(Nov 26): Rivian Automotive Inc won preliminary approval for a US$6.6 billion (RM29.42 billion) federal loan that would support the construction of an electric-vehicle (EV) factory the company put off building earlier this year to save money.

The loan, which includes US$6 billion of principal and around US$600 million of capitalised interest, would come from the US Energy Department’s Advanced Technology Vehicle Manufacturing Programme. Rivian chief executive officer RJ Scaringe said the funds would enable the company to “more aggressively scale” production of cheaper electric sport utility vehicles (SUVs).

Rivian shares jumped as much as 7.8% before the start of regular trading on Tuesday. The stock has fallen more than 50% this year, as the EV maker has struggled to ramp up output of plug-in pickups, SUVs and delivery vans for Amazon.com Inc, its largest shareholder.

Scaringe, 41, paused plans for a new plant in Georgia earlier this year, when he unveiled prototypes of vehicles Rivian had in development: the R2 midsize SUV and the R3 and R3X crossovers. The company said shifting planned production of the R2 to its existing facility in Illinois would allow the automaker to get to market faster and save more than US$2.25 billion.

Assuming Rivian is able to meet certain technical, legal, environmental and financial conditions to finalise the US loan, the company will set up a factory east of Atlanta in two phases. The first would enable the company to start production in 2028 and create about 7,500 jobs.

Rivian would set up the plant to have the capacity to make an additional 200,000 EVs in each phase. The company didn’t say in its statement issued late on Monday when it expects the second phase that would boost capacity to 400,000 vehicles to be completed.

The conditional loan approval is the latest in a series of positive developments for Rivian. The company just reached a conditional settlement to resolve a 2020 lawsuit, in which Tesla Inc accused the EV maker of poaching employees to steal trade secrets. Earlier this month, Volkswagen AG raised the stakes for its partnership with Rivian, increasing its planned investment to US$5.8 billion.

Rivian already has secured a US$1.5 billion package of state and local incentives — the biggest in Georgia’s history — to build the plant outside of Atlanta. When lining up those funds two years ago, the company pledged to create 7,500 jobs by the end of 2028.

Uploaded by Tham Yek Lee