Rivian will not draw its approved $6.6B federal loan until after its Georgia plant is built, targeting 2028

Rivian’s finance chief says the company will not touch the $6.6 billion U.S. government loan until its new plant in Georgia is built and ready to move toward production, which is expected in 2028.

The statement came from CFO Claire McDonough, who spoke to reporters in Detroit. She said construction on the Georgia plant is expected to begin next year.

Claire explained that Rivian plans to seek reimbursement through the Department of Energy loan after the plant is completed but before the company begins production there. “It’d be prior to starting production in 2028 that we’d be drawing down the loan,” she said.

The loan was finalized in January, during the final days of President Joe Biden’s administration. That timing matters because former President Donald Trump has criticized federal financing of clean energy projects like this.

Meanwhile, Energy Secretary Chris Wright said in May that his agency does not plan to move forward with several loans approved under Biden.

Rivian’s expected drawdown in 2028 will land directly in another U.S. presidential election year, putting political risk right at the center of this financing plan. No drama there, right? Sure.

Rivian timelines tied to Georgia plant and R2-R3 production

The company, based in Irvine, California, plans to start building the Georgia plant next year. The factory is intended to handle production of the company’s upcoming models, including the R2 and eventually another model called R3.

The R2 will first be built at Rivian’s existing plant in Normal, Illinois starting in 2026. Rivian applied for this federal loan last year, shortly after pausing the initial Georgia construction plan because of cost pressures.

Yes, cost-cutting led to the pause. Now the plan is back on track, just slower.

Claire also reaffirmed Rivian’s target to reach operating profit by 2028, but only if the Normal plant reaches full annual capacity of 200,000 vehicles. That is the internal performance threshold.

Claire said, “Ramping up the Normal facility to 200,000 would get us to Ebitda,” referring to earnings before interest, taxes, depreciation, and amortization. Right now, Rivian is nowhere near that.

In August, the company projected an adjusted EBITDA loss of up to $2.25 billion for the year. So yes, they are planning long-term, because the short-term is not pretty.

Rivian analyzed Xiaomi SU7, but says U.S. cannot match China’s support

There was another layer to the conversation this week. CEO RJ Scaringe confirmed that Rivian engineers recently tore down the Chinese Xiaomi SU7, the electric sedan that has been shaking up markets because of its price.

It starts at 215,900 yuan, around $30,000. Last year, even Ford CEO Jim Farley said he imported an SU7 to drive it himself. That got attention.

Scaringe said the SU7 is “a really well executed, heavily vertically-integrated technology platform” and “nicely done.” He even said that if he lived in China, it is one of the cars he would consider buying.

But after the teardown, Rivian did not discover any magic trick that explains the low price. “We learned nothing from the teardown” that would explain how Xiaomi keeps costs down, Scaringe said.

According to him, the answer is simple: China’s government support system. He said that in China, “the cost of capital is zero or negative, meaning they get paid to put up plants.” That is a financial environment the U.S. does not have and cannot copy.

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