Rivian lands $1.5B incentives package to build massive EV factory in Georgia

Rivian will receive a $1.5 billion incentives package to build its massive factory in Georgia, according to documents posted Monday by the state’s Department of Economic Development.

That sizable carrot — the biggest in the state’s history — comes with several commitments from Rivian, including that it will hire 7,500 people who will earn an average annual salary of $56,000 by the end of 2028. Under the agreement, Rivian has agreed to continued maintenance of these jobs through 2047. Rivian has to make repayments to the state and joint development authority (JDA) in any year in which it is 80% below its maintenance.

Rivian also agreed to invest $5 billion into the factory project located near Atlanta during that same timeframe.

The incentives package is comprised of a mix of tax credits and other subsidies. State and local incentives totaled $1.28 billion. An additional $198 million of site and road improvements is also part of the package. The state and the joint development authority are contributing the 1,978 acres of land for the project, which is worth an estimated $83 million.

The state is also spending about $26.7 million to provide a rough-graded 500-acre pad for Rivian and $2.77 million on survey, design and permitting for all site development costs. The state and its Department of Transportation will also cover $47 million plus a $4.67 million in contingencies for road work that includes road widening, traffic signals and a new interchange.

State and local governments will share the $7.4 million cost of wetland and stream mitigation. Local governments will also provide $12.3 million for sanitary sewer, $5 million for water and $500,000 for natural gas connections, according to the documents.

Construction is expected to begin in summer 2022 with production beginning in 2024.

Rivian announced in December plans to build a second factory east of Atlanta in Morgan and Walton counties that will have double the annual production capacity of its plant in Normal, Illinois. The Georgia factory, which is supposed to include co-located battery cell production facility, will have a targeted annual production capacity of 400,000 vehicles a year.

The company said in a 2021 shareholder letter that it picked the site due to the combination of sustainable business operations, talent pool, and proximity to supply chain and logistics.

As ideal as the location may be for Rivian, some local residents have protested what has been described as largest economic development project in the history of Georgia. Their concerns run the gamut from the environment and groundwater to worries that the factory will increase traffic, cause urban sprawl and change the rural character of the area.

The state’s Department of Economic Development said the agreement was crafted to ensure that Rivian follows locally required standards pertaining to water quality, groundwater recharge and runoff and local ordinances.

The issue became so controversial, even spilling into the governor’s race, that the state took over the approval process. “We believe that this approach will enable the state to provide additional resources to improve the process of public input and feedback by consolidating it into a single forum rather than three individual jurisdictions that have separate rules, regulations and ordinances,” Department of Economic Development Commissioner Pat Wilson wrote in February 2022.

In other news, Sony and Honda revealed the name of their new EV joint venture.