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Rivian (RIVN) announced late Thursday night that it won a “conditional commitment” from the Department of Energy (DOE) for a $6.6 billion loan, highlighting Rivian’s improving capital condition.
The loan, part of the DOE’s Energy’s Advanced Technology Vehicle Manufacturing (ATVM) program, would support the construction of Rivian’s upcoming assembly plant located outside of Atlanta. Rivian paused development of the site back in March due to concerns about its capital position. At the time, Rivian said building its upcoming R2 vehicles at its existing Normal, Ill., plant instead would save the company over $2 billion in costs.
If finalized, the new DOE loan would restart Rivan’s plans to develop the Georgia assembly plant.
Rivian stock surged in premarket trading but opened lower.
“This loan would enable Rivian to more aggressively scale our US manufacturing footprint for our competitively priced R2 and R3 vehicles that emphasize both capability and affordability,” CEO RJ Scaringe said in a statement. “A robust ecosystem of US companies developing and manufacturing EVs is critical for the US to maintain its long-term leadership in transportation.”
Rivian said it must satisfy certain technical, legal, environmental, and financial conditions before the DOE enters into the loan agreement. If finalized, Rivian said it would build the facility in two phases, each resulting in 200,000 units of annual production capacity, for a total of 400,000 units of annual capacity, which Rivian claims would support the “sale of American EVs in international markets.” Phase 1 of the project is expected to start production in 2028.
In the meantime, Rivian will continue to pursue building its volume R2 and R3 vehicles at the Normal plant, with production slated for the first half of 2026.
Rivian notes that other American automakers have taken advantage of similar government-backed loan programs, including Tesla (TSLA), GM (GM), and Ford (F), including battery supply chain companies like Redwood Materials and Lithium Americas.
Rivian securing conditional approval of the $6.6 billion DOE loan comes on the heels of another big financial win for the company. In mid-November, the company announced an expansion of its partnership with Volkswagen (VWAGY), with the German automaker pouring more money into a joint venture. Volkswagen will increase its total deal investment to $5.8 billion from $5 billion.
The joint venture will begin operations in North America and eventually expand to Europe. It will also support the development of electric vehicles in the subcompact segment, the companies said.