The Atlanta Journal-Constitution
Kemp, Rivian double down on $5B factory
Legal battles, supply chain woes won’t kill plans, officials say.
The chief executive of electric vehicle startup Rivian took to the State Capitol on Wednesday, working to forge friendships under the Gold Dome, and reinforced the company’s long-term commitment to Georgia and its future $5 billion factory.
A gauzy “Rivian Day” with state leaders was a show of unity that came at a tumultuous time for the company, which said Tuesday it lost $6.8 billion in 2022 as it struggled with supply chain problems that dogged the vehicle manufacturer last year.
To make up lost ground, the company said it expects to manufacture roughly 50,000 vehicles this year at its existing factory in Illinois, more than doubling its 2022 output. Rivian told shareholders it will narrow its losses this year as the produc- tion issues that have plagued the manufacturer become easier to handle.
In an interview with The Atlanta Journal-constitution, Rivian CEO R.J. Scaringe said his company’s future profitability is staked on its planned Georgia factory, which will manufacture a new crossover targeting mass markets.
“We’re committed to this state and this project,” he said. “The future of our company in terms of scaling and growing really relies on the future of this project. There’s not another option. We’re not planning an alternative. This must work.”
The state is embroiled in a legal battle over property tax incentives that were offered to Rivian in exchange for the future EV plant in southern Morgan and Walton coun- ties, which is promised to employ 7,500 Georgians. A legal challenge from residents near the proposed fac- tory prompted a local judge to strike down some $700 million in tax cuts, which are currently in the hands of an appellate court panel.
If the lawsuit isn’t con- cluded in the state’s favor by May, Rivian has the ability to terminate its agreement with the state, according to the company’s economic development agreement. However, Gov. Brian Kemp told the AJC he expects to prevail in court.
“We’re very confident in our legal position.” he said.
The Rivian Day event mir- rored a recent celebration of Kia in January, both of which highlight Georgia’s emergence as a nationwide leader in EV manufacturing. Kia’s parent company, Hyun- dai Motor Group, is building a $5.54 billion EV factory near Savannah and is part- nering with SK Innovation to build a multibillion-dol- lar EV battery factory in Bartow County. A Development of Regional Impact application was submitted for regu- latory review Tuesday.
The state House also approved a bill Wednesday that could expand electric vehicle charging across the state, aiming to bolster the state’s EV infrastructure.
Scaringe’s trip to Georgia was also designed to rebuild ties with state lawmakers after the electric vehicle company became an unexpected lightning rod in the 2022 election.
In his failed GOP primary challenge against Kemp, former U.S. Sen. David Perdue and other far-right Repub- licans tried to tap into the frustration of residents of the rural area 45 miles east of Atlanta where opponents have gone to court to stop the development.
“There’s local opposition there, but the vast majority of people are excited about the plant,” said Kemp. “They’re excited about the oppor- tunities for better paying jobs in that part of the state, and their kids won’t have to leave to go to Atlanta or anywhere else to work for a cool advanced manufactur- ing company in their state.”
Though Kemp dem o lished Perdue in the May primary, Perdue’s promise to kill one of the largest eco- nomic development proj- ects in state history served as a wakeup call to Rivian executives to foster better relations with local officials and state politicians.
“Even the strongest detractor, we hope to make a fan,” Scaringe said at the event. “That takes time, it takes rep- etition and it takes us continuing to execute on the things we say are important to us.”
Even so, there remain signs of strain. Budget writers in the House and Senate did not include a $56 million appropriation that Kemp requested for a Rivian worker training center in the midyear budget, saying it’s not needed until next year.
And many lawmakers remain concerned about the $1.5 billion package of subsidies, tax incentives and infrastructure improvements that state and local leaders offered Rivian to build a vehi- cle and battery plant. The biggest portion of that deal is the local property tax break that a local judge rejected that’s now before the state Court of Appeals.
Though the incentives remain in legal limbo, grading at the East Atlanta Megasite has been underway for months.
“We’re moving dirt,” Scaringe said. “A lot of the work that needs to go into the site prep is already underway. It’s emblematic of the confidence that exists.”
Rivian’s stock plummeted following the company’s fourth quarter earnings call with investors, closing Wednesday at a new low: below $16 a share. When the company first went public in 2021, the stock peaked at nearly $130 per share. Cox Enterprises, owner of The Atlanta Journal-constitution, owns about a 4% stake in Rivian and holds a board seat.
Rivian drew criticism from analysts this week by refusing to disclose the number of preordered Rivian vehicles on backlog. Rivian had said Nov. 7 that it had 114,000 vehicles on order in addition to 100,000 vans it is providing Amazon.