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A positive production report is at risk of being overshadowed by a ruling from a judge in Georgia blocking $1.5 billion in subsidies for the company’s EV factory
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Rivian made over 7,000 electric vehicles over the last three months and reaffirmed its goal to produce 25,000 vehicles by the end of the year. It was a sign that the company is continuing to rise above its early stumbles as it seeks to dominate the EV market with its beautifully designed emissions-free, adventure-themed trucks and SUVs.
The positive production report came on the heels of a less-than-positive update about the buzzy EV startup’s plans to build a $5 billion factory in Georgia. A judge ruled last week that the state’s economic development authority failed to justify the use of taxpayer-funded money to subsidize the project, throwing the whole project into question.
Earlier this year, Georgia’s state government offered Rivian $1.5 billion in tax incentives for its plan to build a factory east of Atlanta, which the buzzy EV company claimed will cost $5 billion to construct, and eventually produce 400,000 electric vehicles a year and employ upwards of 7,500 workers. Georgia officials called it the largest economic development deal in the state’s history.
That plan is now in jeopardy after Ocmulgee Superior Courts Chief Judge Brenda Holbert Trammell ruled that the state failed to prove that the factory is “sound, reasonable and feasible” as required under state law. She also agreed with a group of local residents who oppose the plan that Rivian’s factory shouldn’t be exempt from local property taxes.
It was a surprise outcome to what is considered a normally routine request by a local government to validate a bond agreement. Over the past year, Rivian’s plan to build a factory in Georgia has been a “lightning rod” in the state, with The New York Times reporting opponents holding rallies, dabbling in conspiracy theories, and even threatening local officials.
Rivian declined to comment on the judge’s ruling, deferring to the state’s economic development council. A spokesperson for the council said the group is exploring its “legal options.”
“As the entire country is looking to revitalize and grow domestic manufacturing, protect American jobs, and secure the country’s economic independence, we are disappointed and respectfully disagree with Judge Trammell’s decision,” said Marie Gordon, communications director for the Georgia Department of Economic Development. “We remain undeterred in our efforts to bring high-paying, American manufacturing jobs to Georgia, and are currently assessing all legal options.”
The Rivian deal has become a focal point in Georgia, where a number of key political races in this year’s midterms could determine the party that controls Congress. Georgia Governor Brian Kemp, for example, has made the Rivian deal a key point in his reelection campaign this year.
The Georgia factory is seen as crucial in Rivian’s plans to become a major player in the auto industry during its tectonic shift toward electric propulsion. As of right now, the company remains a niche manufacturer, producing a total of 7,363 vehicles at its Illinois factory in the third quarter, of which 6,584 were delivered to customers. The company didn’t provide a breakdown between R1T trucks and its electric delivery van (EDV) that is being built for Amazon. (Deliveries of the R1S SUV were delayed until later this year.)