Amazon-Backed Rivian in Talks for Texas Factory

Transcript:

Kailey Leinz: Amazon backed Electric Vehicle Startup Rivian is in talks to invest at least five billion dollars to build a factory near Fort Worth, Texas. Bloomberg has learned the factory would be designed to produce 200,000 vehicles a year and would create at least 7,500 jobs. For more, we’re joined now by Bloomberg’s Ed Ludlow. So Ed, this isn’t necessarily a done deal yet. They’re looking at other sites as well.

Ed Ludlow: Right, a number of sites, number of states, number of cities still in the running, but according to my sources, Texas has become the front runner. Rivian was looking at a site potentially in Arizona. It was one that the company and its CEO, R.J. Scavenge, really liked. But with time, they had some concerns that came up around infrastructure and some environmental concerns. So now I’m hearing that this offer from the city of Fort Worth is competitive and the company is really considering it. But these things take time. The incentives fall through, they’re subject to votes by local lawmakers. So anything could happen still.

Kailey Leinz: And on the Texas side of the equation – forget the Rivian side – what kind of incentives are they offering to this company?

Ed Ludlow: Yes, you start with the city. The city of Fort Worth is offering about $440,000,000 worth of grants and tax exemptions or tax abatement. And then as part of that process, if they proceed, they would nominate the Rivian project for more tax incentives from the state of Texas, get the county that Fort Worth is based in, Tarrant County, involved as well. So when all is said and done it’s quite a hefty package. But remember, Rivian has to put something on the table as well. As you said, they’re committing to invest a minimum of five billion dollars into real estate development, construction, and hire a minimum of 7,500 jobs, which is incredible considering they haven’t even built a single car yet in their existing factory.

Kailey Leinz: Well yeah, I was going to say, Rivian having to put something on the table here. If they haven’t delivered cars yet, is it surprising that they’re now looking for a second site?

Ed Ludlow: It’s a little surprising. You might remember I broke the story earlier in the year that they were already looking for a factory in Europe, possibly mainland Europe or the UK. And we give Rivian such a lot of reputation and kudos because of the money they’ve raised – 10.5 billion dollars from big-name investors, they have this backing from Amazon. But at the end of the day, they’ve delayed production and the launch of their debut vehicles more than once because of COVID, because of supply chain disruptions. They haven’t proven anything yet until they get that into production and start delivering cars. And what I’m hearing is there’s still a little way off that. And if they want to take on Tesla, they want to be a big player in the EV market, as we learned from Tesla in 2018, it’s really hard to get into zero production and produce these things in volume.

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