ATLANTA — President Joe Biden’s administration announced Tuesday that the U.S. Department of Energy will make a $6.6 billion loan to Rivian Automotive to build a factory in Georgia that had stalled as the startup electric vehicle maker struggled to become profitable.
It’s unclear whether the administration can complete the loan before President- elect Donald Trump begins his term in less than two months, or whether the Trump administration might try to claw back the money.
Trump previously vowed to end federal electric vehicle tax credits, which are worth up to $7,500 for new zero-emission vehicles and $4,000 for used ones.
Rivian made a splash when it went public and began producing large electric R1 SUVs, pickups 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.
The R1 vehicles cost $70,000 or more. The company plans 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 is projected to make 200,000 vehicles a year, with a second phase capable of another 200,000 a year. Eventually, the plant is projected to employ 7,500 people.
But Rivian was unable to meet production and sales targets and rapidly burned through cash. 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 start selling the R2 sooner and save $2.25 billion in capital spending. 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 electrical technology with Volkswagen. The money eased Rivian’s cash crunch.
Tuesday’s announcement throws a lifeline to Rivian’s grander plans. The company said its plans to make the R2 and the smaller R3 in Georgia are back on and that production will begin in 2028.
The Department of Energy said the loan would substantially boost electric vehicles made in the United States and support the Biden administration’s goal of having zero-emission vehicles make up half of all new U.S. sales by 2030.
The loan includes $6 billion plus $600 million in interest that will be rolled into the principal. The money would come from the Advanced Technology Vehicles Manufacturing Loan Program, which provides low-interest loans to make fuel-efficient vehicles and components.
The program has focused mostly on loans to new battery factories for electric vehicles under Biden but earlier helped finance initial production of the Tesla Model S and Nissan Leaf, two pioneering electric vehicles.
The program, created in 2007, requires a “reasonable prospect of repayment” of the loan.