ATLANTA — The U.S. government announced Tuesday that the Department of Energy will provide a $6.6 billion loan to Rivian Automotive to build a factory in Georgia that had been put on hold as the startup electric vehicle maker struggled to become profitable.
It is unclear whether the administration will be able to complete the loan before Donald Trump again assumes the presidency in less than two months, or whether the Trump administration will try to recover the money.
Trump had previously promised to eliminate federal tax credits for electric vehicles, which are worth up to $7,500 for new zero-emission vehicles and $4,000 for used ones. Trump later softened his stance when Tesla CEO Elon Musk became a supporter and advisor.
Rivian made waves when it went public and began producing large R1 electric SUVs, pickup trucks and delivery vans at a former Mitsubishi factory in Normal, Illinois, in 2021. Months later, the California-based company announced it would build a second, larger, $5 billion plant about 40 miles east of Atlanta, near the town of Social Circle.
R1 vehicles cost $70,000 or more. The original plan was to produce R2 vehicles, a smaller SUV, in Georgia with lower price tags aimed at a mass market. The first phase of Rivian’s Georgia factory was projected to produce 200,000 vehicles per year, with a second phase capable of producing another 200,000 per year. Eventually, the plant was projected to employ 7,500 workers.
But Rivian couldn’t meet production and sales targets and burned through the money quickly. In March, the company said it would pause construction of the Georgia plant. The company said it would begin assembling its R2 SUV in Illinois instead.
CEO RJ Scaringe said the move would allow Rivian to bring the R2 to market more quickly, sometime in 2026, and save $2.25 billion in capital expenditures. Since then, German automaker Volkswagen AG said in June it would invest $5 billion in Rivian in a joint venture in which Rivian would share software and electric technology with Volkswagen. The money eased Rivian’s cash crisis.
Tuesday’s announcement offers a lifeline to Rivian’s most ambitious plans. The company says its plans to manufacture the R2 and the smaller R3 in Georgia are back on track.
The money would come from the Advanced Technology Vehicle Manufacturing Loan Program, which has $17.7 billion to provide low-cost loans to make fuel-efficient vehicles and components. The program has focused primarily on loans to new electric vehicle battery factories in recent years, but also helped finance the initial production of the Tesla Model S and the Nissan Leaf, two pioneers of electric vehicles in the United States.
The program, created in 2007, requires a “reasonable prospect of repayment” of the loan.
Democratic Sen. Jon Ossoff, who has been a strong supporter of electric and solar vehicle manufacturing in Georgia, praised Tuesday’s announcement as “another historic federal investment in electric vehicle manufacturing in Georgia.” Ossoff had asked Energy Secretary Jennifer Granholm to support the loan in July.
“Our federal manufacturing incentives are driving economic development across the state of Georgia,” Ossoff said in a statement.
Georgia Governor Brian Kemp says his goal is to make Georgia a hub for the electric vehicle industry. But the Republican has had a tense relationship with President Joe Biden’s administration over his industrial policy, even as some studies have found that Georgia has seen more investment in electric vehicles than any other state.
Kemp has claimed that manufacturers were choosing Georgia before Biden’s signature climate law, the Inflation Reduction Act, was passed. Garrison Douglas, a spokesman for Kemp, said earlier this month that the governor wants Trump to prioritize “a market approach to economic growth.”
“Given that the electric vehicle mobility space was already growing in Georgia before the federal government intervened, the governor continues to vocally oppose the Biden administration’s decision to not only pick winners and losers, but impose counterproductive mandates that disfavor to Georgia-based automakers and discourage organic consumer adoption of electric vehicles,” Douglas said.
The loan to Rivian could rescue one of the Kemp administration’s flagship economic development projects even as Biden leaves office. That could put Rivian and Kemp in the position of defending the loan if Trump tries to undo it.
State and local governments offered Rivian an incentive package valued at about $1.5 billion in 2022. The deadline for the company to complete its investment and contracting under that deal was extended to 2030. Neighbors opposed to the site’s development in Georgia filed legal challenges.
State and local governments were projected to spend more than $125 million to purchase the nearly 2,000-acre (810-hectare) site, clearing trees and grading the land. That work has been finished. The state has also completed most of the $50 million in road work it promised.
The pause at Rivian contrasts with rapid construction at Hyundai Motor Group’s $7.6 billion electric vehicle and battery complex near Savannah. The plant in Ellabell, announced in 2022, could grow to 8,500 employees. The Korean automaker said in October that it has started production there.