Rivian is set to receive $827 million in incentives from the state of Illinois to assist in the construction of its next-generation electric vehicle, known as the R2.
The announcement was made on Thursday, with the Illinois Department of Commerce and Economic Opportunity allocating the funds. The money will be used to expand Rivian's current factory in Normal, Illinois, to develop supporting infrastructure and enhance job training programs for its employees. Upgrades to the factory are expected to begin in the coming months.
This funding news comes shortly after Rivian unveiled the midsize R2 SUV, which is projected to have a starting price of around $45,000 and become available for purchase in 2026. The company also has plans to produce and sell a hatchback named the R3, which will be powered by the same EV platform as the R2.
Rivian had initially intended to manufacture the R2 at a new $5 billion factory in Georgia. However, during the R2 launch event in March, the company announced a change in plans and opted to produce the R2 in Illinois, where it currently manufactures the R1T pickup, the R1S SUV, and commercial electric vans.
This shift away from the Georgia facility enables Rivian to accelerate the timeline for the R2 SUV and save over $2 billion. While Rivian remains committed to constructing the factory in Georgia, financial challenges and production scale issues prompted a reevaluation of its strategy for the next-generation vehicle.
In the event that Rivian establishes a factory in Georgia, it stands to receive $1.5 billion in incentives. This incentive package, the largest in Georgia's history, comes with specific commitments from Rivian, including the employment of 7,500 individuals earning an average salary of $56,000 annually by the end of 2028. Rivian has also agreed to maintain these jobs until 2047, with provisions for repayment to the state and joint development authority if production falls below 80% of the agreed target in any given year.
