Rivian, the electric vehicle maker, plans to begin construction on a second manufacturing plant in 2022 even as it is falling short of its production goals at its existing plant.
Rivian announced Thursday that the new $5 billion facility east of Atlanta, Georgia, will be capable of producing up to 400,000 vehicles a year, more than double the capacity of its existing plant in Bloomington-Normal, Illinois.
Rivian expects to fall a few hundred vehicles short of its production target of building 1,200 vehicles in Illinois this year. As of December 15, Rivian has produced 652 of its consumer pick-up trucks and SUVs and delivered 386.
Rivian CEO RJ Scaringe said on the automaker’s first earnings call as a public company that global supply chain issues, a tight labor market and covid have all resulted in production challenges.
Scaringe said that with Rivian’s vehicles requiring 2,000 parts, even a shortage of 0.1% of parts can slow production.
Even with the difficulties, Rivian has enjoyed a breakout year. Its initial public offering last month raised approximately $12 billion. Rivian is currently valued at about $90 billion, more than both Ford (F) and General Motors (GM).
Rivian said Thursday that it has 71,000 preorders for SUVs and pick-ups, far more than the 48,390 it had at the end of September. Motor Trend selected Rivian’s R1T as its Truck of the Year this month.
Rivian’s new plant on nearly 2,000 acres in Georgia will eventually employs 7,500 workers, according to Rivian. The automaker, which currently has more than 10,000 employees, expects to start production of vehicles there in 2024. Scaringe said that Rivian evaluated sites across the country looking for a location that had access to talent and proximity to suppliers.
Rivian lost $1.2 billion in its first quarter as a public company, compared with losses of $288 million in the same period a year before.
Scaringe said that Rivian is very focused on providing vehicles to Amazon (AMZN), which has ordered 100,000 delivery vehicles from Rivian by 2025.
“It’s critical that we don’t starve them of vehicles,” Scaringe said.