US EV pure play Rivian will break ground on new Georgia manufacturing facility in early 2024. The plant will have an annual production capacity of 400,000 units when fully complete and is located forty minutes from Atlanta.
The planned production capacity and ramp-up of the new facility will lay the groundwork for its R2 SUV, which is seen as Rivian’s first 300,000+/yr platform, in the view of automotive analyst Clark Schultz.
“This one is particularly exciting as it is close to our future R2 manufacturing campus. This space will serve as a valuable hub to connect with the surrounding community,” says company CEO RJ Scaringe.
The Rivian R2, a compact e-SUV slated for release in 2026, is expected to hit a market under the company’s current SUV offering, the R1S, with pricing between $40,000 and $60,000.
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This will be the acid test for the company, as it sees if its efforts to reduce costs will allow it to sell the R2 at the lower end of its targeted price range. Combined with capacity of 400,000 annual production at the Georgia plant, Rivian is priming itself for more of a ‘volume-first’ approach.
“What we will see going forward is a very clear set of steps up to profitability,” says Scaringe.
But moving into 300,000-400,000 levels of production would be a step change for a firm still guiding to produce only 52,000 vehicles this year — albeit analyst Andres Sheppard of financial services firm Cantor Fitzgerald expects Rivian to exceed this guidance as part of what he calls a “under-promise and over-deliver” approach.
The R1-T e-pickup, could, though, make more of a contribution as other US e-OEMs face headwinds wit their offering in that segment. “The United Auto Workers union headaches for GM and Ford are expected to slow down the electric truck production timeline for the automakers or potentially make their electric trucks less competitive on pricing, while Tesla has still not set a launch event date for its Cybertruck,” says Schultz.
Despite promises of future jam, however, Rivian stock has tumbled more than 20pc over the past thirty days, with its price now sitting at $16.72 before Monday trading opens, down from a peak of $24.28. Markets did not react kindly to the company issuing $1.5bn in debt through green convertible notes earlier this month.
This is a far cry from analyst consensus after the company’s delivery and production pre-announcement in September of a price target of around $30, which Cantor Fitzgerald called “conservative” at that time.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
