly burned through cash. In March, the company said it would pause construction of the Georgia plant. The company said it would begin assembling its R2 SUV in Illinois instead.

CEO RJ Scaringe said the move would allow Rivian to get the R2 to market more quickly, sometime in 2026, and save $2.25 billion in capital spending. Since then, German automaker Volkswagen AG said in June it would invest $5 billion in Rivian in a joint venture in which Rivian would share software and electrical technology with Volkswagen. The money eased Rivian's cash crunch.

Tuesday's announcement throws a lifeline to Rivian's grander plans. The company says its plans to make the R2 and the smaller R3 in Georgia are back on.

The money would come from the Advanced Technology Vehicles Manufacturing Loan Program, which has $17.7 billion to provide low-cost loans to make fuel-efficient vehicles and components. The program has focused mostly on loans to new battery factories for electric vehicles in recent years but also helped finance the initial production of the Tesla Model S and Nissan Leaf, two electric vehicle pioneers in the U.S.

The program, created in 2007, requires a "reasonable prospect of repayment" of the loan.

Democratic U.S. Sen. Jon Ossoff, who has been a vocal supporter of electric vehicle and solar manufacturing in Georgia, hailed Tuesday's announcement as “yet another historic federal investment in Georgia electric vehicle manufacturing.” Ossoff had asked Energy Secretary Jennifer Granholm to support the loan in July.

“Our federal manufacturing incentives are driving economic development across the state of Georgia,” Ossoff said in a statement.

Georgia Gov. Brian Kemp says his goal is to make Georgia a center of the electric vehicle industry. But the Republican has had a strained relationship with the Biden administration over its industrial policy, even as some studies have found Georgia has netted more electric vehicle investment than any other state.

Kemp has long claimed that manufacturers were picking Georgia before Biden's signature climate law, the Inflation Reduction Act, was passed. Garrison Douglas, a spokesperson for Kemp, said earlier this month that the governor wants Trump to prioritize “a market-based approach to economic growth.”

“As the e-mobility space was already growing in Georgia before the federal government’s intervention, the governor remains vocally opposed to the Biden administration’s decision to not only pick winners and losers but impose counterproductive mandates that disadvantage Georgia-based auto manufacturers and disincentivizes organic consumer adoption of electric vehicles," Douglas said.

The loan to Rivian could rescue one of the Kemp administration's signature economic development projects even as Biden leaves office. That could put Rivian and Kemp in the position of defending the loan if Trump tries to quash it.

State and local governments offered Rivian an incentive package worth an estimated $1.5 billion in 2022. The deadline for the company to complete its investment and hiring under that deal was extended to 2030. Neighbors opposed to development of the Georgia site mounted legal challenges.

State and local governments were projected to spend more than $125 million to buy the nearly 2,000-acre (810-hectare) site, clear trees and grade land. That work has been finished. The state also has completed most of $50 million in roadwork that it pledged.

The pause at Rivian contrasts with rapid construction at Hyundai Motor Group’s $7.6 billion electric vehicle and battery complex near Savannah. The plant in Ellabell, announced in 2022, could grow to 8,500 employees. The Korean automaker said in October that it has begun production there.