Amazon-backed Rivian in talks for $5 billion Texas plant
Rivian Automotive Inc., the electric-vehicle startup backed by Amazon.com Inc., is in talks to invest at least $5 billion to build a factory near Fort Worth, Texas, according to a document obtained by Bloomberg News.
The factory - codenamed “Project Tera" according to the document -- will be able to produce 200,000 vehicles a year, and will create at least 7,500 jobs by 2027. The presentation, made by the City of Fort Worth’s Economic Development Department to the City Council and dated Aug. 10, also includes a number of incentives including grants and county tax abatement of up to $440 million.
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The $5 billion capital investment commitment from Rivian includes a minimum $2 billion in real property improvements and $1.6 billion in hard construction costs, the document shows. The company has committed to completing its initial investments by the end of 2024.
While a number of states and cities are still under consideration, the Texas site has become the front-runner for Rivian, according to people familiar with the matter. Rivian, and in particular Chief Executive Officer R.J. Scaringe, had previously been keen on a location in Arizona but concerns were raised around the available infrastructure, the people said, asking not to be identified discussing private information.
No final decision has been made and it could be some weeks before a deal is agreed with one of the cities or states, the people said.
Robert Sturns, the director of economic development for Fort Worth, said in an email that the city is “very excited to be a finalist for this project and looks forward to continuing the process."
Sturns told members of the City Council during a presentation on Tuesday that several states were still under consideration by Rivian. The City of Fort Worth believes it offers a number of competitive advantages, including strong access to talent and the “ability to stand up production fast" it said in the document.
Texas, with its growing tech economy, access to ports and proximity to suppliers in Mexico. has caused some to call it the Detroit of the south. Toyota Motor Corp.’s North American headquarters are in Plano, and Elon Musk’s Tesla Inc. is building a new vehicle factory in Austin that is slated to be completed later this year.
Rivian didn’t immediately respond to a request for comment.
The Irvine, California-based automaker is at the head of a large pool of EV startups trying to catch up with Tesla. The company has caught attention with its planned battery-electric pickup and SUV and a deal to build Amazon 100,000 electric delivery vans by the end of the decade.
It has raised more than $10.5 billion from a stellar list of investors including Ford Motor Co. and T. Rowe Price. The company already operates a factory in Normal, Illinois but recently delayed the start of production on its debut EV due to supply-chain disruptions.
The proposed 2,000 acre Walsh Ranch site in Texas is located 12 miles southwest of downtown Fort Worth and on completion, the plant would include 12 million square feet of vertical construction. Rivian will ensure minimum average annual salary of $56,000, according to the document.