Rivian Pausing Georgia Plant

[Khaos]

Full Capacity at Normal is still significantly less than GA. Overall the rate of expected growth is way slower under this pivot.

And i think that's fine. The entire EV market and adoption although still strong is slowing down as well. This is a smart move

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[Khaos]

Correct. RIVN also wasn't expecting AMZN to drag out EDV deliveries and the R1 i likely feeling the pressure of high interest rates with slower sales. This move gets the lower price R2 out into the market and gives RIVN a cushion.

My concern is that Mid 2026 is still 2 years away. Rivian still needs to sell lots of R1S, Ts and EDVs in the meantimes and 1) lower their cost 2) increase demand. The production line stoppage and the decrease in costs will come in handy, but Rivian needs to likely drop prices of the R1 line to keep selling those in good speed for the next 2 years

 

[R1TS]

They're not killing R1. It's their flagship, they have said that over and over again.

If I remember correctly, when Normal was a Mitsubishi plant, it had a yearly capacity somewhere around 250k. They're currently building 50k, and have expanded parts of the plant.

In recent interviews and earnings calls, they have said that the updates to R1 coming this spring are both manufacturing efficiency and parts-sharing upgrades. My guess is that there will be a lot of hidden components of the R1 and R2 that are shared. We know things like drive units will be shared, and the wiring harnesses are closely related.

In short, the R2 means they can build the R1 more efficiently and get closer to profitability on each one.

And, RJ and Rivian already reiterated as recently as just last quarter or so that the Normal factory as it is, without the second phase expansion in 2030, has a maximum annual capacity of 150k total vehicles (of all types). Current rate of 50k on two lines can’t all of a sudden go to even 150k back on three lines.

But, I’m very happy to see some ounce of sanity in RJ to scrap the Georgia plans for now. Now they have dead money and recurring expenses on that Georgia site.

 

[dleewla]

this makes a lot of sense and should have investors excited. we all know R1 demand is waning, they are burning through cash and they need to get the R2 out asap. this addresses it all.

the existing factory doesnt need the capacity to build as many R1s so its wasted capital being under-utilized. it allows them to use the existing factory, albeit with more investment needed to build the R2, but a lot cheaper than building a new factory so saves them cash short term. and it helps then get the R2 production line up faster by leveraging all the economies of scale they already have in Normal, including existing workforce, logistics of delivery, supply chain, etc. very smart move by Rivian.

 

[theyoungone]

If the timeline is roughly the same and Rivian is saving $2B by producing in Normal first, why didn’t they start this from the beginning?

What was the upside of the original GA plan then? This pivot to Normal only seems to have upside

I mean when GA was first announced, there were no delays. People weren't protesting. Interest rates were much lower. EDVs were still exclusive to Amazon and R1T/S were ramping well. There wasn't a ton of upside to Normal. The landscape has shifted dramatically in the last 12-24 months.

 

[Rivianready]

Pausing the GA plant makes a lot of sense. Preserve cash and get the R2 launched quicker out of Normal. Good strategic move. Hopefully between now and 2026 rates fall dramatically and demand comes back.

 

[DuoRivians]

I mean when GA was first announced, there were no delays. People weren't protesting. Interest rates were much lower. EDVs were still exclusive to Amazon and R1T/S were ramping well. There wasn't a ton of upside to Normal. The landscape has shifted dramatically in the last 12-24 months.

Even in the last earnings call a few weeks ago, RJ didn’t say R2 would be produced in Normal. If that’s the case, I feel this decision to produce in Normal was made very very recently.

 

[theyoungone]

Even in the last earnings call a few weeks ago, RJ didn’t say R2 would be produced in Normal. If that’s the case, I feel this decision to produce in Normal was made very very recently.

OR he just didn't feel it was worthy of announcing on the shareholder call and left it until today. So far RJ hasn't seemed like the guy to be swayed within a week based upon the stock price/public opinion.

 

[virgnia_rivian]

My concern is that Mid 2026 is still 2 years away. Rivian still needs to sell lots of R1S, Ts and EDVs in the meantimes and 1) lower their cost 2) increase demand. The production line stoppage and the decrease in costs will come in handy, but Rivian needs to likely drop prices of the R1 line to keep selling those in good speed for the next 2 years

They had nearly 10 Billion in cash end of Q4. They’re generating revenue and with the delay on GA their capital expenditure will be cut significantly. They have been predicting getting closer to profitability by end of 2024. As an investor, the news to start R2 production in Normal is great news and 2 years off is nothing in terms of starting up a completely new product line. Rivian has been through this with the EDV and R1. This is all positive news.

 

[UnsungZero_OldTimeAdMan]

Uh, what? RJ never said they were halting GA. Source? Is this journalists hearing what they want to hear and just running wild with it? What RJ did say was they decided to move timeline up and expanding Normal to start R2 production/delivery first half of '26.

 

[BigSkies]

Some ballpark math on the Normal plant.

If they get it to 215,000 vehicles annually with an ASP of $65k, that works out to ~$14B in revenue. They won't hit this run rate in 2026, but conceivably by 2027.

If they have industry standard gross margins of 20%, this implies $2.8B in gross income. It's $2.1B at 15% margins and $1.4B at 10% margins. Both Ford and GM were around 10% last year.

Rivian's been running about $3.7B in OPEX per year, so the Normal plant won't get them to cash-flow break even. But it still dramatically improves the capital picture. There's at least a believable path that they can raise the capital to get the GA plant going and get to cash-flow break even.

 

[BigSkies]

Uh, what? RJ never said they were halting GA. Source? Is this journalists hearing what they want to hear and just running wild with it? What RJ did say was they decided to move timeline up and expanding Normal to start R2 production/delivery first half of '26.

See the links to the SEC documents posted on the top of page 2 of this thread. Rivian filed SEC documents during the presentation related to GA and changed capex plans.

 

[rbrak29]

Hope Rivian did not lose any of the GA taxes breaks with this move.

 

[mkhuffman]

Some ballpark math on the Normal plant.

If they get it to 215,000 vehicles annually with an ASP of $65k, that works out to ~$14B in revenue. They won't hit this run rate in 2026, but conceivably by 2027.

If they have industry standard gross margins of 20%, this implies $2.8B in gross income. It's $2.1B at 15% margins and $1.4B at 10% margins. Both Ford and GM were around 10% last year.

Rivian's been running about $3.7B in OPEX per year, so the Normal plant won't get them to cash-flow break even. But it still dramatically improves the capital picture. There's at least a believable path that they can raise the capital to get the GA plant going and get to cash-flow break even.

It's believable, but they have to demonstrate they can make the R1 cash flow positive to convince me and most investors that they can do it with the R2. So far, every R1 they produce causes them to burn even more cash.

The "refresh" of the R1 that is supposed to happen this Spring has to focus on making the R1 cash flow positive, by reducing material cost and improving manufacturing efficiency. They have said they can do it. They better, and they better be cash flow positive on each R2, or it won't matter how cool it is. The company will go bankrupt.

 

[Twitter Fingers]

Once Illinois is pumping out R1 R2 and EDV all with positive margins they will have zero problem raising money for Georgia or even self funding that growth depending on how things are going. Company saving pivot here.

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