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Rivian had a generally good day yesterday, launching its R2 SUV to public acclaim alongside the surprise R3 crossover and dune buggy-inspired R3X.buried in it press releaseBut then came the news that the automaker would halt production at its $5 billion Georgia plant in an effort to cut costs.
Instead of building the R2 in Georgia as originally planned, the company will begin producing the electric SUV at its existing Normal, Illinois, plant. “In addition to significantly reducing the funding required to bring R2 to market, we believe this approach significantly reduces launch and associated risks to Ram,” the company said in a statement.
The move also allows Rivian to bring R2 to market in the first half of 2026, saving it $2.25 billion in capital expenditures in the near term.This is important because cash is running out these days, according to recent reports.
Of all the EV startups that have emerged recently, Rivian is one of the most promising thanks to significant investments from Amazon, Ford, and others. The company’s electric pickup R1T and R1S SUV were also widely praised for their attractive designs and healthy range.
But growing an automotive startup is no easy task.Especially in a market where this situation continues. Tough on EVs Recently, even the mighty Tesla feeling the pinch. It doesn’t help that upstart rivals like Fisker have serious cash flow problems, which could scare off consumers wary of untested EV brands.
Rivian selected Georgia to build its second EV factory in 2021 and received up to $1.5 billion in state incentives. At the time, the company said it eventually hoped to produce 400,000 electric cars a year there. The plant changes will increase R1T, R1S, EDV, RCV, and R2 production capacity to 215,000 units per year at the Normal, Illinois, facility.
The Georgia location remains in the plan, but Rivian said only that construction will resume at a later date. “Rivian’s Georgia facility continues to be a critical part of our strategy to scale production of R2 and R3,” the company said in a statement.