Rivian Automotive announced Thursday that it is canceling plans for a $5 billion factory that has yet to be built in Georgia. On the same day, the company launched a budget electric car designed to rival Elon Musk’s Tesla.
Production of the next R2 model, an electric midsize SUV that can spin to 60 mph in less than three seconds, will be repurposed at the California-based automaker’s existing facility in Illinois.
Rivian said the move would allow it to begin delivering the $45,000 vehicles as early as the first half of 2026.
Rivian’s latest model is being touted as a cheaper EV product, which Rivian said in a statement to the Post, “is priced within reach of many people,” but that will not happen until sometime in 2024. It sounds like something like that. Tesla Model Yprices start at $36,490, according to the automaker’s website.
Rivian had previously said only that the R2 would go on sale sometime in 2026, but did not say when until Thursday, when it announced a delivery date of either the first or second quarter of 2026. The company announced that the sales were brought forward earlier than expected.
“We were able to achieve that accelerated timing by leveraging Normal’s production capacity and leveraging our Illinois location to launch R2 and bring it to market as quickly as possible,” said CEO RJ Scaringe. ” he said.
At its Midwest factories, Rivian also makes electric delivery vans.
A Rivian spokesperson said the manufacturing site can produce as many as 150,000 vehicles a year.
Rivian said it expects the addition of the R2, a five-seat version of its R1 large SUV, to bring the plant’s total annual production capacity to 215,000 units.
The move was also touted as a way to save automakers $2.25 billion in capital expenditures amid weak demand for EVs, the company said. An analytics company received some bad press earlier this week for revealing how tire emissions pollute the air. Therefore, it is not as environmentally friendly as consumers initially thought.
“This will certainly relieve some of the pressure on the continued large cash investments required for the Georgia factory,” said Revere investor and expert in electric vehicles and autonomous mobility. One Vitaly Golomb said.
“We also hope they can be conservative and bring the delivery date forward even further.”
The company has assured that it has sufficient capital to fund the business through the launch of R2.
The automaker’s shares rose as much as 16% after the announcement, the biggest gain since July. According to Bloomberg.
Rivian stock rose 13% to close at $12.51.
But the stock has fallen more than 45% since the beginning of the year amid concerns about Rivian’s cash and consumer demand for its products.
Rivian produced 57,232 vehicles last year, but growth will be flat this year as the division grapples with a slowdown and a weeks-long production shutdown for upgrades aimed at cutting costs and boosting margins. He said it would be.
Despite the immense popularity of SUVs and pickup trucks in the United States, ramping up production and generating demand beyond the initial wave of enthusiasts has been an uphill battle.
More popular EV makers like BYD (which dethroned Tesla as the EV leader in the quarter ending Dec. 31) haven’t posted significant profits so far this year.
Analysts say this decline is due to concerns about a decline in demand in the EV market, which could force companies to cut prices and reduce profit margins.
Still, Rivian plans to move forward with construction of its Georgia factory, which will be located outside of Atlanta, but says the schedule will be delayed.
The planned facility in Georgia “remains a vital part of our long-term strategy,” the company said.
with post wire
