Rivian Automotive, an electric vehicle company that had an initial public offering last month, said Thursday that it planned to spend $5 billion to build its second factory, in Georgia.
The announcement, which came on the same day that Rivian said it lost $1.2 billion in the three months ending in September, was the latest investment by an automaker aiming to capture a big chunk of the fast-growing electric vehicle market. Tesla, General Motors, Ford Motor and others are spending billions of dollars on new car and battery factories around the world.
Rivian’s new Georgia plant, east of Atlanta in Morgan and Walton counties, will have the capacity to produce up to 400,000 vehicles a year. The plant is expected to eventually employ 7,500 people. The company also said it would expand its Illinois plant to produce as many as to 200,000 vehicles a year, up from its capacity of 150,000 now. The expansion is supposed to add 800 to 1,000 jobs next year.
The company currently makes vehicles at a former Mitsubishi plant in Normal, Illinois. That factory has produced fewer than 1,000 vehicles, but Rivian said it had orders for about 71,000 pickups and SUVs as of Wednesday. That number does not include 100,000 delivery vans that Rivian said it plans to build for Amazon, one of its biggest investors.
Rivian can afford to splurge on a new plant even before fully using the one it already occupies because Amazon and other investors appear to believe that Rivian will be one of the few new automakers that will thrive in a world where electric vehicles overtake combustion engine cars. These investors expect Rivian to take market share from Tesla, which dominates the electric vehicle business, and from more established companies like GM and Ford.
Stock market investors have been enthusiastic about Rivian, bidding up its shares after they started trading in early November. The company has a market value of more than $90 billion, more than Ford, another investor in Rivian.
Yet, it will likely be years before Rivian’s investments will bear any profits. In the first nine months of the year, Rivian lost $2.2 billion, compared with a $665 million loss in the same period last year.