Considering Rivian Automobile (NASDAQ:RIVN) faces a planned second-quarter factory shutdown, a stall in production and delivery estimates for the year, and a slowdown in demand, you might not think there’s a lot of good news to be found regarding the young manufacturer of electric vehicles (EV).
But you would be wrong. Let’s look at some recent announcements that are certainly positive for the company.
Incentive package
In good news for the company, Illinois is offering the electric vehicle maker an incentive program worth $827 million.
The package breaks down into $75 million from its closing fund, $634 million in tax incentives over 30 years, and the state will also fund a second manufacturing training academy in Normal, Ill. where the factory is located.
Rivian plans to create more than 500 jobs while expanding its production process at its Normal facility, and the incentive program requires Rivian to maintain 6,000 jobs in Illinois.
“State support will allow us to quickly bring our mid-size SUV, the R2, to market and offer consumers even greater choice in electric vehicles,” Rivian CEO RJ Scaringe said in a statement Press.
What Scaringe alluded to is the key takeaway, as the company opted to bring production of its R2 crossover into its normal plant to fill excess capacity, rather than wait until its Georgia plant is up and running .
The move was a no-brainer because it uses excess capacity at a time when production and deliveries are expected to stagnate in 2024, and it saves the company approximately $2.25 billion while accelerating the production schedule and launch of the R2.
Collect talents
More good news for investors is that Rivian recently hired Javier Varela as its chief operating officer (COO) to help it launch its lower-cost R2 model. Varela is the former COO and deputy general manager of Volvo and played a key role in Volvo opening a factory in the United States in 2018.
Additionally, Varela had already been chosen by Volvo CEO Jim Rowan in 2022 as one of two deputy CEOs to help lead Volvo’s transition to an all-electric vehicle brand by 2030 – he s This is an excellent hire by Rivian.
What it all means
The electric vehicle (EV) market is saturated at the high end as many automakers have struggled to lower prices quickly enough to attract traditional consumers. Right now, it’s a race to get prices around $30,000, which would make electric vehicles comparable to gasoline vehicles and open the door to skyrocketing electric vehicle sales as mainstream consumers are entering the market.
This is why Rivian’s future could largely depend on the success of its R2, and possibly the R3. These metrics more clearly show that Rivian is preparing by hiring specific talent for the R2 launch, while also receiving support from Illinois to ramp up its factory to produce the R2 faster than originally planned.
For Rivian investors, amid a wave of not very good news for the industryIt’s finally a breath of fresh air.
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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.
Some good news for Rivian Investors was originally published by The Motley Fool
