Rivian Automotive Inc. is suspending plans to build a new multibillion-dollar plant in Georgia, a sharp turnaround aimed at cutting costs as the company prepares to produce a cheaper electric vehicle.
The decision will allow the automaker to save more than $2.25 billion in capital expenditures, the company reports. said in Thursday’s filing. Shifting planned production of the upcoming R2 model to its existing plant in Illinois will allow Rivian to begin deliveries in the first half of 2026, earlier than expected. The surprise announcement throws the high-profile plant project into uncertainty, but chief executive RJ Scaringe said it remained important to the company.
Following the announcement, the automaker’s shares jumped 16%, their biggest gain since July. Rivian shares had already fallen more than 50% this year through Wednesday due to concerns about Rivian’s cash flow and consumer demand for its products.
Rivian in 2022 received $1.5 billion package state and local incentives – the largest in Georgia history – to build a huge plant outside Atlanta. At the time, the company promised to create 7,500 jobs by the end of 2028, earning praise from local lawmakers.
The retreat will take place two weeks after Rivian’s announcement job cuts and said output would remain flat this year, well below expectations and triggering a strong sell-off in stocks. The company has struggled to move into mass production since going public in 2021, and high prices for its models have made it difficult to sell as overall demand for electric vehicles falls. Rivian never turned a profit and lost more than $40,000 on every vehicle it delivered in the last three months of 2023.
Also on Thursday, Scaringe unveiled the highly anticipated R2, an electric midsize SUV that will start at around $45,000. That’s about $30,000 less than Rivian’s existing SUV and just below the average new car price in the United States, which is more than US$48,000.
The two-row SUV will be available with two battery pack sizes, with the larger option offering a range of more than 300 miles on a single charge. Buyers will be able to choose one, two or three engine options for the SUV. Rivian has also equipped the car with more advanced autonomous technology, with a sensor suite consisting of 11 cameras and five radars.
Read more: Elon Musk says Rivian needs to ‘significantly cut costs’ and its executives need to ‘live in the factory’ for struggling rival Tesla to survive
Rivian, one of America’s few electric vehicle makers, is trying to win market share from Tesla Inc. The new model is aimed at the mass market for the first time. The efforts underscore automakers’ efforts to cut costs as demand for electric vehicles slows. Ford Motor Company. To China BID Company price reduction.
Scaringe also surprised investors with a prototype of a future EV crossover called the R3. Rivian said the model would be priced lower than the R2, without specifying a dollar amount or a time frame for when it might be built.
Rivian currently produces two consumer electric vehicles: Pickup R1T And R1S SUVAnd commercial van first of all for Amazon.com Inc., its largest shareholder. All are built at the Normal, Illinois plant.