Rivian, a US electric vehicle company, announced on Monday that it has won a $6.6 billion conditional loan from the US Department of Energy to restart its Georgia assembly plant plan.
In March, Rivian suspended the development of the factory due to funding issues. At the time, Rivian reassured that although the Georgia assembly plant was facing obstacles, the R2 cars produced at its Illinois factory were expected to save the company over $2 billion in costs.
The loan from the US Department of Transportation will greatly alleviate Rivian's financial concerns. Rivian CEO RJ Scaringe stated that this loan will help the company actively expand its production base in the United States and produce R2 and R3 models at competitive costs.
The upcoming payment to Rivian is part of the US Department of Energy's Advanced Technology Vehicle Manufacturing Program, which aims to support the development of the US electric vehicle industry as much as possible through billions of dollars in federal loans in the last two months before the Biden administration leaves office.
The final guarantee?
The US Department of Energy stated that this loan will support the Biden Harris administration's goal of achieving zero emissions for half of all new cars sold by 2030. To fulfill this commitment, the Biden administration has invested billions of dollars in funding climate related agendas across the United States.
However, the Ministry of Energy also emphasized that Rivian needs to meet certain technical, legal, environmental, and financial conditions before reaching a final loan disbursement agreement. This also means that the White House must complete these coordination procedures within just two months, otherwise it will face intervention from President elect Trump after taking office.
According to the loan documents, Rivian's funding this time will include $5.975 billion in principal and $592 million in capitalized interest, which will be allocated by the Biden administration's Loan Program Office. If everything goes smoothly, this funding will help Rivian's Georgia factory achieve its goal of a two-stage total annual production capacity of 400000 vehicles, with the first phase expected to officially start production in 2028.
Rivian pointed out that other American car manufacturers have also utilized similar government supported loan programs, including Tesla, General Motors, and Ford, as well as battery supply chain companies such as Redwood Materials and Lithium Americas.
This will also become one of the means used by the electric vehicle industry to hedge against the cancellation of electric vehicle subsidies by the Trump administration. The Trump administration has repeatedly threatened to revoke Biden's electric vehicle tax credit measures after taking office.