The Atlanta Journal-Constitution
Rivian to sell $1.3B in bonds to support future Ga. plant
EV maker expects to start producing R2 crossover in ’26.
Electric vehicle company
an announced this week it intends to sell $1.3 billion in bonds to help facilitate the launch of a new crossover vehicle it plans to manufacture at its future $5 billion Georgia factory.
The announcement comes as pressure mounts for the California-based startup to shore up its finances after it posted a $6.8 billion loss last year, prompting the com- pany’s stock price to plummet. Rivian’s stock closed Tuesday at $14.64 a share, a new low for the company, and remained less than $15 a share at midday Wednesday.
Irvine, California-based Rivian is an EV startup that currently sells its flagship R1T truck and R1S SUV, along with electric delivery vans. The company had one of the biggest initial public offerings in U.S. history in 2021 and later that year announced plans for a sprawling fac- tory an hour east of Atlanta where it said it would employ 7,500 workers.
Rivian later announced plans to build its R2 cross- over, a lower-priced vehi- cle targeting mainstream consumers, at the Georgia plant. Production of the R2 is slated for 2026.
Inflation, supply chain issues and fears of an economic sl wdown have weighed on all automakers but upstart EV companies in particular.
Rivian said Monday it plans to sell convertible notes, which can be paid back to investors with cash, stock or a mix of both. Investors who purchase the notes will also have the option to buy an addition $200 million in bonds if they choose.
“The capital from this offering will strengthen our balance sheet to facilitate the launch of R2,” a Rivian spokesperson told The Atlanta Journal-constitution.
Rivian ended 2022 with $12.1 billion in cash reserves, but that number is down from $18.4 billion at the beginning of 2022. The com- pany also has initiated two rounds of layoffs since last summer.
Rivian CEO R.J. Scaringe told the AJC last week that the company’s long-term success is staked on itsplanned Georgia factory.
e committed to this state and this project,” he said. “The future of our com- pany 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.”
Grading work is taking place on the 2,000-acre site in southern Morgan and Walton counties. Cox Enterprises, owner of the AJC, owns about a 4% stake in Rivian.
A legal challenge from residents near the proposed factory prompted a local judge to strike down some $700 million in property tax cuts — nearly half of the $1.5 billion incentive package state and local leaders used to woo Rivian to Georgia. The ruling has been appealed.
But Rivian will have the option to terminateits agreement withthestate in May if the lawsuit isn’t concluded in the state’s favor.
The bo nds R i vi an announced this week will mature in March 2029.
During a February call with investors, Rivian officials did not disclose the number of preordered vehicles on backlog, sparking criticism from analysts. Rivian had said Nov. 7 that it had 114,000 vehicles on order in addition to 100,000 vans it is providing Amazon.