EV startup Rivian recently pushed back the production launch of its first battery-electric vehicles, but the EV maker, nonetheless, has quietly begun searching for a site where it can build a second U.S. assembly plant.
A number of states have submitted bids, according to a report first published by Reuters. But the project has been pushed back, TheDetroitBureau.com has learned, at least in part due to the COVID pandemic. While a target for making a decision on a new plant was originally expected this past spring, it is unclear when that now will happen.
“While it’s early in an evolving process, Rivian is exploring locations for a second U.S. manufacturing facility,” Rivian spokeswoman Amy Mast said by phone.
One of many seeking success
Rivian is one of a number of battery-car startups hoping to emulate the success of Tesla by cracking into the traditionally closed-off auto industry. And it is considered one of the companies more likely to pull that off, in part, due to the two retail products it is set to launch this year: the R1T pickup and R1S sport-utility vehicle.
Also helping is the massive contract the automaker received from one of its major investors. Amazon plans to purchase 100,000 Rivian battery-electric delivery vans this decade for its Prime delivery service. Meanwhile, the nascent EV maker is expected to help another major investor, Ford Motor Co., bring a Rivian-based BEV to market.
These projects, if they hit their target, could have strained the capabilities of Rivian’s existing factory in Normal, Illinois, a plant that was abandoned several years ago by Mitsubishi.
The company’s search for a second plant goes by the codename Project Tera, according to RFP’s sent out to multiple states Rivian has considered, TheDetroitBureau.com confirmed.
“We look forward to working with a supportive, technology-forward community in order to create a partnership as strong as the one we have with Normal, Illinois,” Mast said, though she declined to discuss any details related to the project. Nonetheless, several sources indicated Rivian is seeking incentives that could enhance the benefits of choosing a final site.
Talks about a second plant
This is far from out of the ordinary. In fact, companies like Tesla, Toyota and Mercedes-Benz routinely negotiate major concessions that can include new road and rail links, tax abatements, energy supplies and help with worker training, among other things.
Electric vehicles are expected to require fewer workers than conventional plants since these vehicles generally have fewer parts — and production of some key components, such as their battery packs, are largely automated. But, like Tesla, and some other upcoming EV production centers, the second Rivian plant is expected to include what has come to be known in the industry as a “gigafactory,” an operation to produce the batteries Rivian will need. According to Reuters, it eventually will have 50 gigawatt-hours of annual capacity.
The complex, according to the RFP, would be at least 2,000 acres, and Rivian wants to quickly turn to renewable energy to power it.
The selection of a site was supposed to have been completed by spring, construction to follow by autumn. Rivian representatives indicated there have been COVID-related delays but would not discuss a revised timetable.
While a small number of vans for Amazon are in the midst of fleet testing, the big development in Normal was expected to be the launch this month of production of the R1T and R1S models. That has now been pushed back to at least September. COVID-related issues take the blame, especially the subsequent shortage of semiconductor chips that has plagued the entire auto industry.
“The cascading impacts of the pandemic have had a compounding effect greater than anyone anticipated,” Rivian CEO RJ Scaringe wrote to customers who have placed orders for the two vehicles.
Among other investors in Rivian are T.Rowe Price and Cox Automotive. All told, it has raised $8 billion in capital just since the beginning of 2019. Reuters in January reported the company had a valuation of $27.6 billion and the news service said the company is preparing to list publicly with a $50 billion valuation. By comparison, General Motors has an $81 billion market capitalization, Ford at $26.5 billion. Tesla’s valuation was $627.4 billion at midday Thursday, but has fallen sharply in recent weeks.