Electric-Truck Startup Rivian Plans New $5 Billion Factory Complex in Georgia

Rivian said its new factory will have an annual capacity of 400,000 vehicles and create 7,500 jobs. The auto manufacturer plans to start production at the plant in 2024 building its next generation of vehicles.

Rivian also reported its first financial results since going public. The company said third-quarter revenue was $1 million, reflecting its first vehicle sales, which began in September. Its net loss widened to $1.2 billion, compared with $288 million in the same year-ago period, as it incurred higher costs on launching new models and developing future ones.

Rivian shares were down 11.1% Thursday in after hours trading.

The company said it finished the third quarter with $5.2 billion cash on hand, up from $3.6 billion a year earlier. It said with the recently issued debt and the proceeds of its IPO, the largest on a U.S. exchange since 2014, its cash on hand would have been $19.9 billion.

Investors have high expectations for the Irvine, Calif.-based startup, with Rivian’s shares having gained 39.5% since it listed on Nov. 10. The company’s market valuation of $97 billion has surpassed those of both GM and Ford, making it the most valuable U.S. auto maker behind Tesla Inc.

On a call with analysts, Rivian founder and Chief Executive RJ Scaringe said the company has been challenged by the complexity of launching three models amid a global pandemic and a tight labor market. It has produced 652 vehicles since starting in September and will likely fall a few hundred short of an initial goal of building 1,200 vehicles in 2021, he said.

“It’s a really complex orchestra,” he said, citing the difficulties of juggling training and supply-chain issues.

Rivian’s valuation reflects Wall Street’s enthusiasm for so-called pure-play electric-vehicle startups. Like Tesla, these upstarts are focused solely on selling battery-powered models and are unencumbered by a legacy business built around gasoline engines. Traditional auto makers are also investing billions of dollars to build more electric vehicles, but right now these companies make nearly all their profits on selling gasoline-powered cars, SUVs and trucks.

Governments globally are accelerating the shift to electrics with tighter tailpipe-emission regulations and other efforts, such as electric-vehicle subsidies, that are aimed at reducing air pollution. In the U.S., President Biden’s infrastructure bill contains $7.5 billion for electric-vehicle charging stations, while his broader spending package would expand tax credits to help reduce the costs of purchasing a battery-powered auto.

When asked why the Rivian’s factory footprint was expanding so quickly, Mr. Scaringe said the Georgia plant was critical to the company’s long-term growth and the long lead time for construction required making investments now.

“This is a platform for us to grow from,” he said.

Rivian already has a factory in Normal, Ill., which began building electric trucks in September. At full capacity, that plant is capable of producing 150,000 vehicles a year, the company has said. The new Georgia factory would significantly add to the company’s output as Rivian expands its lineup with future models.

Rivian’s decision to locate its plant in Georgia comes as more electric-vehicle investment is flowing to southern states, further shifting the auto industry’s center of gravity away from Detroit.

Ford, in September, said it would invest $7 billion in new projects that would support its shift to electric vehicles, choosing Tennessee and Kentucky for the new facilities. Part of the spending will include its first new assembly plant in decades, to be built in western Tennessee, along with a battery-making factory.

Another rival startup, Lucid Group Inc., which aims to sell high-end electric vehicles, opened its first U.S. factory in Arizona this year.

Rivian has raised more than $20 billion in the past three years. In addition to the company’s IPO haul, Rivian has raised roughly $10.5 billion privately since the start of 2019, attracting several big-name backers, including Ford, Cox Enterprises and asset manager T. Rowe Price Group Inc.

Wall Street has been particularly taken with Rivian, which launched an electric truck called the R1T this fall that will compete with pickups made by the Detroit car companies. It plans to release two more models this year: an SUV and a delivery van built for Amazon.com Inc., which owns an 18% stake in Rivian. These models take aim at some of the most profitable parts of the U.S. car market and will be offered in body styles that are popular with buyers.

Analysts are generally bullish on Rivian’s prospects, though many note the company will face a number of challenges ahead as it tries to ramp up production and build out a sales and service network.

Rivian says it has a long way to go before its existing factory capacity is maxed out. It has said it doesn’t expect to hit a run-rate of 150,000 vehicles annually for another two years, according to company filings.

Mr. Scaringe founded the startup in 2009, operating it for years in stealth mode as it honed its business plan.

With the release of the R1T, Rivian beat many of its rivals to market in putting a fully electric pickup truck on the market. But it will soon face a more crowded marketplace with major car companies, such as GM and Ford, getting ready to roll out their own plug-in pickups.

GM plans to start deliveries of its Hummer electric truck this month, and Ford says deliveries of its F-150 Lightning will start next year. Tesla also plans to make its futuristic Cybertruck at high volumes in 2023.

Unlike Tesla, which has dominated U.S. sales of electric vehicles for several years, Rivian’s first-mover advantage is likely to be short-lived, analysts say.

“They actually have real competition from auto makers who have finally gotten the memo about electrification and the needs of consumers,” said Jessica Caldwell, an analyst at auto-data firm Edmunds.com.

Write to Ben Foldy at [email protected]