The Biden administration will lend $6.6 billion to EV maker Rivian to build a factory in Georgia where the automaker was idle

ATLANTA – President Joe Biden’s administration announced Tuesday that the US Department of Energy will provide a $6.6 billion loan to Rivian Automotive to build a factory in Georgia that was stuck as the upstart electric vehicle manufacturer struggled to become profitable.

It is unclear whether the government can pay off the loan before Donald Trump becomes president again in less than two months, or whether the Trump administration could try to recover the money.

Trump previously promised it would end federal tax credits for electric vehicleswhich are worth up to $7,500 for new zero-emission vehicles and $4,000 for used vehicles.

Rivaans made a splash when it went public and began producing large electric R1 SUVs, pickup trucks and vans at a former Mitsubishi factory in Normal, Illinois, in 2021. Months later, the California-based company announced it would build a second, larger $5 billion factory about 40 miles east of Atlanta, near the town of Social Circle.

The R1 vehicles cost $70,000 or more. The company plans to produce R2 vehicles, a smaller SUV, in Georgia with lower price tags, targeting a mass market. The first phase of Rivian’s Georgia plant is expected to produce 200,000 vehicles per year, while a second phase could produce another 200,000 per year. Ultimately, the factory is expected to employ 7,500 workers.

But Rivian was unable to meet production and sales targets and quickly burned through its cash. In March, the company said it would halt construction of the Georgia plant. The company said it would instead begin assembly of its R2 SUV in Illinois.

CEO RJ Scaringe said the move would allow Rivian to start selling the R2 earlier and save $2.25 billion in capital expenditures. Since then, German automaker Volkswagen AG said in June it would invest $5 billion in Rivian in a joint venture in which Rivian would share software and electric technology with Volkswagen. The money eased Rivian’s cash crisis.

Tuesday’s announcement throws a lifeline to Rivian’s grand plans. The company said its plans to make the R2 and the smaller R3 in Georgia have restarted and production will begin in 2028.

“This loan would enable Rivian to more aggressively scale our U.S. manufacturing footprint for our competitively priced R2 and R3 vehicles, emphasizing both capacity and affordability,” Scaringe said in a statement.

The Department of Energy said the loan would significantly boost electric vehicles made in the United States and support the Biden administration’s goal of having half of all new U.S. sales be zero-emission vehicles by 2030.

“As one of the few U.S. light-vehicle EV startups already on the road, Rivian’s Georgia facility will enable the company to achieve production volumes that make its products more cost-competitive and accelerate access to international markets,” the department said in a statement. .

The loan includes $6 billion, plus $600 million in interest that will be included in the principal amount. The money would come from the Advanced Technology Vehicle Manufacturing Loan program, which provides low-interest loans to make fuel-efficient vehicles and parts. The program primarily focused on lending to new battery factories for electric vehicles under Biden, but previously also helped finance initial production of the Tesla Model S and Nissan Leaf, two groundbreaking electric vehicles.

The program, which was established in 2007, requires a “reasonable prospect of repayment” of the loan.

Democratic US Senator Jon Ossoffwho has been an outspoken supporter of electric vehicle and solar energy manufacturing in Georgia, praised Tuesday’s announcement as “another historic federal investment in electric vehicle manufacturing in Georgia.” Ossoff had asked Energy Secretary Jennifer Granholm will support the loan in July.

“Our federal manufacturing incentives are fueling economic development across the state of Georgia,” Ossoff said in a statement.

Governor Brian Kemp of Georgia says his goal is to make Georgia a center of the electric car industry. But the Republican has had a tense relationship with the Biden administration over its industrial policies, even as some studies have shown that Georgia has generated more investment in electric vehicles than any other state.

Kemp has long argued that manufacturers chose Georgia before Biden’s signature climate law, the Inflation Reduction Act, was passed.

Efforts to bring Rivian to Georgia predated the Biden administration and “our shared vision of bringing opportunities to Georgia will continue regardless of who lives in the White House or which party controls Congress,” said Kemp spokesman Garrison Douglas Tuesday.

The loan to Rivian could save one of the Kemp administration’s signature economic development projects, even as Biden leaves office. That could put Rivian and Kemp in a position to defend the loan if Trump tries to destroy it.

State and local governments offered Rivian an incentive package with an estimated value of $1.5 billion in 2022. Neighbors are against the development of the Georgia location led to legal challenges.

State and local governments spent about $125 million to purchase and prepare the nearly 810-acre site. The state has also completed most of the $50 million in roadwork it committed to.

The pause at Rivian contrasts with the rapid construction work at Hyundai Motor Group $7.6 billion electric vehicle and battery complex near Savannah. The Korean car manufacturer said this in October that production has started in Ellabell, where it plans to eventually employ 8,500 people.