The Strategist

Tesla rival decides to build $5B new plant in US

12/20/2021 - 07:41

Electric car maker Rivian has decided to build a new plant in the US for $5 billion to boost sales. The company held its IPO in November and the shares are now trading at more than a third of the offering price.

Sandy Campbell
Sandy Campbell
Electric car maker Rivian will build a new plant in the US state of Georgia, according to a statement on the company's website. This will be the company's second facility in the country. Investments in the project will amount to $5 billion.

Rivian plans to eventually employ more than 7,500 people at the plant. Construction will be Rivian's "aggressive" scale-up phase and a step towards increasing production volumes. The Georgia plant will be able to produce up to 400,000 vehicles per year - double the planned capacity of the first plant in Illinois. Construction is scheduled to begin in the summer of 2022, with production of electric vehicles starting in 2024.

In addition, the company is expanding its existing capacity in Illinois. Rivian has received approval to expand the plant in Normal to 4 million square feet (approximately 370,000 square metres). By the second quarter of 2022, the manufacturer intends to add 800 to 1,000 people to the plant's workforce.

Rivian held an IPO in November and raised nearly $13.5 billion, with the offering at the top end of the $78 price range. At the close of trading on December 16, Rivian's shares were $108.87 per paper - up 39% from the offering price, according to Nasdaq stock exchange data. Rivian shares fell 5.33 percent on Dec. 16.

In its first public filing after the IPO (for the third quarter of the year), Rivian said it pre-ordered 71,000 electric cars and 100,000 vans for Amazon. The company said its third-quarter revenue was $1 million after the first vehicle deliveries, which began in September.