Rivian Secures $827 Million to Expand Illinois Facility, R2 Expansion

May 05, 2024 11:00 PM EDT

TIME LAPSE PHOTOGRAPHY OF DOWNTOWN — (Photo : PEXELS/Ben Cheung)

The $827 million incentive package that the State of Illinois has granted the automotive business Rivian will help it expand its operations at its Normal location, the company stated on Thursday. As part of its $1.5 billion investment and expansion strategy, Rivian intends to add 550 full-time jobs in Normal over the next five years as production on the new R2 model begins.

$827 Million State Incentive to Support R2 Expansion

Rivian Automotive, Inc. announced last week about an incentive package and plans to expand one of its manufacturing locations. The State of Illinois Department of Commerce & Economic Opportunity awarded the corporation an astounding $827 million incentive package to help with its growth plans.

As reported by Autoblog, Rivian's Illinois plant, utilized for manufacturing electric delivery vans for major investor Amazon.com, boasts the capacity to produce up to 150,000 vehicles annually. The company will now introduce its more affordable midsize SUV R2 model, positioned to rival Tesla's Model Y, at this facility. Rivian anticipates reaching a combined annual output capability of 215,000 vehicles with the inclusion of the R2 model.

Rivian disclosed that the Illinois funds would go towards plant expansion, infrastructure enhancements, and job training. The state incentive package will supplement Rivian's existing $7.86 billion in cash reserves.

Despite pausing construction on a Georgia facility, Rivian plans to resume, emphasizing its significance in long-term plans. With capital expenditures expected to reach $1.75 billion in 2024, Rivian faces potential future capital needs despite prior successful bond issuances.

According to 2 WSB Atlanta, Rivian receives $827 million incentives to enhance plant capacity, infrastructure, and workforce training. This development will facilitate the launch of their midsized SUV, R2 expansion. Founder and CEO RJ Scaringe expressed gratitude for the investment, acknowledging the support from the State of Illinois, Governor Pritzker, President Harmon, and Speaker Welch.

Demonstrating a steadfast dedication to the Illinois economy and community, Rivian will engage in various urban enhancement initiatives. Additionally, Rivian executives reaffirmed their commitment to constructing a $5 billion manufacturing facility in Georgia during discussions last month.

Rivian Facility in Normal, Illinois

As per the report from WGLT.org, Rivian receives $827 million incentives, with the announcement made at the Rivian plant in Normal, a significant employer in McLean County. With over 8,000 current employees, Rivian plays a crucial role in the local economy, albeit contributing to housing challenges due to its rapid expansion.

Founder and CEO RJ Scaringe expressed enthusiasm for further investment in the community. By consolidating R2 manufacturing in Normal instead of a new Georgia plant as originally planned, Rivian is expected to reduce costs and expedite the release of the more reasonably priced SUV for customers. The governor, JB Pritzker, was present for the announcement, demonstrating how significant Rivian's position in the state is.

Rivian's CEO Scaringe revealed discussions with the governor about speeding up R2 production timelines. There is the absence of state incentives in the March announcement. Kristin Richards from the Illinois Department of Commerce and Economic Opportunity praised Rivian's choice to expand in Illinois, highlighting the state's skilled workforce and thriving EV environment.