Rivian receives $827 million in incentives to expand its Illinois facilities and shares jump

(Reuters) – Rivian Automotive said on Thursday it received $827 million in incentives from the state of Illinois to expand operations at its normal facilities.

Shares of the Irvine, Calif.-based company rose nearly 10% in afternoon trading after losing more than 60% of their value this year, as of Wednesday’s close.

The Illinois plant, where Rivian also makes its electric delivery vans for its biggest investor, Amazon.com, can produce 150,000 vehicles a year, the company said.

Rivian will produce its cheaper mid-size R2 SUV model, unveiled in March, at the factory and will take on Tesla’s Model Y.

With the addition of the R2, Rivian anticipates a total annual capacity of 215,000 vehicles.

The company said the funds from the state of Illinois would go toward plant expansion, public infrastructure improvements and job training programs for its workforce.

The incentive program would add to Rivian’s cash and cash equivalents balance of $7.86 billion at the end of last year.

Earlier this year, Rivian said it planned to spend about $1.75 billion in capital spending in 2024, thanks to additional investments in a second factory just outside the Atlanta facility, in Georgia, but has since suspended construction of the plant.

Construction will resume later in Georgia because that site “remains an extremely important part of its long-term strategy,” Rivian said.

Rivian, which is expected to report first-quarter results next week, raised more than $3 billion with two bond offerings last year, but some analysts and investors say it will need additional capital by 2026.

(Reporting by Akash Sriram in Bengaluru; editing by Shilpi Majumdar and Tasim Zahid)