Rivian Automotive (RIVN) has received a conditional loan approval of $6.6 billion from the U.S. Department of Energy (DOE) to build its long-pending Georgia plant. The loan includes $6 billion in principal amount and the remaining $600 million in capitalized interest. To secure the loan, Rivian must satisfy certain technical, legal, environmental, and financial conditions.
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Further Details of the Conditional Approval
The electric vehicle (EV) start-up aims to satisfy the conditions and secure the loan from the DOE before the Trump administration kicks in officially. One of the conditions includes not opposing the unionizing efforts of workers at the Georgia factory. The loan will be funded from the government’s Advanced Technology Vehicles Manufacturing (ATVM) loan program, which has earlier funded the EV ambitions of other automakers. The new administration is considering calling off the $7,500 in federal EV credits given to EV buyers.
Rivian plans to manufacture its less expensive R2 SUVs and R3 crossovers at the Georgia facility, with production expected to begin in 2028. The plant is designed to manufacture 400,000 autos annually across two phases. The loan will help Rivian to fast-track construction and begin manufacturing its low-priced R2s and R3s, which the company hopes will expand its market presence.
Rivian plans to employ roughly 7,500 operational staff at the Georgia plant through 2030. Plus, the company will create 2,000 full-time construction jobs at the site, boosting the local and regional economy. The construction of the plant was put on hold earlier this year, owing to financial limitations. Rivian had instead decided to start manufacturing its promising R2s at the Normal, Illinois plant in 2026.
Insights from TipRanks’ Bulls Say, Bears Say Tool
Good news is flowing in for Rivian from all sides and analysts are paying attention. According to TipRanks’ Bulls Say, Bears Say tool, bulls are excited about the additional $5.8 billion investment from Volkswagen in the joint venture announced recently. Also, analysts are encouraged by Rivian’s efforts to curtail costs and improve margins and its emergence as a leading provider of EVs in the U.S.
On the other hand, bears are cautious about revenue miss in the Q3 FY24 results, overall diminishing demand for EVs, and continued supply shortage of parts for Rivian.
Is RIVN a Good Stock to Buy Right Now?
As discussed above, analysts remain divided on Rivian stock’s trajectory. On TipRanks, RIVN stock has a Moderate Buy consensus rating based on nine Buys, 11 Holds, and one Sell rating. The average Rivian Automotive price target of $15 implies 29.3% upside potential from current levels. Year-to-date, RIVN shares have lost 50.6%.
